(LOS ANGELES, CA) -- Vivid Entertainment Group says socialite Kim Kardashian has dropped a law suit that she lodged against the company after release of "Kim Kardashian Superstar," a sex video she made three years ago with her then boyfriend, R&B artist Ray J.

"We are pleased that Kim has dropped her legal action against us," said Steven Hirsch, co-chairman of Vivid Entertainment. "We met with her several times and finally reached a financial arrangement that we both feel is fair."

"We’ve always known we had the legal right to distribute this video which became an instant best-seller and we’ve always want to work something out with Kim so she could share in the profits," added Mr. Hirsch.

The DVD has become a best seller in adult video stores and on online at www.shopvivid.com following its release in March. It is also a popular "Download to DVD" through www.alladultchannel.com and was available for streaming online through the website www.kimksuperstar.com.

Ms. Kardashian, daughter of O.J. Simpson lawyer Robert Kardashian and a close friend of Paris Hilton, claimed she had not authorized release of the video, for which Vivid had paid an unidentified third party $1-million. As part of her commitment to drop the suit, Ms. Kardashian agreed to a lump sum financial settlement for the sale of the DVDs.