Peace pact resolves ugly family feud at L'Oreal

France's richest woman and her daughter have resolved a protracted legal dispute over more than euro1 billion ($1.3 billion) that swelled into a national scandal and raised questions about the future of the family fortune, lawyers said Monday.

"There is no more case as far as we are concerned," lawyer Olivier Metzner told The Associated Press.

L'Oreal cosmetics heiress Liliane Bettencourt, 88, and her daughter Francoise Bettencourt Meyers have reconciled, Metzner said, adding, "We are bringing an end to all procedures given this familial reunion."

The daughter had publicly accused photographer Francois-Marie Banier of abusing her mother's alleged mental frailty and abusing her trust to bilk Liliane Bettencourt out of euro1 billion ($1.3 billion) in cash, artworks and other gifts. Banier, a longtime friend of Bettencourt's, has insisted he did not take advantage of her, but the dispute prompted a string of legal cases.

Metzner said the photographer "has renounced many of the benefits he received. And we are renouncing any procedure regarding him."

The photographer's lawyer confirmed an agreement was signed, but provided no details.

The peace pact brings unexpected resolution to a case that dominated headlines for several weeks earlier this year - and even embroiled President Nicolas Sarkozy and his government.

The feud erupted into a political affair over leaks by former Bettencourt employees about how the heiress was managing the family's fortune, and led to claims of tax evasion and illegal financing of Sarkozy's conservative party.

Police questioned the former treasurer of Sarkozy's UMP party - then-Labor Minister Eric Woerth - in July amid allegations that he received funds from Bettencourt to illegally finance Sarkozy's election campaign.

Woerth denied the allegations. Sarkozy called the claims a smear campaign.

As the mother-daughter dispute escalated, Bettencourt raised questions about the future of the world's biggest cosmetics company once her daughter inherits it.

Francoise Bettencourt Meyers, meanwhile, had sought to have her mother declared mentally incompetent. Last month, a judge ordered Liliane Bettencourt to undergo examination by three doctors meant to determine her mental and physical health.

Bettencourt, Europe's richest woman according to Forbes, has a fortune estimated at $20 billion (euro15 billion), and is one of France's biggest taxpayers.

Liliane Bettencourt called the agreement "a source of hope" in a statement released by the women's lawyers. Her daughter said the agreement "allows us at last to rediscover family harmony." Both women professed their personal attachment to L'Oreal, founded by Bettencourt's chemist father Eugene Schueller a century ago.

The reconciliation paves the way for Bettencourt's daughter, son-in-law and two grandsons to "play their part in the incarnation of the family business," said Pascal Wilhelm, a lawyer for the elder heiress, on France-Info radio.

He said both women want the new "family serenity" to boost the fortunes of L'Oreal as a company. The reconciliation should allow Liliane Bettencourt "her freedom to live as she wishes," he added, without elaborating.

The photographer, meanwhile, has only seen Bettencourt once in the last six months, his lawyer Pierre Cornut-Gentille, said on France-Info radio.

"There is no more Bettencourt affair," he said.

Traders seemed little moved by the development, and L'Oreal stocks closed up just 0.1 percent on Monday at euro84.35 in Paris trading.

Equity analyst Deborah Aitken of Bryan Garnier and Co. said the company has been an "underperformer" recently and predicted the reconciliation wouldn't have a major impact on the overall balance of ownership at L'Oreal. The Bettencourt family currently has a 31 percent stake, with Nestle the second-largest stakeholder.

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Crystal Becerril in Paris contributed to this report.