Court records in Los Angeles show attorneys reported the settlement to a judge on Thursday. The judge ordered all discussions and the settlement's terms sealed.
Spector had been seeking a refund of the $1 million retainer he paid Shapiro after his arrest in 2003. The "Wall of Sound" producer was convicted of second-degree murder in the shooting of Lana Clarkson after two trials and is currently serving 19 years to life in prison.
Spector had been fighting for years to get the money returned, claiming Shapiro took advantage of him. A trial was scheduled to begin on Monday.
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