Regan had "sent them [her lawyers] a check, and they sent it back," a source close to the case tells us.

Marc Dreier, chief attorney on the suit, told us: "We did all of the work on the case from day one, and she terminated us on the eve of the settlement. She sent us a letter terminating our services, and yes, she sent us a check -- for $125,000. But our agreement spelled out that we would get 25% of her recovery ... which has been reported at $10 million to $20 million. Our payment should be a lot more than $125,000."

"That's a complete fabrication," argued the friend of Regan. "All they did was draft a complaint -- and not too well at that. [Regan co-counsel] Bert Fields didn't even want his name on it. Judith fired the Dreier lawyers because they also violated her strict orders not to play confidential tapes that had been locked in a safe."

Dreier is also suing Fields, claiming interference during the legal proceedings, but not Regan's other co-counsel, Joe Cotchett.

News Corp. fired Regan in December 2006, alleging that she had made anti-Semitic statements to a company attorney, but said Friday: "After carefully considering the matter, we accept Regan's position that she did not say anything that was anti-Semitic in nature, and further believe that Regan is not anti-Semitic."

The once-rancorous clash between the two sides ended in a series of mutually complimentary statements: News Corp. called Regan a "talented publisher," thanked her for her "outstanding contributions" and wished her "continued success." Regan, in return, said: "I am grateful for the opportunity to have worked with so many gifted people and am looking forward to my next venture."

Regan filed her $100-million defamation lawsuit against News Corp. in November, alleging that she had been asked by company officials to lie to federal investigators in order to protect former New York Mayor Rudolph W. Giuliani's presidential bid.

Regan had also alleged that company officials had orchestrated a "smear campaign" to discredit her after her promotion of a controversial memoir by O.J. Simpson. Regan, who had pushed for the publication of "If I Did It" and also planned to broadcast a TV interview with Simpson, was fired as public outcry mounted.

In a $100 million defamation suit filed in New York Tuesday, the firebrand former publisher sues, censures or cites Rudy Giuliani, Rupert Murdoch, Mickey Mantle, Bill O'Reilly, O.J. Simpson, Roger Ailes and Bernard Kerik. Regan accuses her former employer, News Corp., of engineering a campaign of dirty tricks against her that allegedly involved leaking lies that she was openly anti-Semitic, disgracing and embarrassing her when she tried to publish O.J. Simpson's fictionalized account of the murder of his wife and her friend, and suggesting she lie about her affair with a married New York City police commissioner to protect former New York Mayor Rudy Giuliani's presidential dreams.

In a 72-page complaint, Regan's attorneys claim that she was the victim of a "deliberate smear campaign orchestrated by one of the world's largest media conglomerates for the sole purpose of destroying her credibility and reputation. "This smear campaign was necessary to advance News Corp.'s political agenda, which has long centered on protecting Rudy Giuliani's presidential ambitions," read the court filing.

The complaint charges that one unnamed senior News Corp. executive "counseled Regan to lie and withhold information from investigators" about her acknowledged affair with former New York City Police Commissioner Bernard Kerik. Another unnamed News Corp. executive "advised Regan not to produce clearly relevant documents in connection with a governmental investigation of Kerik," according to the complaint.

Earlier this year, according to sources, the two parties reached a tentative agreement in principle, whereby Regan would forego a suit and avoid disparaging her former employers in exchange for around $6 million. (According to one source, News Corp. wanted to space the payments out over time to keep Regan on a leash.)

But the deal fell apart nearly three weeks ago for reasons that are unclear. The source close to Regan said one sticking point was control over books in development at Regan Books, which has been temporarily renamed HC. A News Corp. spokesman declined to comment, and Regan's lawyer, Bert Fields, did not reply to a query.

"If Ms. Regan did make the charge that a Jewish cabal was conspiring against her, she clearly stepped over the line by employing the age-old anti-Semitic canard that Jews conspire against non-Jews," ADL National Director Abraham H. Foxman said. "She also gives credence to the conspiracy theory that Jews control the media. Whatever her dispute with HarperCollins, the Jewishness of her critics had absolutely no relevance to the matter at hand, which leads one to question why she resorted to raising the Jewish issue."

*****

[Attorney Bert] Fields, whose other clients have included Tom Cruise and Steven Spielberg, told the AP Tuesday that he "was really alarmed" by Foxman's remarks and found them "quite harmful to the Jewish cause. And I feel free to say that because I am Jewish." Fields acknowledged that Regan had used the word "cabal," but denied she said "Jewish cabal." Even if she had, he said, her comments would not be anti-Semitic. "I am quite stunned at what I think is a super thin-skinned response (by Foxman)," Fields said. "If a Jewish person is in a cabal, I don't think it implies that all Jews are conspiring against her. And to say that is silly."

Meanwhile, publishing industry insiders were speculating about Regan's next move and whether she would remain in Los Angeles. In her weekly column, Publishers Weekly Editor Sara Nelson wrote that she doubted "we've heard the last of Judith Regan," speculating that she will land at a TV network, movie studio or another publishing house.

Others doubted a quick return to publishing, though. "Right now she's pretty radioactive for the book world," said an executive at a large publisher, speaking anonymously. "My guess is that she's not going to be linking up with a major house in the short run. But in the long run she could." Both Walter, who spoke with Regan on Sunday, and Fields said the former publisher had not decided her next professional move. Nor whether she will remain in Los Angeles, they said.

"My guess is she's going to take some time off," Walter said. "She has a lot of decisions ahead of her. If she goes back into publishing, I'd expect her to do something small. She wants to break free from how publishing works, to be more nimble and to produce books faster based on news as it breaks."

7: The Mickey Mantle Novel, described by its author, Peter Golenbock, as an "inventive memoir" and by others who have seen the galley as something tantamount to pornography, is likely to evoke charges of bad taste and questionable ethics when it is published in March in a 60,000-copy first printing. It may even occasion claims of libel, according to publishing lawyers.

Two media insiders who have read the galley, each of whom asked not to be identified by name, used words like "porn," "debased," "exploitative" and "vile" to describe the book's contents. One of them said the book left him "speechless."

In the novel, Golenbock, author of dozens of sports titles, tells Mantle's story in the first person—"in Mickey's own words," as he said by telephone to PW, "so that readers will get a better idea of who Mickey was."

News Corp., the parent company of book publisher HarperCollins and the FOX network, has canceled publication of the O.J. Simpson book and television special "If I Did It." "I and senior management agree with the American public that this was an ill-considered project," said Rupert Murdoch, News Corp. chairman. "We are sorry for any pain that this has caused the families of Ron Goldman and Nicole Brown Simpson."

In the book, the one-time football superstar tells how he would have killed his ex-wife Nicole Brown Simpson and her friend Ron Goldman if, in fact, he had done it. A dozen FOX affiliates had already said they would not air the two-part sweeps month special, planned for next week before the book's publication. One station manager who had said he wasn't airing the special said he was concerned that whether or not Simpson was guilty, he'd still be profiting from murders.

I have my own moral compass and this was easy," said Bill Lamb, general manager of WDRB in Louisville. Relatives of the victims have lashed out at the now scuttled publication and broadcast plans. "He destroyed my son and took from my family Ron's future and life. And for that I'll hate him always and find him despicable," Fred Goldman told ABC last week.

The industry trade publication Broadcasting & Cable editorialized against the show Monday, saying "FOX should cancel this evil sweeps stunt." One of the nation's largest superstore chains, Borders Group Inc., said last week it would donate any profits on the book to charity.