The family feud that has weighed heavily on Cree's (NASDAQ:CREE) stock is effectively over. Yesterday, Cree announced that it had settled the $3 billion lawsuit company co-founder Eric Hunter filed against the company and his own brother -- Cree Chairman Neal Hunter -- in June.

The terms of the deal are very favorable for Cree. Not only will Cree not forfeit any payment to either Eric or his wife (also party to the suit), the company has accepted Eric Hunter's resignation. Further, both Eric and his wife have been barred from further pursuing the matter, effectively closing this chapter in both family and company history.

Last month, Cree shares got a big relief when the Hunters dismissed the allegations of federal securities fraud and unfair or deceptive trade practices. Cree shares are bouncing off their August low of $11.70, after the June lawsuit cut the legs off a high in the mid-$20s range, leaving investors to wade through the volatility.

The settlement agreement removes a major distraction, allowing management to turn its focus back to business. It also lifts the weight off the heavily shorted stock of a company that has turned in an otherwise bright performance in recent quarters.

Talk bright futures on the Cree discussion board -- only at Fool.com.

Jeff Hwang owns shares of Cree, and can be reached at JHwang@fool.com.