Hollywood actor James Franco has reached a settlement in a class-action lawsuit brought forth by two former students of his acting school, who accused the actor of sexually exploiting them.

Sarah Tither-Kaplan had previously come forward with allegations of sexual misconduct against the actor/director, just after he won a Golden Globe Award for his film The Disaster Artist in 2018. Scarlett Johansson accused her colleague of "preying on people who have no power" in 2018, while Busy Phillips previously described him as a "bully" on the set of Freaks and Geeks.

When the allegations first surfaced, Franco said they were "not accurate", while his lawyers previously described the claims as "false and inflammatory".

Franco’s legal team and the plaintiffs reportedly informed a Los Angeles Superior Court on February 11 that both sides had reached an agreement, although the terms of the settlement remain unknown to the public.

The deal also applies to Franco's production company, Rabbit Bandini, and his two business partners, Vince Jolivette and Jay Davis.

As part of the settlement, the two women who initiated the lawsuit agreed to drop their individual claims against the Zeroville actor.

In the original 2019 lawsuit, Franco and his now-defunct Studio 4 school were accused of “engaging in widespread inappropriate and sexually charged behaviour towards female students by sexualising their power as a teacher and an employer by dangling the opportunity for roles in their projects.”

Franco was also accused of forcing prospective students to take part in a “sex scenes masterclass” and film videotaped auditions where Franco would remain in possession of said tapes.

The students also had to sign away their rights to the recordings.

Franco’s attorney Michael Plonsker denied the allegations when the lawsuit was filed, stating:

“This is not the first time that these claims have been made and they have already been debunked. We have not had an opportunity to review the ill-informed Complaint in depth since it was leaked to the press before it was filed and our client has yet to even be served. James will not only fully defend himself, but will also seek damages from the plaintiffs and their attorneys for filing this scurrilous publicity seeking lawsuit.”

Franco last appeared onscreen in the final season of HBO’s The Deuce. He is particularly well known for his work with Seth Rogen, working on big budget films Sausage Party, The Interview and This Is The End with the comic actor.

Franco was nominated for Best Actor at the 2011 Academy Awards, nominated for his starring role in 127 Hours - directed by Danny Boyle.