Adriana M. Barraza / WENN 1 / 4
Adriana M. Barraza / WENN 1 / 4

Troubled singer/actress Demi Lovato has reached a financial settlement with a dancer who accused the Disney star of punching her in the face.

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Alex Welch threatened to sue Lovato earlier this month if she didn't apologize for reportedly lashing out at her during an incident on a plane in October.

The dancer claimed the altercation left her with a black eye and a bruised cheekbone, and the fight is rumored to have prompted Lovato to pull out of a world tour with the Jonas Brothers and check into rehab for undisclosed "emotional and physical issues."

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Lawyers for both parties have been locked in negotiations to avoid a court showdown and they have now reached an agreement.

Welch's attorney, Donald Karpel, tells, "The parties are satisfied and the dispute has been resolved amicably and completely"

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Details of the deal are confidential and have not been released to the press.