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

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 TMZ.com, "The parties are satisfied and the dispute has been resolved amicably and completely."

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