Blake Lively, Justin Baldoni and what happened in shocking settlement

Blake Lively and Justin Baldoni abruptly reached a legal settlement earlier this month in their nearly two-year-long battle over their dueling allegations of misconduct and smear campaigns around "It Ends with Us."

The news broke just as Lively, 38, was about to step onto the Met Gala red carpet May 4, beaming for the cameras as she ascended the iconic steps of the Metropolitan Museum of Art in a flowing, pastel-hued Atelier Versace gown. It was a glitzy return to normalcy for the embattled "Gossip Girl" actress, who has been engaged in messy public mudslinging with Baldoni over claims of sexual harassment and retaliation.

"It's no coincidence that Lively was on the red carpet just hours after the settlement was announced - it was a tactical effort to being the rebranding process in the minds of Hollywood and homes across America," says Doug Eldrige, founder of Achilles PR.

But just three days later on May 7, attorneys for Lively said that she will continue to pursue damages against Baldoni, seeking compensation for her attorneys' fees and other financial penalties stemming from his $400-million countersuit.