A winding up petition brought against west Belfast community festival Feile an Phobail appears set to be cancelled, the High Court heard today.
Proceedings were initiated over an alleged rates bill for a building it once rented on a short-term basis.
But a judge was told the organisation is exempt due to its status as a registered charity.
Feile an Phobail director Kevin Gamble said he has now been informed the petition will be "expunged".
Renowned for promoting Irish and international culture throughout its 31-year history, the festival faced a petition brought by the Department of Finance.
During a brief hearing Mr Gamble expressed surprise it had reached court, citing months of discussions with Land & Property Services.
"We are a registered charity and have always been exempt from rates," he said.
"We took a short-term lease out on a building and thought the same applied."
He added that those premises are now under completely different ownership.
A Crown solicitor said she did not have instructions at this stage to accept the charity status.
But she confirmed that a rates re-evaluation is to be carried out.
"It's likely there will be some type of adjustment," the lawyer added.
Based on those submissions, Master Kelly suggested the court action could now be "wiped out".
Adjourning proceedings for four weeks, she added: "It looks like its possible this is going to go away."
Following the hearing a spokesperson for Land & Property Services said: "We will now work closely with Feile an Phobail to resolve this matter."