Actor Shia LaBeouf has been encouraged to settle a financial dispute with his uncle out of court for the sake of his family.

The Transformers star and his mother Shayna filed suit against her brother, Barry Saide, earlier this year (13), accusing the defendant of reneging on a deal to repay an $800,000 (£533,330) loan in installments beginning in January, 2011.

Saide hit back at the legal action with a countersuit, insisting his famous nephew was trying to bankrupt him, despite allegedly lending the pair money before the actor made it big.

The case was heard in New York's Manhattan Supreme Court on Monday (18Mon13), when Justice Eileen Bransten urged to two sides to reach an agreement privately, telling them, "A resolution would be better for the family."

LaBeouf's lawyer, Robert Gage, claimed the actor and his mum had offered to take a 25 per cent stake in Saide's employment companies as an alternative for the cash repayments, but he reportedly failed to honour that agreement either - and now it's too late.

Gage told the judge, "We're beyond that (company deal) now."

However, attorneys for both sides agreed to continue talks in an effort to work out a settlement.