The U.S. Treasury Department and an Islamist charity considered "the progeny" of a Hamas-financing network in America have settled litigation over government attempts to freeze the group's assets.

The agreement, announced by the American Civil Liberties Union on Tuesday, amounts to a do-over for both sides. Ohio-based KindHearts for Charitable Humanitarian Development agrees to shut down operations in exchange for a release of its remaining assets by the government. KindHearts closed down "because further charitable work would be best pursued under other auspices," the agreement says.

Charity officials are free to launch a new organization "to engage in charitable activity in the Middle East or elsewhere" but Treasury takes no position on its operations.

KindHearts opened its doors in January 2002, one month after the Treasury Department froze the assets of the Holy Land Foundation for Relief and Development.

"The purpose of creating the Holy Land Foundation was as a fundraising arm for Hamas," U.S. District Judge Jorge Solis said in 2009, during a sentencing hearing for five former charity officials convicted of illegally routing more than $12 million to the Palestinian terrorist group.

The Treasury Department froze KindHearts' assets in 2006, finding it, too, sent money to Hamas-affiliated organizations in the Middle East. But the government suffered adverse court rulings that it violated KindHearts' due process rights in the way it carried out the freeze.

The settlement, which was signed in late November, comes "without any admission of liability or wrongdoing by either Party" but requires the government pay $330,000 in attorney's fees. KindHearts filed a public notice of its dissolution, around the time a judge in Ohio was notified a settlement had been reached.

The agreement lists four recipients to which KindHearts will send its money – the United Nations World Food Programme, the U.N. Children's Fund, U.N. Relief and Works Agency for Palestinian Refugees and Mercy Corps. A mosque, Masjid Saad, can accept the charity's physical assets.