Welch threatened to sue Lovato if she didn't apologise for allegedly leaving the dancer with a black eye and bruised cheekbone, but the two parties reached a financial settlement in December (10).
The news emerged shortly after Lovato pulled out of a world tour with the Jonas Brothers and checked into rehab for "emotional and physical issues".
She has since revealed she underwent treatment for bulimia and anorexia after years of suffering, and also discovered she was bipolar - and admits the altercation with Welch was her breaking point.
The star tells People magazine, "I was manic. I was hurt. I just exploded. Everything built up to this point, and I took it out on someone who was my friend. It's normal for someone to have a breakdown, but what's not normal is to hit someone. I felt horrible."