Sylvester Stallone and Jennifer Flavin Working on Divorce Settlement, No Prenup

Sylvester Stallone and Jennifer Flavin are moving towards a settlement in their ugly divorce, putting a hold on court proceedings to hammer out a deal in private ... and shockingly, we're told there was no prenup in place.

According to new legal docs, obtained by TMZ, Sly and Jennifer both requested an order of abatement -- which the court granted -- in their divorce down in Florida. This means filings have been put on hold, however, sources connected to the case say the divorce is still happening ... they just don't want the negotiations made public.

The docs state, "The Parties agree that is in the best interests of each of them individually, and more importantly collectively as a family, to resolve all issues attendant to the dissolution of their marriage in a dignified, amicable, and private manner out-of-court."

What's more, we're told the two did NOT have a prenup when they got hitched back in 1997, seemingly leaving hundreds of millions of dollars up for grabs as the earnings of both are community property.

Of course, Jennifer has her popular Serious Skincare cosmetic line, and Stallone's got a string of Hollywood blockbusters including the "Rocky" franchise.

Remember, Jennifer filed for divorce from Sly last month following 25 years of marriage, saying their relationship was "irretrievably broken." She also accused him of moving marital assets, something he's denied.