They were previously ordered to pay Epic $9.2 million
If you haven't been following the Silicon Knights vs. Epic Games Saga, it hasn't been pretty. A North Carolina court ordered Silicon Knights to pay Epic Games millions ($4.5m in damages, and $4.7 in court fees), after a failed lawsuit by SK and a successful counterclaim by Epic. The counterclaim alleged that Silicon Knights was in breach of their licensing agreement, and the court seemed to agree.
Midway through 2013, we learned that Silicon Knights was still alive and fighting the claim, but it appears as if the tale may be at an end, as a January 6th appeal judgment has ruled in favor of Epic. The only real remnants of SK that we can really track out in the open is Denis Dyack, who jumped ship to Precursor Games and helped head up a Kickstarter that failed multiple times.
As someone who grew up with Blood Omen: Legacy of Kain, Eternal Darkness, and Twin Snakes -- it's pretty depressing to see a once great studio go out like this.