Flagship boss Bill Roper has confirmed reports that the studio has fired "most employees".
However, a statement issued by the developer says it has not closed down and that it still owns the rights to both Hellgate: London and Mythos.
"It is with deep regret that I must announce Flagship Studios has laid off most employees," Roper told Voodoo Extreme. "However, the core management and founding team members are still at Flagship.
"The past five years have been an incredible experience for us, but unfortunately we couldn't sustain the size of the company any longer."
Hellgate will not be taking on any new subscribers (er), and those already in there will not be billed for the time being.
Earlier this week Flagship looked set to close its doors and lose Mythos to Korean company HanbitSoft and Hellgate to US money firm Comerica.
Perhaps it has since come into some money. The future of Hellgate: London and Mythos to follow, presumably.