Last month we reported that the Dead Island 2 developer Yager had been removed from the project by publisher Deep Silver. As a direct result, Yager Productions is now in the process of insolvency proceedings.
Yager's managing director Timo Ullmann admits in a statement (via Games Industry) that it is "a direct result from the early termination". As a sub-division of Yager Development, Yager Productions' only purpose was development of Dead Island 2, so filing for insolvency does protect staff wages for the time being.
Meanwhile, Yager Development continues to operate and are working on capital ship space combat title Dreadnought (with publisher Grey Box) as well as other unannounced projects. It's unclear whether any Yager Productions staff will be hired by Yager Development and whether there are any debts owed between the two Yager entities. Naturally, we extend our thoughts to those who lost their jobs as a result of this, and we hope they'll find new employment soon.
Yager worked on Dead Island 2 for three years before it was yanked from them. No new replacement studio has been announced as yet, and therefore it's possible that the project will be completely rebooted at a new studio.