Bad news indeed.
Here is the log of what Lohan (Emil Paraglio, game designer) told us in #thief on irc.starchat.net on 00-05-24. I have cut the irrelevant babbling of the taffers out of the log so that the bad news become clearer. For all who wonder about the time, the timestamp is in MET.
[00:08] *** Lohan (firstname.lastname@example.org) has joined #thief
[00:08] <Lohan> Hey guys
[00:09] <Kyote> Lohan. Got any news for us?
[00:09] <Lohan> Okay guys...sorry, no happy news. As of today, Looking Glass Studios ceases to exist.
[00:09] <Lohan> You herad it here first
[00:09] <Lytha> so it is true.
[00:09] <Lohan> For those who don't know me...
[00:09] <Kyote> This is absolutely horrible. Lohan, we're all so very sorry. THIS is how the industry rewards originality...:/
[00:10] <Kyote> Lohan, what are you going to do? What's going to happen to you all?
[00:10] <Lytha> and can you tell us *why* this happened?
[00:11] <Lohan> I was a designer on Thief 2, did some work on Thief Gold, and was the lead designer on Thief 2 Gold...
[00:12] <Lohan> As of today at 4:00 pm, we all got the bad news.
[00:12] <Kyote> WHy did this happen Lohan, how could this have happened/ Thief 2 was selling vigorously.
[00:12] <Lohan> So that's it, guys. LG is closing its doors. Kind of like when Cheers shut down.
[00:12] <Kyote> Is this the end? Is there any chance another company will pick up the Thief license?
[00:13] <Lohan> Well, bottom line, Looking Glass owed money, and even Thief 2's sales couldn't combat that completely
[00:13] <VKGayleSaver> All I want to do is blame Eidos
[00:13] <Lohan> At this point what happens to the Thief series (if anything) and the LG name is anybody's guess.
[00:13] <Lohan> Everything is the property of the creditors
[00:13] <Kyote> Do the LGS people have any plans now, Lohan?
[00:14] <Lohan> Well, it's not really Eidos' fault. They haven't exactly had the best financial success recently either.
[00:14] <Kyote> The whole PC gaming industry has suffered recently. Even huge successes are hurting lately...
[00:14] <Lohan> LG people at this point are scrambling to find jobs.
[00:15] <VKGayleSaver> WHen did the business people find out about this?
[00:15] <VKGayleSaver> Why have they kept silent?
[00:15] <Kyote> I just hope to god someone has the brains to pick up this license and rehire you guys to do Thief 3...
[00:15] <Lytha> this explains why you lglass people were so silent in the last months in the forums, Lohan. :(
[00:15] <VKGayleSaver> Yes...I wish Tim Stellmach could start his own company
[00:16] <VKGayleSaver> He is extremely talented
[00:16] *** Kyote changes topic to 'It's official: LGS has shut down, Thief II Gold and Thief III cancelled.'
[00:16] <Lohan> We found out today at 4:00... not sure when the CEO, etc. knew. Not for too long now.
[00:16] * MaD-SaM begins to cry
[00:16] <Kyote> We all hope the best for you Lohan and your team. WIth success like Thief 2 under your belts, someone will snatch you guys up, I'm sure of it.
[00:17] <Lohan> Okay guys, I need to go. Just wanted to stop the rumors and give you something solid. Take care all. I'll be around. Cause y'know, I have some free time now. :)
[00:17] <Lohan> BUT...
[00:17] <Dalai> thanks Lohan
[00:17] <Kyote> Please keep in touch, Lohan.
[00:17] <CurePaz> Bye :(
[00:17] <Koobze> Godo of you to come around.
[00:17] <Lohan> for those who are interested...Thief 2 Gold was going to have 4 new missions.
[00:17] <Kyra> Bye :(
[00:17] <Kyra> Best of luck.
[00:17] <Lytha> best luck.
[00:17] <VKGayleSaver> can they release them?
[00:17] <MaD-SaM> you shouldn't of told us that lohan
[00:18] <Koobze> Time to inform the public of Thief: The Fan Project, now hiring.
[00:18] <Lohan> A Hammerite Temple, a small private college, a scummy city streets area, and a Necromancer's castle in the mountains (that was mine)
[00:18] <Catalyst> Best of luck to the LGS team, hopefully they will be able to work together again.
[00:18] <VKGayleSaver> A Hammerite Temple?...
[00:18] <CurePaz> An undead mission - what cruel irony
[00:18] <CurePaz> :(
[00:18] <Lohan> yep, you heard right.
[00:18] <Lytha> :(
[00:18] <Lohan> Okay guys -- later!
[00:18] <The_Thief> Farewell. :(
[00:18] <Lytha> cu later, Lohan
[00:18] <MaD-SaM> bye bye
[00:19] <Koobze> Bye
[00:19] <Lohan> Cheer up -- Garrett will never die!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
[00:19] <VKGayleSaver> We will see you
[00:19] *** Lohan has quit IRC (Quit: Leaving)