According to this Bingegamer piece, Flagship boss Bill Roper has issued a statement on the state of the developer, saying that while everyone has been laid off, the company is still alive.
"It is with deep regret that I must announce that Flagship Studios has laid off most employees," he said. "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."
More through the link.