Big Huge Games was working on Kingdoms of Amalur: Reckoning 2, Joystiq's rumouring this afternoon.
The 38 Studios-owned developer was in the pre-production stage of the sequel following the release of the first game back in February of this year.
Reckoning 2 was being shopped around by BHG and 38 to other publishers after EA, who published the first Reckoning under EA Partners, declined to take it on due to "executive politics".
Some of the new inclusions into the game would have included higher quality graphics, no loading screens between areas, expanded combat animations and "greater effort on the world".
Speaking to Joystiq, a source said Reckoning 1's development was funded through EA publishing money and not Rhode Island taxpayers money.
"Reckoning was developed with EA publishing money, not Rhode Island tax dollars," its source said. "It had nothing to do with the 50 million dollars from RI. That money went directly to the MMO project."
It was reported last week that all of 38's workforce had been let go and BHG's workforce had been let go after the former's financial issues with the state of Rhode Island were made public.
As well as the Reckoning games, 38 was also working on a MMO set in the Amalur universe, Copernicus.
There's a lot more there through the link.