In a comment to Kotaku, a spokesman said that the developer was closed because "it was operating in a highly competitive industry, and the business didn't scale profitably in the manner we had expected."
The engine Instant Action used to power Monkey Island, Torque, is now being sold off, along with the dream of playing MI2 in a browser as well. Sad news indeed.
Source: Torque Powered (via Kotaku)
Not surprised they went under, the tank game seemed to be their best when I was there, and it was mediocre. The MI thing seems cool for 5 seconds till you realize running the game in a browser probably uses more computer power and resources (ie internet and a browser that can handle it) than just running scummvm (which works on everything including a phone or any other modern handheld) locally.