With the demise of Factor 5 I thought this rumor wasn't going to come true. And then today I saw an article on Gamasutra
detailing how former Factor 5 employees are suing White Harvest for fraud. Allegedly White Harvest is run by the same management that ran Factor 5 and the ex-employees think assets of Factor 5 were fraudulently transferred to White Harvest. In any case, the part that really caught my attention was this.
Factor 5 most recently released the dragon-based flying game Lair, which underperformed commercially. But according to the report, Factor 5 wasn't done with Star Wars. [Plaintiff's lawyer James] Smith claimed that Factor 5 founders transferred work on a Wii version of Star Wars: Rogue Squadron to Blue Harvest.
LucasArts apparently was the biggest creditor of Factor 5 due to a $4 million loan they received from LA back in 2003. So it seems like the game is indeed in the works but who knows how development will be impacted by the legal issues stemming from Factor 5's closure?