There's a Runic Games Q&A on GameBanshee where Runic's Travis Baldree and Max Schaefer answer questions about the new company. Of course curiosity still lingers about what happened at Flagship Studios, and Max also answers a question about that:

I could go on for days answering this question. The shortest version is that we ran out of money. There were many factors that contributed to that, some of it our fault, some of it unfortunate circumstance, some of it other people's malfeasance. I'll focus on what we did wrong. Since Mythos was originally designed as just a test, we were under-capitalized by the time the international rights were established. What started as a free network test had blossomed into a fully-featured casual MMO, and we just didn't secure the necessary funding to complete it, though not for lack of trying. And when Hellgate: London didn't do as well as hoped, our fate was sealed. We've learned a lot from this experience, and made mistakes we'll never make again.