Whelp I scourged AGDI's forums and looks like the legal battle thread was one of the ancient threads they deleted (remember, this was back in like 04 or 05, so we're talking four to five years ago..... gods I'm old), but I read thru a few of the more recent ones. The reason they didn't get shut down on KGI and KGII was they had an agreement with Vivendi before they even started. However, despite this agreement, it did not extend to the Quest for Glory IP, and when they rightlfully thought it did and started on it, they got a C&D. However, they immediately mailed them back and got into bout a week-long back-n-forth negotiating, until they finally got a go ahead, with the stipulation that it was Non-Profit and that Vivendi would review the final product before it was released for any errs to their IP. It doesn't help you guys that the Kings Quest and QFG remakes were built on another gaming platform entirely, although it definately does help that they were using copywrited material (including the AGS versions of sprites from old Sierra games). Due note also that they recieved this C&D a year after Sierra was disolved, thus it wasn't the original party but the owners of the original property. It should help you guys out that if you're using the SNES chrono trigger, that game and its engine is moved into the Obsolete Technology clause of copywrite laws (in that the technology is over 10, if not 15, years old, and thus the engine itself is no longer considered copywritten but a free-to-the-public property). While Square-Enix may still have some copywrite on the Chrono Trigger property itself, the rom falls under Obsolete laws.
hope that gives some hope to you guys. I'd love to see CE or something like it come back from the dead!