I am very sorry to hear about this as I had been looking forward to the release for some time now. It's unfortunate, but compliance with the letter is probably a wise choice. As someone with an intellectual interest in IP law, I would be very interested in seeing all the arguments made and resolved because this is really an unusual claim that SE is threatening to bring. I would not, however, want to finance it, so I can't blame the CE team for exercising their discretion. One of the more interesting arguments (well, to me anyway) is that, at least with regards to a potential civil copyright infringement claim, it should arguably be barred by laches due to an unreasonable delay in asserting their rights. There's currently a split in the federal circuit courts about whether the laches doctrine can apply to copyright infringement claims with the 6th, 9th, 10th, and 11th circuits having held that laches may apply in "unusual" circumstances, and the 4th circuit holding that laches can never bar a copyright infringement claim brought within the statute of limitations.
If this had occurred a couple of years later, then perhaps I could have been of some practical assistance, but under the circumstances I can only offer my moral support for your continuing efforts to advance the series we all love.
Disclaimer: nothing in this post is legal advice or should be used as a substitute for legal advice, no attorney-client or other relationship is intended to be formed, etc...