Team Bondi staff are currently being offered either new positions at digital production studio Kennedy Miller Mitchell, or redundancy.
That's according to a report by Develop, which claims that both intellectual property and assets belonging to Team Bondi have been sold to KMM, a Sydney studio currently working on penguin blockbuster Happy Feet 2.
So far the L.A. Noire developer has failed to comment on rumours and no legal paper work has been filed with the Australian Securities and Investments Commission detailing any sell-off or change in the business.
The news follows rumours that Team Bondi boss Brendan McNamara had visited KMM to strike a deal with the production company.
In July leaked emails from Team Bondi highlighted poor working conditions at the studio, with developers forced to crunch in order to complete L.A. Noire - a game that had been in development for seven years once it was eventually released.