It's a sad day when any developer has to close up shop, but it's particularly devastating to learn such news has happened just ahead of the holidays. Such is the case with developers of BloodRayne and more recently, The Walking Dead: Survival Instinct, Terminal Reality.
According to Gamasutra, Terminal Reality is no more. Based on statements made by longtime studio member Jesse Sosa on his Facebook, it would appear the studio is shuttering. It should be noted, Sosa was not a current employee with Terminal Reality, and was merely commenting on his time there after hearing the news himself. For its part, Terminal Reality has made no official statement on its fate.
While Terminal Reality was also known for licensing its Infernal Engine, the studio was perhaps best known for the BloodRayne franchise. The Walking Dead: Survival Instinct, the developer's most recent title, wasn't favorably received, but wasn't expected to begin the death knell for Terminal. We still await official word, but for now, fingers crossed everyone effected is able to find new work in the industry soon.