"OnLive ... will continue to operate," the statement read. "...there is no expected interruption of any OnLive services."

It was a statement that read as an assurance: everything is fine, we're still here, it's business as usual. But it was clear that everything wasn't fine. Earlier yesterday, it was reported that all of OnLive's 150-200 staff were laid off. Now, multiple sources have confirmed that the streaming game company will be filing an Assignment for the Benefit of Creditors (ABC), an alternative to bankruptcy, and Polygon understands that the company will soon issue a statement to better explain what's going on.

From the perspective of former employees, that statement could be very welcome, because sources tell Polygon that a group of the unlucky souls who received their pink slips on Friday are weighing their legal options. Reportedly, the company laid off the entire staff on Friday, only to hand out offer letters to "a large percentage" of that same staff for a new company, and we're hearing that those individuals are confused as to why the company would dissolve only to re-form hours later.

Though rumor has it that the OnLive game service was serving as few as 1,800 individuals during peak periods and money was tight in recent weeks, some sources say that the company was fending off offers from the likes of Sony and Hewlett-Packard that founder and CEO Steve Perlman deemed too low. While there's no guarantee such a buyer would have retained their services — and in California, employment is "at-will" — some employees are angry at what might appear to be a legal loophole that could allow OnLive to quickly shed any perceived value they might have had in company stock, even if that's not the whole truth.

So, what's an Assignment for the Benefit of Creditors, anyhow? The idea is that a company that's not doing so well will transfer all its assets to another one, which is then in charge of getting the company's investors (including HTC, AT&T, Autodesk, British Telecom and more) the best deal possible for the money they'd invested. That could mean simply running the business more efficiently — say, with fewer employees or commitments — if that's where the value lies and if dissolving the original company allows the new owners to legally and effectively do so. Another possibility, though, is that the "newly-formed" firm that receives OnLive's assets is simply a shell company, designed to prep OnLive's assets for a quick sale, or perhaps even leverage OnLive's patents in the streaming game and desktop space against competitors in the market.

That last idea could be rather intriguing. Last month, Sony validated the nascent idea of cloud gaming by buying rival Gaikai for $380 million... and GameStop, which bought rival Spawn Labs in 2011, plans to introduce a cloud gaming service in summer 2013.

Sean Hollister contributed to this report.

Update: This story has been heavily modified from its original version, which contained inaccuracies.