http://www.vgchartz.com/article/250245/rockstar-vancouver-shuts-down/ Sucks, but at least the employees won't go unemployed.
Now there is not going to be a Bully 2, which sucks, but at least these talented folks can go and make GTA V perfect :-)
Bully II is still possible. Rockstar North is developing GTA V and Dan Houser already hinted at Bully II happening after Max Payne III.
I forget, was Max Payne 3 the first game to show off Rockstars new engine that they're going to use for GTA V? Or is GTA V going to show off the new engine? I know that they're working on a new engine for GTA V, so I'm not sure. But honestly I would prefer, if I were them, to release GTA V first (its been a while since we've heard anything about the game actually) than afterwards work on Bully 2, with the engine (the first Bully used the San Andreas engine only it was updated a little with a few tweaks)
Max Payne III uses the same engine as GTA IV. It was the improved animation system that was a big thing. The engine GTA V will be using hasn't been confirmed, but it will probably still use RAGE + Euphoria.
Aw, that's a shame to see their studio close. Hopefully, this won't get in the way of some potentially awesome games that they had lined up.