That story really makes me more suspect of them honestly. It really doesn't make sense to me that the one guy would some how think it was to his advantage to cut them out like that.
The Kickstarter funds weren't even meant for developing the Ant Simulator game. I don't know why he needs to refund the money, when the funds were only there to support the development of a series of game development tutorials that he was going to release for free on YouTube anyway. This whole situation, and the reporting around it, is very odd.
Until actual evidence comes out of court proceedings or the like I really can't trust anyone's side of the story. The business partner's story of him deciding to cut them out and not following up on a dev timetable sounds more plausible to me than the idea that they just took the money and used it on booze and women (I've seen the former happen in real life, the latter sounds like bad TV.)
Neither one has produced any real backup for their claims, and unless it goes to trial I doubt any will be produced.
So was there ever a follow up or a postmortem on this story?
I did a quick Google search and I couldn't find anything beyond the first sensational headlines and articles past a few days from when the story broke.