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However I don't believe any one has publicly spoken about whatever the legal troubles were or perhaps are. It's a good sign that the game has finally been released on Steam.
For my money I'm betting Victor Ireland is responsible for all the problems.
Game Arts would then put out Lunar: Dragon Song, but it was a poor effort and received a very harsh negative reception, leading Game Arts to essentially shelve Lunar in favor of focusing on their other RPG series, Grandia, which is also dormant these days.
Always a safe bet whenever that clown is involved. He's the reason the Lunar games didn't come to the Genesis Mini 2 in the US despite being some of the most asked for games by fans over here.
As far as your question OP, best anyone can tell, GungHo owns the rights to the franchise and could make a 3rd game if they chose to do so. As has been mentioned, there's been quite a few legal battles over the franchise, but given that this collection is even happening at all I'd imagine that there isn't any ongoing litigation and if this collection does well then hopefully the 3rd part of the planned trilogy can finally see the light of day. According to some of the original creators, there were internal discussions about making Lunar 3 after 2 did so well, but there were concerns about the Sega CD console being at the end of its life span so they didn't move forward with it at the time. The lawsuits that JCKLNTRN mentions happened shortly after that, so any chance of the game being made totally ended with that. The boss designer of the first 2 games has said that the ideas they had for Lunar 3 essentially make up the Epilogue portion of Lunar 2, so there's that.
https://www.youtube.com/watch?v=ek-PmkWjdlg