Getting money from one publisher and channeling that chedda into another publisher's project is par for the course in this industry
For serious. When I was at Accolade, my neighboring cube-mate was working on Bubsy 3D. Nearing completion of the game, we received a tech demo for a new project from the external dev making Bubsy. It was incredible; it was hard to believe that it was even the same company that was pawning off the legendarily bad Bubsy on us. It was hard to believe it was even running on the same hardware, except that we were running it on I our own devkits.
The dev wanted to give us a chance to pick up the project, grab first dibs for publishing. The management was so, so, pissed off. We could all see exactly where our money had gone, and it wasn't to Bubsy. They declined.
I was all for picking it up, and being more clear in subsequent contracts. I mean, we had already financed the new engine, and refusing to cooperate just meant we would never see any benefit from that money.
The dev went on to make Syphon Filter, and was purchased by Sony. Accolade was bought by Infogrames and more or less disassembled for IP which was never heard from again, save Test Drive.