Christopher Sandberg, co-founder of Avalanche, told about this in an interview with MinnMax.
As Sandberg recalls, the developers were engaged in the game for almost two years, until they curtailed the project in 2012. This had to be done due to a conflict with Disney – the company wanted to release the game as soon as possible, but for this Avalanche would have to hire another 70-80 people. According to Sandberg, such an act would “break” the studio.
Sandberg did not go into details about the game. But he mentioned that it would have hand-to-hand combat in the spirit of Batman Arkham and the ability to fly.