Well we don't know the whole story yet. If CIG did buy full rights to the engine or not, if they terminated the old contract before switching engines etc.
If they somehow managed to terminate the contract, if they somehow bought full rights over and above source rights, then this should have been communicated years ago when CryTek first started asking CIG to pay up.
CryTek seems to think the GLA is still in effect and it's going to be downright awkward if the first piece of paper CIG hands over is the notice of termination. Said lawyers might ask why they weren't told.
Is it possible? Sure.
Is it <<likely>>? I wouldn't think so. If all CIG has to do is hand over a piece of paper to make this go away, then the question is...why has it not done so? Barring anything iffy, the most obvious answer is because it cannot. Because said paper does not exist. CIG have had two years to produce this documentation and they haven't done so.
It seems safe to assume it doesn't exist. Not impossible that it does. Just unlikely.
If they can't win the lawsuit, CIG will try to settle it with a big lump-sum of money for CryTek maybe shares in CIG and co-ownership of SC if necessary. Worst case is CIG can't use CryEngine nor the assets made with CryEngine. Then they'd need to remake a lot of stuff and tech with Lumberyard or another engine. Don't know if they'll have enough money left to do that.
Again, if CIG could make it go away with money...why not do so before now? Shares and co-ownership are also only worthwhile if you believe the company has a future.
And as the worst case is that CIG loses the engine and assets, will they then be able to switch to Lumberyard? Depends on how far that injunction goes. Problem is that they will have also lost of their custom code, and will have had to pay CryTek millions on top of lawyers fees.
And no - they probably wouldn't have the money. Noone in their right minds should fund Star Citizen right now, not until this case is settled. Indeed, those who have invested would be wise to try and get refunds. The only way CIG can really calm its backers is to make public a credible defence or do something to end this quickly. But if it could end this quickly, they and CryTek would likely have come to some agreement before now.
This is probably the worst thing that could have happened to Star Citizen because whether or not CIG is guilty - and it looks guilty - there is no easy way out of it.
CryEngine could not do all the procedural stuff (full-scale planets and procedural cities) and the modular system etc. CIG did improve the engine by hiring former CryTek employees.
That isn't improving an engine so much as adding functionality needed JUST for your game and ONLY your game and which is of limited, if any, use elsewhere. One could even argue the transition to 64 bit wasn't an improvement because there are few games which need that degree of precision. And most of those get-by developing their own engines.