It's a very long a complicated story, but the gist of it is "They weren't making money and were doing stupid things." Before Dinosaur Hunter was released, they were almost bankrupt; the Valiant Comics buy-out turned out to be a questionable decision that led to a few long-time Valiant employees leaving and the comics' quality suffering as a result, which meant a great decrease in sales (ask any Valiant reader about Birthquake and notice how they cringe). The first Turok game pretty much single-handedly saved the company. When the comics side of the company was re-branded as Acclaim Comics, they rebooted all of their titles. This also led to a decrease in sales as a number of readers left as a result of their favorite characters becoming unrecognizable.
Comics was not what Acclaim was really interested in, though. It was video games. The reboot was the result of a decision by the higher-ups to make comics that would easily translate in the video game medium. This is why the Turok, Shadowman, and Armorines games exist in the first place. But after Seeds of Evil, the games began to get mediocre reviews (and were selling nowhere near what Acclaim had hoped they would). So Acclaim decided to cut costs and dial back their comics division (it wasn't making very much money any longer, remember) before finally axing the entire thing in 2000 (the Evolution tie-in comic in 2002 was an anomaly). Since comics couldn't be counted on and video games were only sort of making a profit, Acclaim turned to weird marketing strategies.
There were a few marketing things that Acclaim did that cost them a lot of money that they were unable to recoup. For Shadowman: 2econd Coming, Acclaim actually paid relatives of deceased persons money to advertise the game on their gravestones. For Turok: Evolution, there was the "Name your Labor Day baby Turok for a year and win $10,000!" Both of these were not well received. There was also a guy that supposedly stayed in line for however many days in order to be the first to buy Turok: Evolution, but it turned out that Acclaim had paid him to do it.
And among all of this, there was the release of BMX XXX, a game that originally had Dave Mirra attached to it (he left as soon as he realized what direction the project was heading towards). The less said about that the better. There were many other games that Acclaim produced (a lot of racing, wrestling, other sports), but they all suffered from the "mediocre reviews, lack of huge sales" thing.
So yeah, after all of that, Acclaim went bankrupt and had to sell off all of its assets in an attempt to settle its $100 million debt.
