I am not a lawyer in Texas or New York. I am not rendering legal advice. Any opinions expressed are my own and do not represent those of any employer, past, present or future.
Based on a quick scan of the counterclaim by Hudson- "you did not make parts to spec, you did not fix it when we complained, you knew when we did the deal that you were essentially a single source supplier so if your stuff was not in spec, it was going to cause us real problems. We tried to work it out and you still did not get us in spec parts in a timely fashion. Therefore we are not paying you for out of spec parts." PS- we should be litigating this in TX as per the terms of our offer."
This is likely to be a lose/lose for both parties. I suspect the machining company cannot take the hit and Hudson cannot make guns with no parts and likely does not have the credit/cash flow to get someone else to do it.
The thought that Hudson should try and sell the intellectual property is a good one. I wonder if then can even do that given the litigation they are involved in presently and whether the answer changes if one or both parties end up in bankruptcy/bankruptcy court separate and apart from the pending suit.
YMMV Greatly. FWIW.