This is what I recall, based on web information, which is likely rumour, innuendo and half-truths.
The graphic novels were never really going to happen, because DC apparently still has the licence.
The novels:
Mongoose gained the licence from Warner Brothers to publish new novels. This was licenced and therefore official.
JMS objected publicly and said they were not canon because he had not approved anything.
Mongoose and JMS got together.
JMS read some early drafts, didn't like them, and was openly and publicly critical.
Mongoose stated they had agreed not to continue with this.
During this process a preview copy on Matthew's Sprange's novel Visions of Peace was printed and sold at aMongoose event. I believe there were very limited numbers - 50, I think.
Recently Ranger Dawning, another novel, was made freely available on the internet by the author, but pulled after a short time for copyright reasons.