In a statement posted to the front page of the FurNation website, owner and administrator Nexxus blamed the closure on a lack of funding and a debt of over $2,000 of hosting fees going back several years.
Email accounts hosted on FurNation will continue to operate, however, hosted websites will disappear on May 16 and will run on FTP only until the end of the month. All FurNation branded regions in Second Life - with the exception of FurNation Prime - are to remain open.
Article sourced from: http://furnation.com/index.php?showtopic=61783

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However, there is now a movement to save the FurNation forum, led by a couple of the site staff. http://furnation.com/index.php?showtopic=61814