This link says the fight is no longer happening:
www.ballerstatus.com/2011/08/14/james-toney-talks-ken-shamrock-fight-calls-out-ufcs-dana-white-rampage-jackson/
"Update: Team Toney updated us, letting us know the planned MMA fight against Ken Shamrock is no longer taking place. At press time, a reason was not given."
Only one place has this, and it's the link above. I don't know if it's correct or not, but I suppose we'll find out soon.
If Chael said it, it doesn't need further confirmation.
I doubt it's legit... 
Ballerstatus.com is a legit source.
Chael is Hammer's Hamil
pfft!
Ken Shamrock has destroyed his legacy. PATHETIC
Ken Shamrock needs to retire from fighting for good.
1 Sonnen.... Again