Some context: The CEO and President of Nintendo, Satoru Iwata, passed away recently. He is credited with saving EarthBound from cancellation by joining the programming team.
You might be conflating this with the Super Smash Brothers Melee story, where Iwata left his Nintendo HQ corporate strategy role to join HAL Laboratories for QA & Bug Fixing so that the game wouldn't miss its ship date (this was 3 months before the launch date).
Whether Earthbound was to be cancelled or not I don't know, but it's a similar story in that he was the president (in the Earthbound case, of HAL laboratories) but he joined the programming team. Unlike Smash, though, he rewrote Earthbound entirely in a few months: http://kamedani.tumblr.com/post/45700864819/mother-2-re-rele...