Jaramy Chism, 24, has been released from custody. His former co-defendant, Kimberly Hughes, remains held on $2 million bail.

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MOUNT VERNON — Prosecutors have dropped arson and murder charges against one of two defendants in what authorities describe as a deliberately set fire that killed two children in Skagit County.

Jaramy Chism, 24, has been released from custody. His former co-defendant, Kimberly Hughes, remains held on $2 million bail.

Both were arrested July 15 after an early-morning fire at a home where they had just been evicted. The fire killed a 6-year-old boy and an 8-year-old girl, and it injured the children’s parents and one other resident.

Investigators have said they believe both Hughes and Chism were involved — and that Hughes, 32, had threatened to burn the house down days earlier. Lawyers for the pair say they deny involvement.

Chism’s attorney, Jon Scott, said Monday that he had requested a preliminary hearing because he did not believe prosecutors had enough evidence to continue detaining his client.

Prosecutors dropped the charges rather than go through with the hearing, which had been set for Monday. The charges could be re-filed later.

“He did not do this,” Scott said. “He didn’t start the fire. He didn’t plan with anyone else to start the fire.”

The charges against Chism and Hughes were felonies, but prosecutors filed them in Skagit County District Court, which doesn’t have jurisdiction over felony offenses. Under Washington law, that procedure is allowed as a way to give prosecutors more time to investigate before filing formal charges in Superior Court.

Hughes has not requested a preliminary hearing, her attorney, Wes Richards, said Monday. He declined to say whether she would do so. Prosecutors have until Aug. 18 to decide whether to charge her in Superior Court.

The fire began about 2 a.m. on July 15. A tenant, Jacob Motz, told investigators he woke up when he heard fire crackling and saw flames near the front porch.

Homeowner Bryan Bachofer tried to fight the fire while his partner, Jessica Starr, tried to evacuate their children from the second floor, a Snohomish County sheriff’s deputy wrote in a probable cause statement.

The house quickly became engulfed. Bachofer and Motz ran out the first floor. Starr managed to get the children to a second-floor window, but she fell through when she tried to push a screen open, the deputy wrote. The children did not make it out.

Bachofer told investigators that he suspected Hughes and Chism of starting the fire. Chism had worked for him, but he had been fired two weeks earlier. Bachofer had evicted them from the house last Tuesday, he said. On July 8, he told police, Hughes had threatened him, saying: “I will sue you or burn your house down.”

A deputy found Chism and Hughes several hours after the fire in a tent pitched in the backyard of a Sedro-Wooley home, the probable cause statement said, and there was a gas can in the back seat of their car.

They told investigators they had been at the Sedro-Wooley address all night, the statement said.