The company would have a reserve for their expected costs of the suit. If they reserved $200M, then they would have a negative net worth. As an investor you should make your own estimates as well.
Assessing risk is an important part of valuing companies. Lawsuits usually don't materialize out of thin air, and when they do, they usually aren't very strong cases.
One great historical case for Buffett was the Salad Oil Scandal. American Express stock plummeted because it had guaranteed loans backed by salad oil inventories that turned out to be fraudulent. It was facing a huge loss for the time, some were even afraid it might go out of business.
But Buffett went to lunch and saw customer after customer still using Amex cards to pay for their meals. He realized that the charge card part of Amex was still really valuable, and did the math on what the credit card business was worth and their maximum possible losses from their loans would be, and realized the stock was hugely undervalued and bought a ton.
Every business has remote risks of crazy bad things happening, it's why you diversify your portfolio if you are an active investor.
