If you are an experienced litigator, you get threatened all of the time with horrific scenarios if you don't bend to the other side. Most of the time it is BS.
In this case, all the Big Ten has to do is put 3 or 4 coaches on the witness stand who will explain how serious Michigan's sign stealing cheating was. Michigan will put on opposing evidence. Big Ten will believe the coaches alleging serious consequences. Courts will say that Big Ten has to make a decision in the face of conflicting evidence and that evidence relied upon by Big Ten was reasonable. Case over.
If Michigan wants to go after other universities on different matters it can.
Also, I just remembered that about 9 months ago, I actually litigated a small matter with a lawyer on the staff of Michigan who was also licensed in Ohio. She wrote a letter to a landlord on behalf of her daughter/tenant using your parade of horribles tactic. She didn't understand that tenants can be sued for attorney fees in Ohio in addition to landlord being sued. Got rid of her for about 1/10th of what she asked for damages with respect to the return of a security deposit.