The lawsuit, filed in 2008 by Abu Dhabi Commercial Bank and Washington's King County argues Moody's and S&P knowingly misrated a structured investment vehicle for Morgan Stanley, which the bank then sold off to unwitting investors who suffered losses shortly thereafter. The SIV called Cheyne contained notes backed by supbrime mortgages and it received the "highest credit ratings ever given to capital notes," according to the judge presiding on the case. Those notes failed during the credit crunch, and plaintiffs argue the securities were knowingly misrated because of high fees paid by the issuer, Morgan Stanley, which is also a defendant in the case. Now they are litigating Moody's and S&P for fraud, in a last push to hold the agencies accountable. Cutting against Einhorn's short bet on Moody's, many remain unconcerned about the lawsuit and are just one verdict away from having significant legal risk from the crisis removed. Buffett also appears highly confident. Since 2010, The 'Oracle of Omaha's' pared his stake in Moody's roughly 10%, but he remains the company's largest shareholder, owning nearly 13% of its shares as of June 30, according to filings with the Securities and Exchange Comission. Year-to-date share gains in excess of 30% and a string of recent analyst upgrades for Moody's signal some are advising against Einhorn's bearish call and are siding with Buffett. "While the Abu Dhabi case likely moves to trial in Feb. 2013, the company views the large number of favorable precedent decisions (and lack of "smoking gun" from extensive discovery) as strong indicators of a positive outcome," wrote Piper Jaffray analyst Peter Appert, in a Sept. 13 note to clients upgrading Moody's 2012 and 2013 earnings estimates. Strong debt markets and bond issuance amid record low interest rates are proving a tailwind for Moody's, added Appert. "We are raising our 2012 revenue and EPS estimates, due to a surge in bond issuance, along with strong growth prospects at Moody's Analytics," wrote Benchmark analyst Edward Atorino, in a Sept. 17 note to clients that upgraded Moody's to a buy from hold and gave the agency a $51 a share price target. In the upgrade, Atorino didn't explicitly address pending litigation, which was only referenced as a boilerplate risk factor.