Australia’s Bonza collapsed and Canada’s Flair Airlines has seemed on the verge of collapse while their ostensible parent company has been called a giant fraud moving money around and siphoning cash.

A source of financing for the parent may be an insurance company, and losses in the airline business (or fraud!) would cost it a great deal of money and make it less credit-worthy. So the A.M. Best ratings agency moved to downgrade its estimate of their credit-worthiness. And the company is suing the ratings agency to stop them.

This wild tale was summed up on Thursday by national treasure Matt Levine,

Earlier this month, a lender to 777 called Leadenhall Capital Partners filed an absolutely wild lawsuit against it, claiming that it had borrowed hundreds of millions of dollars secured by assets that it didn’t own or that it had pledged to multiple lenders. (Here is the extremely fun complaint, featuring an anonymous tip and alleged recorded confessions of guilt.) The lawsuit also alleged that an insurance company called Advantage Capital Holdings, known as A-Cap, had loaned 777 billions of dollars and was secretly controlling it; “a representative for A-Cap said the claims made by Leadenhall are ‘sensational and unfounded.’”

A-Cap gets financial ratings from A.M. Best Rating Services Inc., a nationally recognized statistical rating organization. Two A-Cap companies, Atlantic Coast Life Insurance and Sentinel Security Life Insurance, have A.M. Best financial strength ratings of B++, which is “good.” In March, apparently to get out ahead of the 777 stuff, A.M. Best decided to downgrade them to B-, which is “fair.” And the insurance companies sued to stop the downgrade. This week, the Financial Times reports:

AM Best, the specialist rating agency for the insurance sector, has said its credibility risks being “irreparably damaged” by a legal bid to prevent it downgrading US insurers exposed to Everton football club bidder 777 Partners.

The agency is arguing in a New Jersey court that it has a First Amendment right to publish its opinion on a company’s financial strength, after two US insurers accused it of using “flawed methods, improper assumptions, and demonstrably false data” to downgrade them.

It seems like what you want ratings agencies to be able to do is call out financial frauds – and the downstream effects of financial frauds – when they learn about them. Indeed, you want them to learn about any potential such frauds.

At the same time they have contracts, and are paid by the companies they are rating, and those contracts have requirements for how those ratings will proceed. When a company doesn’t like their rating, I guess they can get courts involved to determine whether the ratings agency has followed the letter of its commitments – and potentially delay any downgrade pending that adjudication if the courts will go along.

On the other hand, doesn’t suing your ratings agency to stop them from downgrading you cause a sort of Streisand effect? I only knew about this downgrade because Matt Levine wrote about it, and Matt Levine only wrote about it because the insurer sued.