The problem is... they sue people who have the nerve to ask questions about their legitimacy. Okay, I won't ask any questions, nor will I call them frauds. I will simply post a link to their website and you can decide for yourselves... You shouldn't need a Ph.D. in Japanese History to smell something fishy.
Now, you might ask why they would sue anyone about this nonsense. Easy, they want someone to be the straw man so they can get a court in the United States to certify that they are a ninjutsu system. Consider this, can you prove, to a reasonable person to the standard of "more likely than not", this negative: Konigun is not a ninjutsu system? Keep in mind that the average, reasonable person has no clue about martial arts, let alone the complicated history of ninjutsu. You'll need to prove there was no mysterious, lone Konigun ninja who taught the current master before dying and leaving no trace -- as a good ninja would.
Also keep in mind that it is still difficult to prove to elite, highly educated martial artists that Bujinkan and the other X-kans are teaching legitimate ninjutsu. (Especially since I don't think Hatsumi will be willing to leave Japan with the authentic densho to produce what evidence he can to a court of law.) At a minimum, Konigun walks away from a law suit with "proof" that the X-kans are no more legitimately "ninjutsu" than their art. And they can use that in their phony advertising.
What is it they say about wrestling pigs in mud?