You say management was not being cheap, and then list everything cheap management does.
I'm familiar with the dynamics of such places.
If they actually go through a proper lawsuit, my guess is the lawyers will cost more than whatever they'd have to pay for redundant backups by an order of magnitude. Which means they probably won't go to court.
You're right, management should have "decided" to triple their budget in order to have double staff, have management with IT experience, have triple the IT staff and pay them double, and pay more for IT vendors/equipment as well, while keeping programming the same. Or heck, they should have increased programming too, why not. Maybe quadruple the budget.
I don't know why they didn't decide to do that, I guess they just make poor decisions to be cheap. Otherwise it's a complete mystery.