Sean Gibbons, Manny Pacquiao's handler said that the fight will continue as plan. He even told in an interview that Pacquiao will be in the US by July to train with fame Freddy Roach for the Spence fight.
But we all know boxing politics, every one has a price, so if they indeed settle this lawsuit out of the court then the fight can proceed by August. Pacquiao wanted to pursue this fight, so we can't really say that it's time for him to hang up his gloves and retire for good and let the young bloods take over the boxing scene. If Floyd can still relevant with exhibition matches, then Manny can do it with real fights.
That lawsuit will not actually stop the fight, it has nothing to do with the fight so the fight will continue while Manny still has to face the lawsuit, however, it's not necessary that he will face it now, he will have to focus on his fight then he will face the lawsuit.
Regardless of the result of the Spence vs Manny fight, he will still make money and there's no doubt he can pay the damages demanded by the suing party.