In the episode Jerry wants to get signal for his tv and Kramer insists he should get illegal cable because apparently the cable companies have some sort of dispute and there is the expectation this problem will last for years as the companies sue each other
I also assume this wasn't an issue with money because even if he's not rich Jerry is wealthy enough that he should be able to afford it
I want to know what was the problem and I also want to know what happened in the end
Finally I assume they were making reference to real life because otherwise they would have given more context for why Jerry couldn't have cable. The writers knew this was an issue their audience would be familiar with
The second series of Seinfeld premiered in January 1992, so we can date this reference to something which has happening in the late 1980s or at the latest 1991.
I think it very likely that the reference is to one of a number of lawsuits generated as a result of the merger between Time and Warner Communications which took place in 1989-1990.
The original merger proposal was between Time (the owner of HBO and, importantly for Seinfeld, the owner of Manhattan Cable Television) and Warner Communications (the owner of extensive cable operations in the US).
The proposed merger was announced in March 1989 and would have created the largest media company in the world [Source 1]. It led to a number of lawsuits from competitors across the media value chain. The two most notable were:
Viacom (the owner of Showtime, a competitor of Time-owned HBO) sued Time and its subsidiary Manhattan Cable Inc on federal antitrust grounds in May 1989.
Viacom alleged that:
"as early as 1980 and continuing until now, Time, Home Box Office and Manhattan Cable devised a strategy and set out on a course of action to make it more difficult for Showtime to buy films and exhibit them through cable systems."
Viacom sought $2.6 billion in damages which might not seem a lot of money by modern corporate standards, but was c 1/4 of Time's entire value at the time. In short, it was a big deal. [Source 2]
I haven't actually been able to find the judgement on this, but Kramer was right: it was in court for years. They were still litigating this case in 1992. [Source 3]
The Time/Warner merger got even more complicated in June 1989 when Paramount crashed the bid by making a competing hostile all-cash offer for Time. [Source 4]
Paramount was not Time's preferred takeover partner, and as such Time deployed a series of M&A tactics to "poison" the deal. Paramount alleged these tactics were illegal and sued. This ended up in the Delaware Supreme Court and became an important test case to determine the extent to which companies could use such tactics to ward off a hostile takeover. It's so famous in M&A circles, in fact, that it has its own wikipedia page. [Source 5]
This wasn't the only lawsuit related to the Paramount bid. In late June 1989, Time countersued Paramount on the grounds that its bid would invalidate its franchise arrangements. [Source 6]
In short, cable TV in 1989-1990 was a bitterly contested market with multiple overlapping takeover bids and lawsuits. In this respect, Kramer is absolutely right: it would be a long time before they would resolve their problems.
However there are two important issues on which I think Kramer is giving Jerry poor advice.
Sources: