Telesat: Initial Thoughts on TL Lender Lawsuits

Mark Lightner, Esq. - Head of Special Situations Legal Research, CreditSights
Jessica Reiss, J.D. - Head of U.S. Loans Research, Covenant Review
Jory M. Eisenberg, CFA, FRM - Senior Analyst, Special Situations, CreditSights
Davis Hebert, CFA - Co-Head HY Research, Head of Telecom/Media, CreditSights
Savannah Buzzeo - Analyst, Telecom / Media, CreditSights

22 January 2026

Download the Full Report to gain insights on:
  • How the equity transfer allegations could reshape creditor negotiations and restructuring dynamics ahead.
  • Why covenant breach claims matter for asset separation strategies and stakeholder positioning decisions.
  • What fraudulent conveyance arguments under Canadian law mean for cross-border enforcement and remedies.
  • Which legal theories lenders deployed across multiple jurisdictions to maximize negotiating leverage effectively.
  • Where board liability exposure intersects with corporate governance and fiduciary duty breach allegations.

Executive Summary

On January 21, 2026, Telesat’s term loan lenders filed two lawsuits. One in New York state court, second in Ontario Superior Court.

Telesat faces a US$1.7bn debt maturity wall in December 2026. Refinancing prospects heavily dependent on attributing significant value to LEO business.

The plaintiff argues the LEO equity transfer violates the credit agreement. Lenders left with diminished asset pool backed by declining GEO business.

The transfer allegedly amounts to fraudulent conveyance under Canadian law. Directors and officers allegedly personally liable for the LEO transfer.

We are still evaluating what these cases mean for restructuring prospects. Initial impressions suggest it seems designed to spur negotiations.

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