Telesat’s headquarters in downtown Ottawa, Ontario, Canada. Photo: Telesat

Telesat confirmed reports that certain creditors have filed lawsuits against the company, calling the lawsuits “without merit” in a statement on Jan. 21. 

The Canadian operator confirmed that creditors holding portions of the company’s Geostationary Orbit (GEO) debut filed lawsuits in New York and Ontario about an equity distribution that took place in September 2025. 

According to The Globe and Mail, the lawsuit was filed by creditors holding 90% of $1.7 billion (U.S. dollars) of debt and alleges that Telesat moved its Low-Earth Orbit (LEO) assets to shield the assets from creditors. 

In September 2025, Telesat distributed 62% of the equity of its Telesat Lightspeed Low-Earth Orbit (LEO) business to an indirect subsidiary of Telesat Corporation, which the company disclosed at the time. 

“The lawsuits, filed at the direction of a group of distressed debt hedge funds, are without merit. The equity distribution at issue followed a robust governance process and was accomplished in strict accordance with relevant debt agreements and applicable law. Telesat intends to defend itself vigorously,” Telesat said in a statement.