Telesat (TSAT) has lost nearly 20% since a group of lenders filed a lawsuit claiming the company improperly transferred 62% of the equity in its LEO business into an entity outside of their reach…

… ahead of a ~$2B wall of debt maturities the company appears unable to pay. With ~$500M in cash and negative FCF, a debt restructuring seems inevitable…

… so the lawsuit is less about damages and more about negotiating leverage. If Telesat is onside legally, creditors would be stuck with a legacy GEO business in structural decline as collateral…

… limiting their ability to dictate terms. If the creditors gain the upper hand, equity value could change hands quickly. Reality is likely to fall somewhere in the middle, but expect volatility until a settlement is reached.