Creditors Sue Telesat Alleging ‘Fraudulent’ Asset Transfer (1)

Creditors to struggling Telesat Canada sued the satellite operator, demanding the company unwind transfers they said placed the most valuable assets out of their reach and breached lending terms.

The lenders cited the company’s move to shuffle its Lightspeed unit, a network of low-earth orbit satellites, to an indirect subsidiary and out of a collateral package backing its bonds and loans, according to a court filing dated Wednesday.

The lawsuit also alleged Telesat has taken “no action” to address billions of dollars of maturing loans, though the creditors have attempted to engage in discussions.

With the transaction, “the conflicted directors ...