WORKAROUND 1:
Go to Tools | Options | Database | General | uncheck - 'Poll Service Status in connection list', click on Apply and OK. Restart Toad to see if issue is fix.
WORKAROUND 2:
If error still occur, please follow the steps below to reset the Toad setting:
1. Launch Toad and go to the Help | About windows.
2. Click on the Application Data Directory. This will open up the Toad directory.
3. Exit Toad, then rename the directory Toad for SQL Server 5.8 to Toad for SQL Server 5.8_OLD.
4. Launch Toad again and DO NOT migrate any setting over at this time.
5. Make your connection and determine if the error can be reproduced.
6. If no errors are generated, exit Toad so the settings may be saved.
