More court oversight for troubled investment firm of seafood tycoon John Risley

John Risley, second from left, shares a laugh with Brendan Paddick at Clearwater Seafoods' annual meeting in Halifax on Tuesday, May 15, 2007. (CP PHOTO/ANDREW VAUGHAN) CANADA

HALIFAX — Some creditors of the debt-laden holding company belonging to Nova Scotia seafood magnate John Risley are getting their way, with the firm’s restructuring process now set for more court supervision.

Risley’s CFFI Ventures submitted a plan to the Nova Scotia Supreme Court last month that would see its assets transferred to its largest debt holder -- a group of firms affiliated with New York’s HPS Investment Partners -- in order to get out from under a crushing debt load, pegged at $1.4 billion in its September 2025 financial statements.

The process was set to proceed under the Nova Scotia Companies Act and would have seen relatively limited court supervision. CFFI said in a statement Thursday that it still planned to move ahead with the HPS takeover, but instead under the federal Companies’ Creditors Arrangement Act “to address concerns raised by several parties.”

Those parties include the Canada Revenue Agency, which claims it’s owed $331 million, a figure the investment company disputes.

Designed to allow large insolvent companies to keep operating and restructure under protection from their creditors, the CCAA usually sees an independent court-appointed monitor navigate the entire process in order to get the highest return for creditors. It also gives debt holders more voting rights than does the provincial law. Restructuring debt under the federal law is usually more expensive because of the increased legal and financial services fees.

“This approach is intended to provide a more efficient path to address the matters raised,” CFFI said in a statement. “The substance and intended outcome of the recapitalization remain unchanged.”

Risley said in a text message to The Canadian Press that he did not think the new process would change anything.

Known for his yacht and mansion, Risley is one of the most-high profile businessmen in Atlantic Canada, having co-founded Clearwater Seafoods, which was sold in 2021 for $1 billion. He was behind Nova Scotia-based fish oil supplement company Ocean Nutrition, which sold for $540 million in 2012, and co-founded the Caribbean communications company Columbus International, which sold for US$1.85 billion in 2014.

More recently, he’s pursued power and hydrogen projects in Newfoundland and formed a new venture with the aim of economic development in the Arctic.

Last month CFFI filed court documents that detailed a series of high-stakes loans and big investments as Risley’s company tried to contain spiralling debt while juggling a portfolio of companies in industries including skin care, biofuels and marine services.

Court documents show the HPS debt started out as a US$250-million loan in 2017, but ballooned to nearly US$1 billion after interest rates jumped when the company stopped making payments. CFFI has been selling millions of dollars worth of art, private planes and other assets in an effort to pay down its debt.

No cash would change hands under the proposed HPS takeover, as CFFI still owes the company more than US$776 million. HPS would take on all of CFFI’s liabilities as part of the deal. HPS is also owed additional default interest on the loan, which has yet to be calculated, but the amount stood at US$220 million as of September 2025.

The federal revenue agency said in court documents the proposal original proposal involving the provincial law was being conducted under the control of a single creditor that “served to benefit significantly.” It said an independent sales process was not taking place; “therefore, the creditors are unable to ascertain whether the maximum return is being achieved from the sale of these assets.”

Newfoundland businessman Brendan Paddick, a longtime business associate of Risley who has filed suit against CFFI claiming he’s owed $23 million, also opposed the original plan. His court submissions said the process under provincial law allowed HPS to determine the value of its own claims against CFFI without any independent valuation.

Paddick argued any asset sale should move ahead under CCAA, saying it would maximize value for all stakeholders. He did not respond to a request for comment Thursday.

Accounting firm EY had conducted a fairness evaluation of the HPS transaction for CFFI’s board of directors. It said the investment firm would assume a debt amount about equal to the $367 million in CFFI assets it would be acquiring.

If CFFI’s assets are sold off individually potential buyers would know there was a deadline under the creditor protection proceedings, which could drive down prices, the accounting firm said, adding that the process would also increase legal and financial advisory costs.

EY concluded that secured and unsecured creditors would be in a better financial position if HPS was granted all of CFFI’s assets and assumed all of the investment firm’s liabilities.

By Devins Stevens

This report by The Canadian Press was first published March, 12, 2026.