Seafood tycoon John Risley's business associate opposes takeover of his troubled firm

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

HALIFAX — A longtime business associate of seafood magnate John Risley is mounting a legal challenge to a proposal potentially worth more than $1.7 billion that would see a New York investment company take over all the assets — and debt — of the Nova Scotia businessman’s troubled investment company.

Newfoundland businessman Brendan Paddick, who claims in a separate lawsuit that he is owed about $23 million from Risley’s CFFI Ventures, says in court documents that the proposed takeover by the investment company’s largest debt holder, New York’s HPS Investment Partners, creates conflicts of interest and would be “prejudicial to the other creditors.”

“The price will be determined by HPS itself, without arm’s-length negotiation or any evidence as to the value of the assets being acquired,” says Paddick’s submission to the court.

Risley has made hundreds of millions in business ventures but is best known as the co-founder of Clearwater Seafoods, which sold in January 2021 for $1 billion. Known for his yacht and mansion, 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 while Paddick was CEO.

Risley and Paddick have continued to be business associates, including serving together as directors of MDA Space, builder of Canada’s robotic space arm, the Canadarm.

Last month CFFI filed documents in the Supreme Court of Nova Scotia 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.

The firm submitted a plan to transfer its assets to a group of firms affiliated with HPS in order to get out from under its crushing debt load, pegged at $1.4 billion in its September 2025 financial statements. No cash would change hands under the proposal, as CFFI owes the company more than US$776 million. HPS would take on all of CFFI’s liabilities as part of the deal.

Court documents show the HPS debt started out as a US$250-million loan in 2017, but ballooned to nearly US$1 billion due to a lack of principal payments and punishing interest rates. CFFI has been selling millions of dollars worth of art, private planes and other assets in an effort to pay down what it owes.

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 CFFI’s September 2025 financial statements.

The Canada Revenue Agency is also seeking payment of more than $331 million, as of February 2025, an amount CFFI says it is disputing. Various other creditors are owed lesser amounts ranging from less than $15,000 to tens of millions of dollars.

Paddick, who was once the board chair for Newfoundland and Labrador’s now-defunct Crown energy corporation, Nalcor, says HPS has a contractual right to appoint CFFI board members, giving it influence over the company’s decision-making. He claims the proposal allows HPS to determine the value of its own claims against CFFI without any independent valuation.

The proposed plan would also release CFFI directors and officers from any liability connected with CFFI, which Paddick is opposing.

“Given this prolonged period of financial distress, there may be legitimate claims against directors and officers relating to their conduct in the period leading up to and during its insolvency, including claims for breach of fiduciary duty, negligence, or the receipt of improper personal benefits. These potential claims warrant proper investigation before any release is granted,” says Paddick’s court submission.

Instead of the HPS deal, Paddick argues any asset sale should move ahead under the Companies’ Creditors Arrangement Act (CCAA), a court-supervised proceeding that could see CFFI’s assets sold through a bidding process. Paddick says that would maximize value for all stakeholders.

Paddick could not be reached for comment Tuesday. Risley declined comment in a text message.

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

EY says if CFFI’s assets are sold off individually, similar to what Paddick is seeking, potential buyers would know there was a deadline, which could drive down prices. EY says the process would also increase legal and financial advisory costs.

EY concludes that secured and unsecured creditors would be in a better financial position under the HPS deal.

A judge is being asked to approve an interim order that would allow groundwork for the HPS proposal to proceed ahead of efforts to secure final approval in April. A hearing is scheduled for later this week.

This report by The Canadian Press was first published March 11, 2026.

By Devin Stevens