John Risley’s CFFI Ventures Faces Multimillion-Dollar Challenges
An Atlantic Canadian investment firm spearheaded by seafood industry titan John Risley is currently embroiled in a complex financial situation, facing a substantial multimillion-dollar lawsuit and a significant ownership transition. Court documents reveal that CFFI Ventures Inc. owes over US$776 million, prompting a restructuring plan submitted to the Nova Scotia Supreme Court.
Restructuring Plan and Debt Management
On Tuesday, CFFI Ventures announced its proposal to transfer assets to a new owner, aiming to address its considerable debt and achieve long-term financial stability. A judicial ruling on the plan’s acceptance is anticipated in April. John Risley, Chairman and CEO of CFFI, expressed his belief that this is the necessary course of action, acknowledging his historically higher risk tolerance which has contributed to both successes and setbacks since the founding of Clearwater Fine Foods Inc. (CFFI’s predecessor) in 2003.
$22 Million Lawsuit Filed by Brendan Paddick
Adding to the complexity, Brendan Paddick, a longtime business associate of Risley, filed a lawsuit in the Nova Scotia Supreme Court on Tuesday, alleging that CFFI owes him more than $22 million. Paddick, a businessman from Newfoundland and Labrador and former board chair of Nalcor, claims a substantial loan provided to CFFI remains unpaid.
Risley’s Legacy and Recent Ventures
John Risley is widely recognized as the co-founder of Clearwater Seafoods, a company he successfully sold in January 2021 for a remarkable $1 billion. Despite the current challenges with CFFI Ventures, Risley remains focused on future projects. He is actively pursuing initiatives outside of CFFI, including a groundbreaking network of subsea cables designed to establish an energy grid connecting Atlantic Canada. This ambitious project aims to enhance energy infrastructure and connectivity within the region.
CFFI Ventures’ Diverse Portfolio
CFFI Ventures holds investments in a diverse range of ventures, including a partnership in a proposed wind-powered hydrogen operation in western Newfoundland, a stake in Newfoundland-based marine service company Horizon Maritime, and a portion of the skincare company SkinFix. Furthermore, the company possesses an “extensive collection of artwork and other collectible items” estimated to be worth $14 million.
Asset Monetization and Creditor Agreement
However, CFFI believes that immediate monetization of its assets is unlikely, and their current value is insufficient to cover outstanding debts. The proposed restructuring involves key creditors, led by New York-based investment firm HPS Investment Partners, forming a new entity, AcquireCo., to assume a significant portion of CFFI’s debt and assets, as outlined in an interim ruling by Justice John Keith.
Details of Paddick’s Lawsuit
Paddick’s lawsuit details a “substantial loan” provided to CFFI in 2018, with a promissory note issued in January 2024 acknowledging a debt of $15.8 million plus 14% interest. The note also stipulated escalating interest rates for missed payments. Paddick alleges that CFFI defaulted on the note, resulting in a current debt of $22.8 million, plus 20% interest.
Looking Ahead
Despite the ongoing legal and financial hurdles, John Risley remains committed to his entrepreneurial pursuits and the development of innovative projects in Atlantic Canada. He intends to continue pursuing these ventures, demonstrating his continued dedication to the region’s economic growth and development. For more information on Canadian business news, visit The Globe and Mail.
