An Atlantic Canadian investment firm run by seafood magnate John Risley is facing a multimillion-dollar lawsuit and a change in ownership as the business owes more than US$776 million, court documents show.
A news release Tuesday said CFFI Ventures Inc. had submitted a plan in Nova Scotia Supreme Court to transfer its assets to a new owner, in an effort to arrange its debt and become financially sustainable. A judge is expected to rule in April on whether to accept the plan.
“Change is inevitable and I believe this is the right path for the future,” Risley, CFFI’s chairman and chief executive officer, said in the release. “I have a higher tolerance for risk than most, which has driven the success and some setbacks experienced since founding Clearwater Fine Foods Inc. (CFFI’s predecessor) in 2003.”
Also Tuesday, Risley’s longtime business associate, Brendan Paddick, filed an application in Nova Scotia Supreme Court claiming CFFI owed him more than $22 million.
Risley, whose holding company is based in Nova Scotia, is best known for co-founding Clearwater Seafoods, which he sold in January 2021 for $1 billion. Paddick is a businessman from Newfoundland and Labrador, and he was once board chair for the province’s now-defunct Crown energy corporation, Nalcor.
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The claims in Paddick’s lawsuit have not been tested in court.
When reached by phone on Wednesday, Risley said he had not seen Paddick’s suit. He also said he had been advised not to comment further on CFFI’s restructuring.
CFFI Ventures is a partner in a proposed wind-powered hydrogen operation in western Newfoundland, and a part owner of Newfoundland-based marine service company Horizon Maritime. It is also a part owner of several other ventures, including the skin care company SkinFix, according to court documents released Wednesday.
The company also owns “an extensive collection of artwork and other collectible items” valued at $14 million, the documents said.
“CFFI does not believe that its assets can be monetized in the near term,” said an affidavit from CFFI’s vice-president and chief financial officer, Brittany Bartlett. As well, the company doesn’t think the value of its assets is enough to cover its debts, she said.
The company is proposing that some of its creditors — led by New York-based investment firm HPS Investment Partners — form a new company, AcquireCo., to take on much of CFFI’s debt and assets, according to an interim ruling from Justice John Keith dated Wednesday.
Meanwhile, Paddick’s lawsuit claims he provided CFFI with a “substantial loan” in 2018. Paddick alleges the company said in a promissory note in January 2024 that it owed him $15.8 million plus 14 per cent interest. The company said it would add three per cent to the interest rate each year if it failed to make interest payments, the lawsuit claims.
Paddick alleges CFFI defaulted on the note and now owes him $22.8 million, plus 20 per cent interest.
Risley recently announced he is pursuing several projects outside CFFI, including a network of subsea cables to form an energy grid connecting Atlantic Canada. He said Wednesday he intends to continue those ventures.
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