An Atlantic Canadian investment firm led by seafood industry entrepreneur John Risley is in the midst of a substantial legal and financial crisis. CFFI Ventures Inc. is facing a lawsuit from Risley’s longtime associate, Brendan Paddick, alleging that the firm owes him over $22 million.
Financial Troubles for CFFI Ventures Inc.
Court filings reveal that CFFI Ventures has accumulated debts exceeding $776 million. In an attempt to address its financial situation, the company has submitted a restructuring plan to the Nova Scotia Supreme Court. A ruling on this plan is anticipated in April.
Risley, who serves as the chairman and CEO of CFFI, recognized the necessity for change in his statement. He expressed that his willingness to take risks has contributed to both the successes and challenges faced since the inception of Clearwater Fine Foods Inc. in 2003.
Allegations of a $22 Million Debt
Paddick, a businessman from Newfoundland and Labrador, has put forth claims in court stating that CFFI owes him $22.8 million. This amount includes $15.8 million advanced as a loan in 2018, plus interest. According to Paddick, a promissory note issued by CFFI indicated a 14% interest rate, increasing by 3% for any overdue payments. These claims remain untested in court.
Restructuring CFFI Ventures
- CFFI Ventures plans to transfer its assets to a new entity, AcquireCo., to alleviate debt.
- HPS Investment Partners, a New York-based investment firm, is leading the creditor group in this effort.
- Current assets include a proposed wind-powered hydrogen project and a partial ownership in Horizon Maritime.
- Additionally, CFFI has a diverse collection of art and collectibles valued at $14 million.
According to Brittany Bartlett, CFFI’s vice-president and chief financial officer, the firm does not believe its assets can be quickly monetized. She noted that the total value is insufficient to cover outstanding debts.
Risley’s Future Projects
In light of CFFI’s difficulties, Risley is exploring various ventures outside the firm. One significant project includes establishing a network of subsea cables aimed at creating an energy grid across Atlantic Canada. He remains committed to these initiatives despite the ongoing challenges with CFFI.
The developments surrounding John Risley’s firm and the legal proceedings initiated by Brendan Paddick highlight the growing concerns over CFFI’s financial stability and the broader implications for its stakeholders.
