CFFI Ventures enters CCAA after creditors challenge Companies Act restructuring

CFFI Ventures Inc., the Halifax-based investment holding company associated with Nova Scotia entrepreneur John Risley, has obtained initial protection under the Companies’ Creditors Arrangement Act after its attempt to pursue a restructuring under Nova Scotia’s Companies Act drew opposition from key creditors who argued that the restructuring should proceed under the CCAA.

Justice John Keith of the Supreme Court of Nova Scotia granted an initial order on March 13, 2026 placing CFFI under CCAA protection, with a comeback hearing scheduled for March 23. The filing represents the latest development in a restructuring effort previously launched under Nova Scotia’s Companies Act, which the company sought to use to implement a plan transferring substantially all of its assets to a lender-controlled entity. As previously reported, that process faced resistance from Canada Revenue Agency and unsecured creditor Brendan Paddick, both of whom argued that the restructuring should proceed under the CCAA rather than provincial legislation.

CFFI is a private investment holding company incorporated in Nova Scotia that manages equity interests in a diversified portfolio of businesses across sectors including renewable energy, marine services, biotechnology, and venture capital investments. The company has a small workforce of approximately 9 employees and does not generate operational income, relying instead on dividends, asset sales, and investment monetizations to meet its obligations.

As of September 30, 2025 the company reported approximately $1.18 billion in total assets and approximately $2 billion in total liabilities, leaving the company with negative equity of approximately $861 million. The balance sheet deterioration stems largely from a substantial secured credit facility provided by private credit lender HPS Investment Partners LLC and affiliated funds.

Under a note purchase and guarantee agreement originally executed in 2017 and later amended in 2019, HPS and related lenders advanced approximately $250 million USD to finance acquisitions and working capital. Beginning in 2019 the company elected to capitalize interest into the principal balance through payment-in-kind interest as part of a liquidity management strategy while it attempted to monetize major investments.

The strategy failed to generate sufficient proceeds to reduce the debt. The loan matured on October 23, 2022 and interest continued to accrue, including default interest. As at February 10, 2026 approximately $776.8 million USD remained outstanding under the facility excluding certain accrued interest.

CFFI’s capital structure also includes additional secured and unsecured obligations. A secured guarantee provided by the company supports borrowings of approximately $30.6 million under a credit agreement between Cormorant Utility Services Limited and SFPC Quantum LP, which matures January 4, 2027. The company also owes approximately $2.1 million USD to FPR Financial Corporation under a secured promissory note dated October 6, 2023.

Unsecured claims total approximately $371 million and include a $23.35 million promissory note owed to Brendan Paddick as well as disputed reassessments by Canada Revenue Agency totaling approximately $331.5 million. The CRA assessments remain under appeal.

Management states that the company attempted to reduce its debt burden through asset sales but was unable to complete transactions quickly enough to address the escalating HPS obligations. Interest capitalization and covenant defaults significantly increased the balance over time, leaving refinancing or repayment impracticable.

The restructuring plan developed by CFFI contemplates transferring substantially all assets to a newly created entity referred to as AcquireCo, which would ultimately be owned by HPS and affiliated funds. Under the proposed structure, AcquireCo would assume certain senior obligations and a portion of the HPS debt equal to the fair market value of the acquired assets, estimated at approximately $367 million.

Other secured and unsecured creditors would receive contingent value rights tied to potential future recoveries from the portfolio assets. Unsecured creditors with claims of $15,000 or less would be paid in full in cash as a convenience class.

The plan has drawn criticism from certain creditors, including Brendan Paddick who challenged the fairness opinion supporting the proposed transaction and raising concerns about the valuation methodology and the absence of a formal sale and investment solicitation process.

FTI is the monitor. Counsel includes McInnes Cooper for CFFI, Osler and Cox & Palmer for HPS, and Davies for Brendan Paddick.