CFFI Ventures obtains preliminary stay as part of arrangement process

The Supreme Court of Nova Scotia has granted a preliminary interim order staying proceedings against CFFI Ventures Inc., the investment holding company associated with Nova Scotia entrepreneur and seafood magnate John Risley, while the Court considers a proposed plan of arrangement intended to restructure billions in secured and unsecured debt and transfer substantially all company assets to a lender-controlled entity.

Justice Keith issued the limited stay on February 17, 2026 after CFFI brought an ex parte application under section 130 of Nova Scotia’s Companies Act. The company sought broader interim relief including authorization to convene creditor meetings and advance a comprehensive restructuring plan, but the Court declined to grant the full order at this stage and instead imposed a temporary stay pending further hearings.

CFFI is a Halifax-based holding company which operates primarily as an investment vehicle managing equity stakes across multiple industries. Its portfolio includes interests in energy, marine services, fintech, life sciences, and private equity ventures. Its principal investments include:

• a 30% interest in the World Energy GH2 renewable energy development group in Newfoundland and Labrador which recently obtained protection under the Companies’ Creditors Arrangement Act;

• stakes in World Energy LLC and related biofuels entities;

• a 47.19% interest in MARA Renewables Corporation, which produces algae-derived Omega-3 products;

• ownership interests in Horizon Maritime Services and related offshore vessel companies; and

• various holdings through Northern Private Capital and other venture investments.

The company also holds minority positions in several technology and industrial ventures and maintains a collection of artwork and collectibles among its tangible assets. As of September 30, 2025, CFFI reported total assets of approximately $320.3 million, including investments valued at $171.6 million and collectibles valued at $14 million.

The company’s restructuring efforts are driven primarily by a large 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 October 2017, HPS and related lenders advanced approximately US$250 million to CFFI for working capital and acquisitions.

Beginning in 2019, CFFI elected to capitalize interest into the principal balance as part of a strategy to preserve liquidity while pursuing asset sales. As of September 30, 2025 the effective interest rate had increased to 28% annually, and the outstanding principal balance had grown significantly. By February 10, 2026, approximately $776.8 million remained outstanding under the HPS facility excluding certain accrued interest.

The company’s balance sheet also reflects additional obligations including a loan from FPR Financial Corporation and borrowings linked to Cormorant Utility Services Limited. Unsecured debt totals approximately $372.1 million, including a disputed Canada Revenue Agency claim exceeding $331 million related to tax reassessments that remain under appeal, as well as $23.4 million in principal owed to Brendan Paddick pursuant to a promissory note due on demand or December 31, 2024.

CFFI attempted to reduce its debt burden by selling investment holdings but was unable to complete sufficient transactions to repay the HPS facility in the available time frame. Management concluded that the value of its portfolio was unlikely to be realized quickly enough to satisfy the debt obligations as interest continued to accrue, making refinancing or repayment impracticable.

The proposed plan of arrangement contemplates a broad restructuring of CFFI’s capital structure through a transfer of substantially all assets to AcquireCo, a newly-formed entity that would ultimately be owned by HPS and its affiliated funds through a holding structure. Under the proposal:

• AcquireCo would assume certain priority secured debt, including portions of the HPS obligations and senior claims ranking ahead of or pari passu with those lenders;

• other secured claims would be extinguished in exchange for contingent value rights tied to future asset value milestones; and

• unsecured creditors would receive a separate class of contingent value rights, with a “convenience class” for claims of $15,000 or less.

The restructuring framework is supported by a support agreement dated February 13, 2026 among certain key creditors including the HPS lenders and FPR Financial.

Justice Keith declined to grant the full interim order requested by CFFI, concluding that a limited stay of proceedings was sufficient to preserve stability while stakeholders reviewed the proposal. A subsequent hearing to address the broader interim relief sought is scheduled for March 13, 2026.

CRA and unsecured creditor Brendan Paddick are opposing the interim relief sought by CFFI, arguing that the CCAA is the appropriate statute for the transaction. Ernst & Young Inc. has delivered a fairness opinion regarding the proposed arrangement as part of the disclosure materials to creditors.

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