The debt-ridden investment firm of Nova Scotia businessman John Risley will now be restructured under the provisions of federal legislation after a judge on Friday gave the green light to a process that will involve greater court oversight.

Nova Scotia Supreme Court Justice John Keith agreed the case should proceed under the Companies’ Creditors Arrangement Act, rather than Nova Scotia legislation, following concerns from some unsecured creditors, including a Risley business associate who says he is owed $23 million.

In remarks to the court, Keith noted the case involving Risley’s firm, CFFI Ventures Inc., is a “little bit of a different beast,” given the company doesn’t manufacture or sell a product but instead owns or has interests in numerous enterprises.

All told, CFFI Ventures owes well over $1 billion, the bulk of it to New York-headquartered HPS Investment Partners LLC. The restructuring plan proposed last month would see ownership of Risley’s firm transferred to HPS.

Risley gained prominence for co-founding Clearwater Seafoods, which was sold in 2021 for $1 billion, but he was also behind successful fish oil supplement company Ocean Nutrition and Caribbean communications company Columbus International.

CFFI Ventures has invested in numerous businesses, ranging from skin care to marine services. Among those, according to court records, is a 30 per cent stake in World Energy GH2, a proposed hydrogen operation in Newfoundland that sought creditor protection earlier this month.

CFFI Ventures had attempted to put a dent in its debt, including by selling artwork and aircraft it owned. However, the firm’s CFO has acknowledged it is unable to meet its obligations.

In court on Friday, Keith agreed to appoint FTI Consulting as monitor as part of the restructuring process under the Companies’ Creditors Arrangement Act (CCAA).

Monitors are independent third parties that monitor a company’s business and financial affairs for the court and help prepare a plan, and Keith said he will rely on FTI Consulting as “my eyes and ears on the ground.”

According to recent court filings, Risley is no longer a director of CFFI Ventures. He has declined to comment on details surrounding his firm’s restructuring, but has said he has “no plan to slow down” and has his eye on new projects unrelated to CFFI Ventures.

The largest unsecured creditor is the Canada Revenue Agency, which court documents say is claiming $331 million in taxes, interest and penalties. CFFI Ventures has said it disputes those amounts and has filed objections.

MORE TOP STORIES