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A significant legal battle is unfolding in Nova Scotia as Brendan Paddick, a long-time associate of seafood tycoon John Risley, is contesting a proposed takeover valued at over $1.7 billion. This deal, involving New York-based HPS Investment Partners, would see the firm assume control of all assets and liabilities of Risley’s struggling company, CFFI Ventures. Paddick, who claims he is owed approximately $23 million by CFFI, alleges that the proposed takeover presents serious conflicts of interest and could adversely affect other creditors.
Paddick’s Legal Opposition
In court submissions, Paddick argues that the terms of the proposed acquisition would allow HPS, the largest creditor, to set the sale price unilaterally, without independent valuation or proper negotiation. He asserts that this scenario could be damaging to the interests of other stakeholders involved. “The price will be determined by HPS itself, without arm’s-length negotiation or any evidence as to the value of the assets being acquired,” Paddick states in his legal filings.
Risley, renowned for his substantial achievements in the seafood industry, co-founded Clearwater Seafoods, which was sold for $1 billion in January 2021. He has been involved in various lucrative ventures, including a $540 million sale of his fish oil supplement company, Ocean Nutrition, in 2012, and the co-founding of Columbus International, which sold for US$1.85 billion in 2014.
CFFI’s Financial Struggles
CFFI Ventures has been grappling with severe financial challenges, with debts estimated at around $1.4 billion as of September 2025. The company has attempted to manage its financial woes through a series of high-stakes loans and substantial investments across various sectors, including skin care and biofuels.
In a bid to alleviate its financial burden, CFFI has proposed transferring its assets to a group of firms linked with HPS, which would assume all liabilities associated with the company. Notably, this deal would not involve any cash transactions, as CFFI owes HPS over US$776 million, a figure that has escalated due to high-interest rates and a lack of principal repayments.
Complications and Controversies
Paddick further contends that the structure of the proposed acquisition raises serious ethical concerns. He highlights that HPS possesses the right to appoint board members for CFFI, potentially compromising the integrity of the company’s governance. Moreover, he argues that the proposal would release CFFI’s directors and officers from any potential liabilities arising from their conduct during the company’s financial decline. Paddick believes these matters warrant thorough investigation before any legal immunity is granted.
Instead of endorsing the HPS deal, Paddick advocates for a methodical asset sale under the Companies’ Creditors Arrangement Act (CCAA). This court-supervised process could facilitate a competitive bidding environment, thereby maximising the value for all parties involved.
Evaluation by Accounting Experts
The accounting firm EY has conducted a fairness assessment of the HPS transaction, suggesting that the investment firm would inherit debts comparable to CFFI’s asset value. EY cautions that selling assets individually, as Paddick suggests, could lead to decreased prices due to the urgency of a deadline, alongside increased legal and advisory costs.
A judge is set to review the proposal, with an interim order being sought to allow preliminary steps towards the HPS acquisition ahead of a final ruling expected in April. A court hearing is scheduled for later this week, where the complexities of this case will be further examined.
Why it Matters
The outcome of this legal dispute could have far-reaching implications not only for John Risley and CFFI Ventures but also for the broader business community in Nova Scotia. With significant debts and a potential restructuring at stake, the case underscores the challenges faced by companies in financial distress and highlights the critical importance of transparent governance and fair creditor processes. As stakeholders await the court’s decision, the ramifications of this case will likely resonate throughout the region’s economy and investment landscape.
