Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomyJohn Risley's CFFI faces fight over key asset in $1.4-billion restructuring battleCreditors clash over whether company's Cormorant shares should be marketed through court-supervised sales process You can save this article by registering for free here. Or sign-in if you have an account.John Risley is one of Atlantic Canada’s most prominent business figures, known for building companies across seafood, energy and telecommunications sectors. Photo by Keith Gosse/PostmediaA decision will likely be made on Friday to determine whether John Risley‘s CFFI Ventures Inc.‘s significant stake in Cormorant Utility Services Ltd. should be marketed as part of a proposed court-supervised process aimed at addressing roughly $1.4 billion in debt or carved out for a separate sale.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorCFFI, which owes about $1 billion to senior lender New York-based HPS Investment Partners LLC, is seeking approval from the Nova Scotia Supreme Court in Halifax for a court-supervised sale and investment solicitation process (SISP) that would test market interest in its assets as part of its ongoing restructuring proceedings under the Companies’ Creditors Arrangement Act (CCAA).The main dispute centres on CFFI’s shares in Cormorant, which CFFI said should be included in the SISP to maximize value for creditors through a broad market test.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againBut SFPC Quantum LP, a secured lender with rights connected to CFFI’s Cormorant shares, said the shares should instead be excluded and handled through a separate sale effort led by Cormorant, which it said would allow the utility to explore refinancing and other alternatives.Throughout a hearing on Tuesday, Justice John Keith repeatedly questioned whether a workable alternative process had been put before the court.“We’re comparing an existing process that’s being proposed to something that’s very hypothetical, something that nobody on this call can represent Cormorant will actually do, wants to do or is prepared to do,” he said.Risley is one of Atlantic Canada’s most prominent business figures, known for building companies across seafood, energy and telecommunications sectors. He co-founded Clearwater Seafoods Inc., which was sold in a deal valued at about $1 billion, and Columbus Communications, which sold for US$1.85 billion in 2014.But in March, CFFI entered CCAA. His long-time business partner Brendan Paddick, a major Cormorant shareholder, supported efforts to exclude CFFI’s stake in Cormorant from a broader court-supervised sales process.He is suing CFFI over an alleged unpaid $23-million loan, while the Canada Revenue Agency said the company owes roughly $333 million in taxes. The court on Tuesday heard that a reassessment could reduce the tax claim.A prior fairness opinion prepared by Ernst & Young Global Ltd. estimated CFFI’s assets would realize about $367 million in a liquidation scenario, far below the company’s debt load. The court-appointed monitor, FTI Consulting Canada Inc., later said it agreed with the E&Y report’s overall conclusion.CFFI said its proposed SISP would allow prospective purchasers to pursue a variety of transaction structures involving the company’s equity interests and artwork holdings.CFFI’s proposed process calls for notices of intent to bid by July 21 and binding offers by Aug. 11, with a potential auction the following week. But SFPC Quantum said bidders should be given additional time and proposed deadlines extending into late September.The lender also raised concerns about confidentiality, shareholder rights and contractual provisions it said could complicate a future transaction involving Cormorant.The monitor largely supported CFFI’s proposal, describing it as a reasonable mechanism for marketing the company’s assets. It opposed the longer timetable sought by SFPC Quantum, saying CFFI’s proposed six-week first phase and three-week second phase struck an appropriate balance between maximizing value and avoiding unnecessary delays and costs.Counsel for the monitor told the court on Tuesday that preparations had already been underway for several weeks and that the process could be launched within about 24 hours if approved.Court filings indicate the company holds hundreds of pieces of artwork valued at approximately $8.1 million on its financial statements, although questions remain regarding ownership of some works that may overlap with assets claimed by Risley.The monitor told the court any unresolved ownership disputes could be dealt with separately and would not prevent the sales process from moving forward.Keith approved an extension of creditor protection for CFFI until Sept. 18, but is scheduled to make his decision on the proposed SISP on Friday. 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