Judge approves $1-billion deal in John Risley restructuring case, but dispute over artwork remains

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 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 This advertisement has not loaded yet, but your article continues below.HomeNewsEconomyJudge approves $1-billion deal in John Risley restructuring case, but dispute over artwork remainsThe artwork ownership dispute stems in part from the way CFFI historically recorded spendingThe artworks claimed by John Risley include pieces by Group of Seven artists A.Y. Jackson, J.E.H. MacDonald and Arthur Lismer, as well as over 90 works by Nova Scotia folk artist Maud Lewis. Photo by Aaron McKenzie Fraser/PRNewsFoto/Cunard LineRoughly US$1 billion in debt owed by businessman John Risley‘s CFFI Ventures Inc. will be exchanged for virtually all of the Halifax company’s investment portfolio, bringing its six-month restructuring close to an end, after a Nova Scotia Supreme Court judge approved the deal on Friday.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe 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 TO UNLOCK MORE ARTICLESSubscribe 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.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate 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.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.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 AccountBut Justice John Keith imposed an additional condition requiring greater transparency over an unresolved dispute involving hundreds of artworks claimed personally by Risley.Under the approved transaction, which is expected to close later this month, most of CFFI’s investments and other assets will pass to New Tide Capital LP, an affiliate of HPS Investment Partners LLC, CFFI’s largest lender.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.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 FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThe company’s overall debt was approximately US$1.2 billion when CFFI entered creditor protection in March.The judge said the transaction was the best available outcome after a court-supervised sale process failed to produce a competing offer capable of matching it.FTI Consulting Inc., CFFI’s court-appointed monitor, contacted 159 buyers during the process, but none of the seven preliminary bids submitted developed into a qualifying offer.Keith said the HPS/New Tide transaction represented the best available offer and was preferable to bankruptcy. He said the sale process was fair and reasonable and no creditor opposed the transaction.But the judge also focused on CFFI’s extensive art collection and Risley’s claim that hundreds of works listed in the company’s records belong to him personally.CFFI lists 1,281 pieces of art as company assets, but a monitor’s report in June said 539 of them were earmarked for Risley. By August, that number had increased to 669.Keith said he had no evidence that explained how or why the number had increased.The works claimed by Risley include pieces by Group of Seven artists A.Y. Jackson, J.E.H. MacDonald and Arthur Lismer, as well as more than 90 works by Nova Scotia folk artist Maud Lewis.The ownership dispute stems in part from the way CFFI historically recorded spending. The monitor previously said the distinction between CFFI’s corporate expenses and Risley’s personal expenses was at times “not strictly maintained.”Negotiations over the artwork led to a “general agreement” that artwork purchased before July 1, 2004, along with certain works gifted to Risley, would belong to him, while works purchased after that date would go to CFFI. But the arrangement was never formally documented and remained under negotiation.Keith said the court had little information about how Risley’s claims arose, who was involved in the discussions or what approvals might be required to finalize the agreement.He also said that even the lowest value for the collection before the court — an $8.1-million book value recorded at the end of 2025 — was significant.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.“Many persons come before this court to me debating much smaller amounts,” Keith said.The judge said his greater concern was maintaining the integrity of the court-supervised restructuring process.“The court cannot stand simply as a rubber stamp or an instrument through which controversial issues might be privately resolved or receive the court’s preemptive blessing without being subjected to any meaningful judicial scrutiny,” he said.Keith allowed Risley and HPS/New Tide to continue negotiating ownership of the disputed works, but now requires HPS/New Tide to provide a full account of any private settlement involving the disputed artwork.Risley is one of Atlantic Canada’s best-known business figures. He co-founded Clearwater Seafoods, which was sold for $1 billion in 2021, and was also behind Ocean Nutrition Canada and Columbus International, which were sold for $540 million and US$1.85 billion, respectively.One major CFFI investment, Cormorant Utility Services Ltd., will not initially transfer to New Tide because another lender has a prior claim on its shares. The shares could transfer later on if Cormorant’s debt is refinanced or repaid, the lender consents or the court approves the transfer.CFFI’s creditor protection stay has been extended until Dec. 18.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.