A US$1.12-billion insolvency, and a surprising fight over whose art it really is.
A Nova Scotia court just approved a US$1.12-billion sale of CFFI Ventures' assets - but it wants eyes kept on the art.
Justice John Keith signed off on the deal at a September 17, 2026 hearing, with his written reasons following on September 21. CFFI had been under creditor protection since March 13, 2026. A court-supervised sale process canvassed 159 potential buyers, but nobody made a bid good enough to beat the one on the table: CFFI's own secured lender, HPS Investment Partners, stepping in through its affiliate New Tide Capital LP to take over the assets.
Here's the twist: HPS isn't paying cash. It's doing what's called a credit bid, essentially using the debt CFFI already owes it as currency for the deal. The court agreed this beats a straight bankruptcy sale, since the debt owed to HPS is worth so much more than the assets themselves that unsecured creditors wouldn't see a cent either way.
One chunk of the business stays off the table for now: CFFI's stake in Cormorant Utility Services Limited. Those shares are pledged to a different lender, SFPC Quantum LP, whose claim beats HPS's. They'll only change hands once Quantum gets repaid, agrees to the transfer, or a judge says otherwise.
Here's where it gets interesting for advisors. John Risley, the entrepreneur who built CFFI, says a chunk of the company's art collection is actually his - pieces he bought before July 1, 2004, or received as gifts. CFFI's books, on the other hand, list the same works as company property. The monitor, FTI Consulting, told the court that over the years the line between Risley's personal spending and CFFI's corporate spending "was not strictly maintained." Sorting out who owns what has been underway since 2024, and still isn't settled.
And the numbers keep shifting: Risley's slice of the 1,281-piece collection grew from about 42 percent in June 2026 to about 52 percent by August - a haul that now includes Group of Seven paintings and more than 90 works by Nova Scotia folk artist Maud Lewis.
Justice Keith approved the sale, but wouldn't let the art question quietly sort itself out in private. The original plan let HPS and New Tide negotiate with Risley and only loop in the court if talks fell apart. The judge changed that: any deal they strike on the art now has to be fully disclosed to the monitor - valuations, reasoning, the works - before it goes anywhere near final. He pointed out the collection's book value, about $8.1 million as of late 2025, is nothing to sneeze at, even next to a billion-dollar debt pile.
The judge also stretched CFFI's creditor protection to December 18, 2026, signed off on a $28,808.49 payment to the Canada Revenue Agency for pre-filing HST, and gave the monitor more power to wind down what's left of CFFI once the deal closes - though FTI won't be treated as a director or officer of the company.
The lesson for advisors: when personal and corporate assets blur together for years, insolvency court is where that gets sorted out - and judges keep a close eye on it, even after the headline sale is approved.
