John Risley

’s CFFI Ventures Inc. is moving through a court-supervised restructuring that could transfer control of its assets to its largest creditor as it faces more than $1.4 billion in debt and mounting pressure to settle its financial future.

Halifax-based CFFI now has to reconstruct CFFI’s complex corporate structure after court monitor FTI Consulting Canada Inc. on Friday said in its first report that there were discrepancies in the company’s initial asset disclosures.

But monitor Jeffrey Rosenberg said the company has enough liquidity to operate through late May, even as the restructuring continues and the value of some investments — including World Energy GH2 Inc., which is in insolvency proceedings — comes under pressure.

The monitor’s report also said Risley has provided personal guarantees tied to portions of CFFI’s secured debt.

FTI Consulting said CFFI “has acted and continues to act in good faith and with due diligence to advance its restructuring process” and has sufficient liquidity to fund its obligations through late May.

CFFI, which holds investments across industries including energy, space technology and skincare, previously pursued a restructuring plan under the Nova Scotia Companies Act that would have transferred its assets to a group affiliated with HPS Investment Partners LLC, which CFFI owes roughly US$777 million in secured debt.

That plan drew opposition from creditors, including the

Canada Revenue Agency

, which said CFFI owes it $331 million, a claim the company disputes, and from long-time business associate Brendan Paddick, who is suing over an unpaid $23-million loan. He is also a guarantor on debt tied to one of CFFI’s portfolio companies, according to court filings.

CFFI abandoned its plan to restructure under a provincial court process earlier this month and shifted it into the federal

Companies’ Creditors Arrangement Act

(CCAA), which was approved by the Supreme Court of Nova Scotia.

The federal process involves greater court supervision and also gives debt holders stronger voting rights and is typically more costly due to higher legal and financial advisory fees.

CFFI is asking the court to extend a stay of proceedings until May 29, which would prevent creditors from taking enforcement action while the restructuring continues. The monitor supported the request, saying the company has acted in good faith and that creditors are unlikely to be materially prejudiced.

The monitor’s report also recommends increasing a court-ordered charge for professional fees to a maximum of $400,000, up from $250,000, citing the complexity of the case.

The monitor said the restructuring is still being tested, with the underlying structure of the deal — and the value of CFFI’s assets — under continuing scrutiny.

Risley is one of Atlantic Canada’s most high-profile business figures, known for building and investing in companies across seafood, energy and finance. He co-founded Clearwater Fine Foods Inc., which was sold for $1 billion, and Columbus International Inc., a Caribbean communications company that sold for US$1.85 billion in 2014.

Court filings said HPS’s loan started at US$250 million in 2017 and reached nearly US$1 billion after interest accrued when CFFI stopped making payments. To help reduce its debt, CFFI has been selling valuable assets such as artwork and private aircraft.

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• Email: arankin@postmedia.com