CFFI Ventures Inc. is a holding company. What it holds is artwork and a range of equity investments — which is why, as Justice Keith puts it, it is not proposing to emerge from these proceedings as a rehabilitated operating entity. It is proposing to sell everything, per *CFFI Ventures Inc. (Re.)*, 2026 NSSC 195, para. 35.
Every party at the hearing agreed some form of sale and investment solicitation process was appropriate. What they fought about was whether one asset should be in it.
The debt, and the size of the uncertainty in it
The HPS Creditors — HPS Investment Partners LLC as agent and lead arranger, together with three mezzanine funds — hold security in substantially all of CFFI's present and after-acquired personal property and interests in capital stock, securing obligations under a Note Purchase and Guarantee Agreement dated October 23, 2017 and amended and restated April 25, 2019.
The original principal was about US$250 million. The monitor places the balance at approximately US$1.118 billion as at March 13, 2026, the growth driven by years of default interest with compound interest as a major factor.
The monitor also acknowledges that the calculation is complicated and, depending on issues of contractual interpretation, the figure could be as low as US$790.3 million, per 2026 NSSC 195, paras. 1, 3.
A range of roughly US$328 million, turning on how a credit agreement is read, is worth pausing on. It is not a modelling assumption. It is the difference between two defensible readings of what the borrower agreed to pay.
CFFI began with a plan of arrangement under the Nova Scotia Companies Act, saw the responses from certain creditors, and pivoted to the CCAA, with FTI Consulting Canada Inc. appointed monitor as the statute requires, per 2026 NSSC 195, para. 4.
The Canada Revenue Agency originally estimated its claim at $332 million. That was contested and reviewed; the reassessment is complete and reduces the claim without changing CRA's status as an unsecured creditor. CRA took no position on the SISP, per 2026 NSSC 195, para. 11.
The one asset with a different priority on it
The exception to HPS's first position is CFFI's shareholding in Cormorant Utility Services Limited.
SFPC Quantum LP advanced funds to Cormorant under a credit agreement amended and restated March 28, 2025 — originally $41.26 million, approximately $28.5 million outstanding at May 31, 2026. CFFI guaranteed that debt on May 24, 2022, and its guarantee obligations are secured by Quantum's security interest in all Cormorant securities CFFI owns or acquires.
By a subordination agreement of the same date, HPS agreed to subordinate its security in the Cormorant collateral to Quantum's. So Quantum ranks first on CFFI's Cormorant shares, and behind HPS on everything else, per 2026 NSSC 195, paras. 6–8.
The cap table matters to what follows. CFFI owns 38.77% of Cormorant fully diluted — and, the judge notes in a footnote, is actually the majority shareholder on an undiluted basis. Brendan Paddick owns 35.16%, Quantum 10.03%, and unnamed employees the remaining 15.05%, per 2026 NSSC 195, para. 7.
Cormorant did not file. It is a closely held, non-filing company in which the debtor happens to hold the largest block.
What each side wanted
CFFI and the monitor wanted one process covering everything, with a credit bid by the HPS Creditors included as a feature that establishes a floor value, and Qualified Bids required to repay the HPS debt in full in cash on closing unless HPS agrees otherwise — individually or in combination, per 2026 NSSC 195, paras. 17, 25.
The mechanics are tight. Notices of intent to bid by July 21, 2026; binding Qualified Bids by August 11, 2026; each bid capable of closing within 45 days of selection, binding and executed, supported by evidence of fully committed financing, not conditional on further due diligence or financing, and accompanied by an irrevocable commitment to complete, per 2026 NSSC 195, paras. 16–17.
Quantum and Mr. Paddick wanted the Cormorant shares excluded and moved into a separate, standalone strategic process that Cormorant itself would drive — opening up refinancing, a new equity injection, or a standalone sale of the business as a going concern. They argued Cormorant would be highly incentivised to maximise the value of its own shares; that contractual restrictions in shareholder and credit agreements might complicate any transfer, complications a consent-based process would avoid; and that as first-ranking creditor over that collateral, Quantum's views deserved corresponding weight, per 2026 NSSC 195, paras. 28–32.
The judge's summary of the dispute is the cleanest sentence in the decision: it "pits a debtor advocating for a comprehensive, court-supervised, market process designed to maximize value against a secured creditor seeking to protect its first-ranking priority rights and resist a process that it says may constrain realization of value for that particular asset", per 2026 NSSC 195, para. 12.
The framework
The decision sets out five foundational principles before reaching the specific test, and they are usefully assembled in one place: the CCAA's flexible, court-centred character anchored in s. 11 (Century Services, 2010 SCC 60 at para. 14); the now-commonplace liquidating CCAA (9354 Québec inc. v. Callidus Capital Corp., 2020 SCC 10 at para. 42); the supervising judge's unique role and positional advantage (9354 at paras. 47–48); the constraints of appropriateness, good faith and due diligence (9354 at para. 49); and the monitor as a mandatory presence with fiduciary obligations to the court — its "eyes and the ears" (9354 at para. 52), per 2026 NSSC 195, paras. 33–39.
The specific test draws on Re SaltWire Network Inc., 2024 NSSC 89 at para. 27 — fair, transparent, commercially efficient, cost-effective, preserving the integrity of the CCAA process — and the Nortel factors: is a sale warranted now, will it benefit the whole economic community, do creditors have a bona fide reason to object, and is there a better viable alternative. Those are guides, not a checklist, and are to be evaluated with an eye to the s. 36(3) considerations that will apply when approval of a concluded sale is later sought, per 2026 NSSC 195, paras. 40–44.
On the SaltWire formulation of the last factor, the question is put "in very simple terms: does any person have a better idea?"
Why the better idea failed
Justice Keith did not dismiss Quantum's arguments. He said they possessed "a number of appealing qualities" and accepted much of their premise — that Cormorant would be highly incentivised, would not want its share value artificially deflated, might creatively deploy more strategic options including recapitalisation or equity offerings, and that there were real contractual and confidentiality frictions a consent-based process would avoid, per 2026 NSSC 195, para. 57.
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