CFFI Ventures: no qualifying bid, and a portfolio sold for its own debt

What FTI Consulting Canada Inc. had to sell was a shareholding list. CFFI Ventures Inc. holds equity in MARA Renewables Corporation, which grows algae for omega-3 oils; in the skincare brand Skinfix Inc.; in Horizon Maritime Services Ltd.; in the hydrogen developer World Energy GH2 Inc.; in the powerline contractor Cormorant Utility Services Limited; and, through what the monitor calls an extensive corporate structure, in a long list of other companies and funds, along with receivables, insurance policies and roughly 1,281 pieces of artwork, per the Fifth Report of the Monitor, Aug. 25, 2026, paras. 19, 64(c), 80. From June 23, 2026, the monitor and FTI Capital Advisors – Canada ULC sent marketing materials and a process letter to 159 potential bidders: family offices, strategic investors, private equity funds and asset managers. Nineteen signed non-disclosure agreements, and seven bids arrived by the July 21 deadline. None counted, per the Fifth Report, Aug. 25, 2026, paras. 38, 41, 48.

When the court last dealt with this case, on June 15, the argument was whether CFFI's shares in Cormorant should be pulled out of the sale process; Justice Keith declined to carve them out and approved the process as proposed, per the *CFFI Ventures Inc. (Re)*, 2026 NSSC 195, paras. 57–64. On September 17, 2026, he issued a sale approval and vesting order transferring the whole portfolio to New Tide Capital LP, an affiliate of HPS Investment Partners, LLC, which is itself a subsidiary of BlackRock. The consideration is the assumption of CFFI's debt to the HPS Secured Creditors, per the Sale Approval and Vesting Order, Sept. 17, 2026, paras. 3, 5 and the Fifth Report, Aug. 25, 2026, paras. 64(b), 95.

The floor, and why the bids came in under it

Phase 1 asked only for a notice of intent to bid naming the buyer, describing what it wanted and reflecting what the monitor and the sale advisor judged a reasonably likely prospect of a Qualified Bid — and a Qualified Bid had to repay in full and in cash everything outstanding under the Note Purchase Agreement, alone or with other bids, unless the HPS Secured Creditors agreed to less. Six of the seven were for specific assets; one contemplated all or substantially all of them. Only two carried a price, and both assigned the assets a value substantially less than the amount the HPS Allocation Schedule assigned to the same assets. The other five gave no indication of value at all. Counsel to the HPS Secured Creditors told the monitor none of them met that test; HPS and SFPC Quantum LP both agreed the process should be terminated rather than go to Phase 2; the bidders were told on July 29 and the service list on July 30, per the Fifth Report, Aug. 25, 2026, paras. 29–30, 48, 51, 53–55.

The HPS Allocation Schedule is the monitor's own explanation for the gap between interest and bids. The HPS Secured Creditors gave the monitor a draft purchase agreement on or about June 25 allocating portions of their debt to individual assets — artwork and equity investments alike — and the monitor, with authorization, put it into the confidential information memorandum. Of approximately US$1,118.3 million owing as at March 13, 2026, the schedule allocated approximately US$932.5 million across the assets and left the balance unallocated. "The HPS Allocation Schedule acted as an indicative price floor. Unless the HPS Secured Creditors agreed to a lower amount for a particular asset, potential bidders had to meet or exceed the amount allocated to any particular asset." Bidders, the monitor and sale advisor understood from the submissions, generally valued CFFI's assets below the debt allocated to them, per the Fifth Report, Aug. 25, 2026, paras. 42, 56, 58–61.

Consideration that is not a number

The absence of any notice of intent to bid entitled the HPS Secured Creditors, under paragraph 12 of the process, to put forward a credit bid or debt assumption transaction, deemed the successful bid if its terms satisfied the monitor and the sale advisor and it offered no more than the debt owed. What they submitted was a debt assumption transaction, and the agreement carries no purchase price in dollars, per the Fifth Report, Aug. 25, 2026, paras. 32, 63–64. The purchaser assumes the Assumed Liabilities and the parties agree the purchase price is the value of those liabilities — obligations under the assigned contracts and permitted encumbrances, certain employee liabilities, and the whole of the debt under the Note Purchase Agreement. Within thirty days after closing they are to determine jointly, in good faith, the value allocated to each purchased asset by reference to its fair market value on the transfer date; failing agreement, the allocation goes to the court, per the Revised Asset Purchase Agreement, Sept. 16, 2026, ss. 3.1–3.3.

The monitor's brief sets the two figures beside each other. Ernst & Young LLP assessed the fair market value of the assets proposed to be transferred under the earlier Companies Act plan — assets that largely mirror these — at $367.0 million in March 2026, an assessment the monitor's third report found reasonable. "By contrast, the HPS Secured Creditors are assuming the NPA Indebtedness, which is approximately US$1.12 billion," per the Brief of Law of the Monitor, Aug. 25, 2026, para. 49. Quantum, the Canada Revenue Agency and Brendan Paddick, a Cormorant minority shareholder and CFFI unsecured creditor, had asserted before the process began that HPS was a related party; CFFI and HPS disputed that but agreed to have it treated as one for the limited purpose of s. 36(4) of the CCAA, to avoid the delay and expense of fighting about it. The monitor's position is that both branches of s. 36(4) are met — good faith efforts to sell to unrelated persons, and consideration superior to anything else the process produced, per the Fifth Report, Aug. 25, 2026, para. 90.

What had to be waived to move the shares

Most of the equity interests being sold are governed by shareholder agreements, partnership agreements, articles and like documents carrying rights of first refusal, rights of first offer, tag-along rights, transfer and change-of-control restrictions, and repurchase rights triggered by insolvency. Strict compliance would be costly and slow, the monitor's evidence runs, and without relief it is unlikely CFFI could sell its assets in a timely way, if at all, per the Fifth Report, Aug. 25, 2026, paras. 74–75. So the order waives them: from the effective time, all persons are deemed to have irrevocably waived any default, right or non-compliance under any organizational document or contract arising out of CFFI's insolvency, the commencement of these proceedings, or the agreement and the transaction, per the Sale Approval and Vesting Order, Sept. 17, 2026, para. 9.

The argument for that relief rests on s. 36(6) of the CCAA — a sale "free and clear of any security, charge or other restriction", with the general words read ejusdem generis to reach contractual restrictions on share transfers — and on s. 11, citing Arrangement relatif à Xebec Adsorption Inc., 2023 QCCS 466, where a right of first refusal was held "fundamentally ill-suited to a CCAA bidding process", per the Brief of Law of the Monitor, Aug. 25, 2026, paras. 57–64. If it were refused, the monitor is advised, HPS would be prepared to proceed by reverse vesting order on essentially the same economic terms. The waiver is bounded: it suspends compliance for this transaction only, so any future dealing in the transferred equity interests must comply with the restrictions, per the Fifth Report, Aug. 25, 2026, paras. 76–77.