MacDonald

"don’t want to be involved in day-to-day operations,” Risley explained. “I’m lousy at it.” MacDonald concurred. “John doesn’t have a sense of running things,” he told me. “John’s brilliant in the risk-taking, imagination, talking side. But operationally, he couldn’t run my arsehole.”"

"The whole rough operation—customers choosing lobsters from the tanks, Risley and MacDonald stuffing money down their hip waders and into their rubber boots, children buying canners by the dozen—resulted in what MacDonald described as a show. “It was something to bring your kids to, something to bring the family to.... You could look at the lobsters. You could pick out your own lobster. We didn’t do that on purpose. We did that because we didn’t have any money to do anything else.”"

"However, the Blades deal, according to MacDonald, “became a bit of a nightmare. We kept the Blades around to operate it. Never do that. Buy a business—never keep the prior owners,” he said. “We sold the main business back to them for a lot less than we had paid them for"

"Risley and MacDonald applied that lesson in 1994 when acquiring Yarmouth-based Laurence Sweeney Fisheries for more than $ 30 million. It was a significant, front-page-news purchase for Clearwater, giving it fish plants in Yarmouth and East Pubnico, five offshore trawlers, an office complex, almost half of Yarmouth’s developed waterfront, and 13.5 percent of Canada’s offshore scallop quota, meaning Clearwater now controlled more than a third of the scallop quota. Risley and MacDonald began consolidating immediately; Sweeney Fisheries would not operate autonomously in its own orbit, nor were all its assets of interest to Clearwater. So on the same day Risley and MacDonald cemented the deal, they began chopping Sweeney up to aid—not hinder—Clearwater. “We just closed down the plant in Yarmouth—sold it off to someone else—and moved all the boats and the processing activity to Lockeport. Bang, bang, bang,” Risley recalled. “We didn’t need it. What we wanted was the quota that they had in the scallop business. That was our principal interest.... We were just very matter of fact [saying], ‘Look this is our plan, we’re implementing it, and we’re getting on with it. And we’re not going to play games here.’” In other words, they would not repeat Jerry Nickerson’s mistake. Concluded Risley: “Jerry won’t be happy that he paid the price of that lesson.”"

"“Yes,” MacDonald replied. “I think sometimes I’m the voice of reason; he’s the voice of irrationality. But at times he would say that he’s the voice of ambition, and I’m the voice of hesitation—I’m the negativity; he’s the positivity."

"Risley had previously made around fifty pitches for the $ 20 million Clearwater needed to complete the series of deals he had lined up. Those pitches were mostly made to what Risley referred to somewhat derisively as “financial types.” The typical response had been, “Geez, that’s a lot of money. I don’t know.” Thompson was the opposite. “Twenty million? Is that all you need?” Risley, laughing, recalled him saying. Thompson turned to his CFO, John Jackson, and said, “Get your butt over to Canada and see what this young man is talking about.” So Jackson flew to Nova Scotia to meet with Risley and MacDonald and to inspect some of the deals Risley was eyeing. “And they sort of became my partner. We spent several years together building a big seafood business,” Risley concluded. “Twenty million wasn’t a lot of money for them but it was a huge amount of money for us.” Risley found no shortage of deals to pursue, eventually launching an acquisition spree that both amazed and baffled many in the seafood industry—how was a ten-year-old company able to afford so many purchases?"

"MacDonald also alleged Risley spent millions of dollars from their shared holdings when Clearwater was backed by Hillsdown, and also pre-spent their proceeds from the Ocean Nutrition sale. “The money is the business money. It’s not your personal money. And John has never been able to divide the two.” According to MacDonald, this was the real reason they’d launched the initial public offering (IPO) of Clearwater units. “The company was borrowing money to operate, and it wasn’t going just to operations. It was being spent... on his personal [expenses]. They’ll let some of that happen, but not to the extent that it was happening. I think that scared him.”"

"Risley admitted to being blind to an imbalance in the relationship: he was the dealmaker and while MacDonald could spend money, he lacked financial independence. “It was all resident in the fact that I controlled all the money,” Risley said. “I remember writing to him on his birthday a year after we had broken up. I said to him, ‘Look, I never understood that I had you trapped. I trapped you in this relationship.... You had access to all the lifestyle money you wanted [but] you were still subservient to me.’” What they should have done, Risley argued, was have a “come-to-Jesus session” at least every five years, starting around 1990, after they split with Hillsdown. That way each partner could have vented their concerns and proposed ways to fix any fissures in the relationship. Instead, MacDonald was too tolerant of the arrangement and Risley assumed the relationship was fine. “I should have been much more sensitive to his concerns, and I should have listened better,” Risley added. “I think the benefit to the reader of this story should be that, look, we didn’t do a good job of managing the last ten or fifteen years of our relationship. And that’s our bad. Do you want to put the preponderance of the blame on me? I’ve got absolutely no problem with that.” But, he concluded, “I can’t do anything about what’s behind me.”"

"“So am I fair in saying that at these different stages—with Hillsdown, Clearwater going public, and the sale of Ocean Nutrition—that John was pre-spending the money?” I asked. “Oh, fuck yeah,” MacDonald shot back. “He was building, buying, and pissing money away. I didn’t have a problem with him spending money. I simply assumed my money was still in the company.”"

"“The attraction was [to] get a bunch of capital and deploy it in diversifying our portfolio,” Risley recalled. That was the explanation Risley gave me for taking Clearwater public. When I asked MacDonald to explain the rationale, he paused. “Now, do you want the truth?” I laughed. “Please.” “We had lenders in the US who... got upset at John spending money personally out of the company. They called our loans. And we were all of a sudden in a dangerous place,” he said. “We lost our [main] lender.”"

"John Hancock would later help Risley and MacDonald raise nearly $ 200 million in their failed effort to privatize Clearwater. When I pointed that out, and noted it seemed unlikely John Hancock would have contributed if it had pulled its previous loan, Risley agreed. “Yeah, exactly,” he said. “But that just comes from Colin’s very peripheral understanding of really what was going on, and the fact that I wasn’t taking the time to tell him what was going on.”"

"Regardless of why it was launched, the IPO was a resounding triumph. It generated more than $ 271 million, of which Risley and MacDonald used roughly $ 130 million to pay off debt. That left them more than $ 100 million in CFFI, in addition to their remaining 55 percent stake in Clearwater."

"Clearwater at one time needed a dozen boats to harvest its scallop quota. The company transitioned to seven boats, then four, then two: the Atlantic Preserver and the Atlantic Protector—large factory ships that allowed Clearwater crews to harvest, process, and freeze up to two hundred thousand pounds of scallops in a two-week trip. Both vessels contained automatic shucking technology, the in-house machinery that took years to develop and was first used in 2010. Traditionally, a dexterous Clearwater crew member could hand-shuck fifteen scallops per minute; the shucking machines could process forty to fifty in that time, tripling the productivity of the vessels, MacDonald said. “We caught the same number of scallops, we just caught ’em in a third of the trips.” After being shucked, the scallops were counted, washed, and frozen. Within about twenty minutes they’d gone from the bottom of the ocean to a freezer set at-18 ° C."