Ontario court rules to end Bridging Finance sale process
An Ontario court has ruled to end the sale process for Bridging Finance Inc., clearing the way for the troubled private debt lender to be liquidated.
Ontario Superior Court Chief Justice Geoffrey B. Morawetz issued a ruling Tuesday to approve a motion brought forth last month by Bridging's court-appointed receiver, PriceWaterhouseCoopers Inc. (PwC), that sought to terminate a sale and investment solicitation process and instead wind down the firm.
The move is expected to see investors who once backed Bridging lose as much as $1 billion of their investments into the firm.
The ruling comes two days after a hearing where Morawetz heard arguments from lawyers representing Bridging investors who sought to have more information and a formal vote to determine whether Bridging's outstanding loan portfolio should indeed be wound down or be sold to an interested third-party.
PwC said in the motion filed last month that a liquidation may be the best outcome for the firm’s 26,000-odd unitholders even if they stand to lose as much as 70 per cent of their initial investment.
"The receiver will not be responding to specific questions or public statements, communication will be delivered through receiver reports that can be found on the PwC website and through statements in court," said Chiara Battaglia, national public relations manager at PwC, in an email.
Lawyers representing some of Bridging's concerned investors weren't immediately available to comment.
The ruling will likely mark an anti-climactic chapter for Bridging after the Ontario Securities Commission (OSC) placed the Toronto-based firm into receivership following allegations of fund mismanagement by its senior executive staff.
Executives, including former Chief Executive Officer David Sharpe, were accused of misappropriating millions of dollars from its investment funds, failing to disclose alleged payments made to Sharpe’s personal chequing account by an intermediary, and improper dealings with two key clients. None of the allegations have been tested or proven in court or before the OSC.