Monday Market Minute | Feb 19, 2024

Bridging Finance receivership drags on — investor recoveries remain uncertain

What Moved

PricewaterhouseCoopers, acting as court-appointed receiver for Bridging Finance, released its latest distribution update in February. Investor recoveries remained well below 50 cents on the dollar, with complex litigation and difficult-to-liquidate loan portfolios slowing the process. The receivership — which began in April 2021 — had become one of Canada's longest-running exempt market failures.

Why It Matters

Bridging Finance remained the defining cautionary tale for Canadian private credit investors. The case underscored the importance of independent fund administration, transparent NAV reporting, and genuine diversification within private lending portfolios. For new allocators entering private credit at peak yields, Bridging was a reminder that due diligence on the manager mattered more than the return profile.

Signal to Watch

Criminal proceedings against former CEO David Sharpe were advancing through the courts. A conviction — expected later in 2024 — would mark a significant moment for exempt market accountability and could influence OSC enforcement priorities going forward.

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