Monday Market Minute | Sep 08, 2025

Bridging Finance receivership nears conclusion — lessons for private credit governance

What Moved

PricewaterhouseCoopers, the court-appointed receiver for Bridging Finance Inc., filed its latest report indicating that the receivership was approaching its final stages. Recovery rates for unitholders were projected at 55-65 cents on the dollar — better than initial worst-case estimates but still a significant loss for the approximately 26,000 investors affected. The OSC's enforcement proceedings against former management continued separately, with potential implications for regulatory standards across the exempt-market lending industry.

Why It Matters

The Bridging Finance saga, which began in 2021, served as Canadian private credit's defining governance case study. For investors evaluating private credit and MIC opportunities, the lessons were now well established: independent valuation, custodial segregation of assets, auditor independence, and transparent conflict-of-interest policies were non-negotiable. The OSC's resulting regulatory enhancements had meaningfully improved industry standards. Well-governed private credit managers benefited from the raised bar — institutional allocators were willing to pay premium fees for demonstrated governance excellence.

Signal to Watch

The OSC's final enforcement ruling would determine whether the regulatory consequences were limited to Bridging Finance or whether broader industry requirements would follow, potentially including enhanced reporting obligations for all exempt-market fund managers.

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