PwC plans payouts to Bridging investors in 2024

Investors who were harmed in the collapse of alternative fund manager Bridging Finance Inc. are a step closer to getting some money back, but almost $300 million in disputed creditor claims must first be resolved.

According to new filings in the firm’s receivership proceeding, Bridging’s court-appointed receiver, PricewaterhouseCoopers Inc. (PwC), is hoping to begin distributing money to former Bridging fund unitholders in 2024.

The first major hurdle to returning money to investors was the litigation on the issue of whether certain investors deserved priority over others in the receivership.

That issue was resolved when the Ontario Court of Appeal overturned an initial ruling that would have given certain investors a priority claim, ruling instead that all investors should be treated equally. Counsel declined to appeal the reversal to the Supreme Court of Canada.

With that issue out of the way, the next big stumbling block is the validity of creditor claims against the Bridging funds that are disputed by the receiver.

According to court filings, the receiver accepted $51.8 million in claims against the firm and its funds — not including claims from the funds’ retail investors, as they weren’t required to submit claims. But another $297 million in claims remains under dispute. Before the receiver can begin distributing money, those disputed claims need to be resolved.

Given that the total amount of the disputed claims is close to the amount of cash that’s available for distribution in the Bridging funds, the court filings said “it may not be economically feasible to make an interim distribution” by simply setting aside money for the disputed claims.

“It is critical for [PwC] to advance the claims adjudication process as quickly as possible in order to meet its objective of making an interim distribution in 2024,” the filings said.

To meet that goal, on Jan. 26, the Ontario Superior Court of Justice will be asked for its blessing in appointing former judge Douglas Cunningham to head up a claims adjudication process designed by PwC.

Under the proposed process, the claims officer would rule on any disputed claims that can’t first be resolved between the receiver and the claimant. That may include referring disputes to mediation. These decisions would also be subject to an expedited judicial review process.

PwC said the process has been designed to balance the rights of claimants with the need to resolve the disputed claims as efficiently as possible to benefit all stakeholders in the receivership.

Once the disputed claims have been resolved, the receiver may finally be in a position to start returning money to investors in a receivership process that began almost three years ago, in April 2021.