(Bloomberg) -- An Ontario court cleared the way for a receiver to wind up bankrupt lender Bridging Finance Inc., rejecting an attempt by investors to stall the liquidation.
A group of Bridging unitholders had asked the Ontario Superior Court to allow more time to consider proposals to sell or reorganize the funds. But Justice Geoffrey Morawetz turned down their request and said PriceWaterhouseCoopers can cease its attempts to find a buyer, according to court documents posted Tuesday.
Investors in Bridging's private-credit funds face losses of more than $900 million after the firm was seized by a court order last spring. PriceWaterhouseCoopers took control of Bridging at the request of the Ontario Securities Commission, which said the firm's top executives misappropriated funds, took undisclosed payments and tried to mislead investigators.
Investors are expected to get back between 34% and 42% of the funds' reported net asset value as of March 31, 2021, which stood at C$2.1 billion ($1.7 billion).
Bridging Investors Face $941 Million Loss After Failed Sales Bid
BlackRock Funds, one of Bridging's creditors, said in a letter last month that PwC's recommendation to liquidate the funds was based on “limited and informal” feedback from unitholders.
BlackRock asked for full disclosure of alternative options -- including the details of the final sales bid -- to determine if unitholders can recover more money through other means besides liquidation.
Toronto-based Bridging lent money to small and mid-sized companies and attracted a following among high-net-worth individuals with promises of steady gains from its loan portfolio.
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