Court File and Parties

Court File No.: CV-21-00661458-00CL Date: 2021-08-26 Superior Court of Justice – Ontario

Re: Ontario Securities Commission, Applicant And: Bridging Finance Inc., Bridging Income Fund LP, Bridging Mid-Market Debt Fund LP, SB Fund GP Inc., Bridging Finance GP Inc., Bridging Income RSP Fund, Bridging Mid-Market Debt RSP Fund, Bridging Private Debt Institutional LP, Bridging Real Estate Lending Fund LP, Bridging SMA 1 LP, Bridging Infrastructure Fund LP, Bridging MJ GP Inc., Bridging Indigenous Impact Fund, Bridging Fern Alternative Credit Fund, Bridging SMA 2 LP, Bridging SMA 2 GP Inc., and Bridging Private Debt Institutional RSP Fund, Respondents

Before: Chief Justice G.B. Morawetz

Counsel: John Finnigan, Adam Driedger and Erin Pleet, for the Receiver Adam Gotfried and Carlo Rossi, for the Ontario Securities Commission David Bish, for The Coco Group, 2693600 Ontario Inc., Rocky Coco and Jenny Coco Jeremy Dacks, for BlackRock Financial Management, Inc. Steven Weisz, for the University of Minnesota Foundation Steve Graff, for Investors in Various Bridging Funds Sharon Kour, Pat Corney, Andrew Kent, for the Ad-Hoc Group of Retail Investors David T. Ullmann, for the Respondents, Thomas Canning (Maidstone) Limited, William Thomas, Robert Thomas, and 2190330 Ontario Ltd.

Heard: August 23, 2021

Endorsement

[1] PricewaterhouseCoopers Inc. (the “Receiver”) brings this motion for an order, among other things:

(a) continuing the appointment of the limited partner advisory committee representing the Bridging Funds generally (the “LPAC”) and the limited partner advisory committee representing the Bridging Indigenous Impact Fund (the “BIIF LPAC” and together with the LPAC, the “Committees”) pending further order of the court;

(b) approving the process for the appointment of representative counsel for the Unitholders (“Representative Counsel”) as set out in the Sixth Report of the Receiver dated August 16, 2021 (the “Sixth Report”); and

(c) approving the Sixth Report and the activities, decisions and conduct of the Receiver set out therein.

[2] Subject to certain modifications with respect to the process for the appointment of Representative Counsel, the requested relief was not opposed.

[3] Having reviewed the Sixth Report as well as the submissions of counsel for the Receiver and for the Ad Hoc Committee of Retail Investors (the “Ad Hoc Committee”), I am satisfied that it is appropriate to extend the appointment of the Committees until further order of the court.

[4] I am also satisfied that it is appropriate to approve the activities, decisions and conduct of the Receiver as set out in the Sixth Report.

[5] The Receiver is of the view that the conduct of the receivership will be aided by the appointment of Representative Counsel. The proposed scope of the Representative Counsel mandate will be to advise Unitholders on:

(a) assessing sale, investment, and/or hybrid proposals received during Phase 2 of the SISP and providing feedback to the Receiver;

(b) assessing interfund allocation issues which may arise as a result of the Receiver’s report on these transfers, including the identification of conflicts which may arise between the Bridging Funds and the merits of any interfund claims which may arise; and

(c) analyzing claims that Unitholders may have against Bridging, its officers and directors and third parties arising out of the operation of the Bridging’s business.

[6] A number of law firms have expressed interest in the Representative Counsel mandate. The Receiver proposes that the law firms provide written proposals to the Receiver within 10 business days (the “Proposal Deadline”) and that the written proposal include details, among other things, of the qualifications of the candidate as well as any Unitholder support for the appointment of the candidate. The Receiver then proposes to interview each candidate and after consultation with the Committees, the Receiver will select one or more candidates to recommend to the court to be approved as Representative Counsel.

[7] Counsel for the Ad Hoc Committee submits that the Receiver’s appointment process should be approved with certain modifications to ensure the independence of Representative Counsel. In addition, counsel submits that the process should also avoid parties involved in the marketing and sale of Bridging units (who, in certain respects material to the appointment of Representative Counsel, may be adverse in interest to the retail investors) exercising or appearing to exercise undue influence over the appointment process. Counsel proposes the following modifications:

(a) instead of the Receiver soliciting written proposals from interested law firms and interviewing each candidate, interested law firms who meet certain baseline criteria shall apply to the court for consideration;

(b) instead of having the Committees and Receiver select candidates to recommend to the court, the court will consider the applications of interested law firms and will make a judicial determination having regard to the varied competing interests of stakeholders, creditors, and retail investors; and

(c) following its appointment, Representative Counsel will call for applications from retail investors to form a five to seven member committee to instruct Representative Counsel (the “RIC” or “Retail Investors Committee”).

[8] Counsel for the Ad Hoc Committee submits that the Retail Investors Committee’s primary goal is recovery of their investments. As such, they require counsel who can provide frank advice on their rights and entitlements without concern about business or ethical conflicts that may arise vis-à-vis financial institutions and brokers. They submit that the Representative Counsel appointment process must take this reality into account. As currently proposed, counsel submits that the Receiver’s Appointment Process does not provide the retail investors with any transparency or insight into their representative committees and does not offer the retail investors a clear vision of how their opinions will be presented to the court.

[9] In my view, the concerns raised by counsel for the Ad Hoc Committee are legitimate and need to be addressed. However, I also have to take into account that, given the ongoing SISP, time is of the essence in these proceedings. It is necessary that the selection of Representative Counsel be conducted on an expedited basis. In order to ensure that there are no delays in the selection process, the Receiver is to immediately commence the Appointment Process to obtain Written Proposals (both terms as defined in the Sixth Report).

[10] However, modifications are to be made to the Appointment Process. I will appoint an independent third party, immediately after the deadline for submissions of Written Proposals, to evaluate the Written Proposals and to recommend to the court the party to be approved as Representative Counsel. In formulating the process to evaluate the Written Proposals, the independent third party, in her or his sole discretion, can consult with the Receiver and counsel to the Ad Hoc Committee. The recommendation to the court is to be made within 10 business days of the Written Proposal deadline. I note that, during the hearing, counsel to the Ad Hoc Committee did not express any objection to my suggestion of this possible modified process.

[11] The independent third party is to be compensated at a reasonable hourly rate to be determined by the Receiver, after consultation with the independent third party, and is to be paid as a disbursement by the Receiver.

[12] With respect to the submissions by counsel to the Ad Hoc Committee concerning the Retail Investor Committee, it seems to me that this matter can be deferred until such time as Representative Counsel has been appointed and has had the opportunity to review the issue with the Receiver. If necessary, further directions may be sought on this point.

[13] An order shall issue to reflect the foregoing.

Chief Justice G.B. Morawetz

Date: August 26, 2021