Court File and Parties

Court File No.: CV-21-661458-00CL Date: 2022-12-19 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: Grant B. Moffat and Adam Driedger, for the Receiver Mike Shakra and Robert Staley, for the Bridging Unitholders

Heard: December 19, 2022

Endorsement

[1] PricewaterhouseCoopers Inc. (“PwC”), in its capacity as receiver and manager, of all of the assets, undertakings, and properties (collectively, the “Property”) of each of the Respondents (in such capacity, the “Receiver”), brings this motion for an order;

(a) approving the proposed NAV Methodology set out in the Fifteenth Report of the Receiver dated December 13, 2022 (the “Fifteenth Report”) and the calculation and publication of the 2021 NAV;

(b) approving the 2022 Permitted Transfers; and

(c) approving the Fifteenth Report and the activities, decisions and conduct of the Receiver as set out in this Fifteenth Report.

NAV Methodology

[2] Pursuant to an order of the Court dated December 22, 2021 (the “2021 Permitted Transfer Order”), the transfer of units in the Bridging Funds was permitted in certain limited circumstances. Full details were provided in the Ninth Report of the Receiver.

[3] At the time of the Ninth Report, Canada Revenue Agency (“CRA”) advised that, in respect of the 2021 RRSP to RRIF Transfers, the fair market value of the RSP Funds as at January 1, 2022 would need to be established at a later date in order to calculate the minimum amount that each applicable Unitholder is required to transfer out of its RRIF for 2022 (collectively, the “2022 RRIF Minimum Amount”).

[4] CRA advised that, in the circumstances, the Receiver may provide an estimate of fair market value of the RSP Funds, using all available information, as at January 1, 2022 to facilitate the calculation of the 2022 RRIF Minimum Amount. CRA also advised that the Receiver may provide an estimate of the fair market value of the RSP Funds as at January 1, 2023 to facilitate the calculation of the minimum amount that each applicable Unitholder is required to transfer out of its RRIF for 2023 (collectively, the “2023 RRIF Minimum Amount”).

[5] The Receiver reports that it has received feedback from representatives of deceased Unitholders requesting an estimate of fair market value of certain Bridging Funds in order to process Deceased Unitholder Transfers and administer the estates of the deceased Unitholders.

[6] Accordingly, the Receiver has developed the NAV Methodology to provide an estimate of the NAV for each class of units of the applicable Bridging Funds to facilitate Permitted Transfers. For the purposes of the 2021 Permitted Transfers, the applicable Net Asset Value will be calculated as of the close of business on December 31, 2021 (the “2021 NAV”) and on an annual basis going forward at the discretion of the Receiver.

[7] The Receiver reports that a NAV established pursuant to the NAV Methodology, including the 2021 NAVs, has been produced for the sole purpose of facilitating Permitted Transfers and ensuring compliance with the Income Tax Act (“ITA”).

Permitted Transfers

[8] The Receiver also reported that, pursuant to ITA requirements, the property of a RRSP must be liquidated or transferred, at a specific dollar amount, to a RRIF by December 31 of the year in which the RRSP annuitant turns 71 years of age. The 2021 Permitted Transfer Order allowed the transfer of units from RRSP to RRIF accounts for Unitholders who met the criteria in 2021, notwithstanding the Cease Trade Order in effect. The Receiver now seeks similar approval for Unitholders who meet these criteria in respect of the calendar year 2022. Subject to obtaining that approval, the Receiver will consent on behalf of Bridging to the 2022 RRSP to RRIF Transfers.

[9] The 2021 NAV calculated in accordance with the NAV Methodology is required to facilitate the calculation of the 2022 RRIF Minimum Amount for applicable Unitholders. Similarly, a NAV calculated in accordance with the NAV Methodology as at December 31, 2022 (the “2022 NAV”) will be required to facilitate the calculation of the 2023 RRIF Minimum Amount. The Receiver will calculate and seek Court approval to publish the 2022 NAV at a later date.

[10] As units of the RSP Funds cannot be liquidated, to the extent a RRIF contains insufficient assets other than units of one or more RSP Funds to withdraw the 2022 RRIF Minimum Amount or the 2023 RRIF Minimum Amount, as applicable, the Receiver reports that a distribution in kind from the RRIF of units of the RSP Funds may be necessary in order to comply with the ITA. Accordingly, the Receiver is also seeking approval for the transfer of units of the RSP Funds to facilitate such a necessary distribution in kind, in each case at the discretion of the Receiver (each, a “RRIF In-Kind Transfer” and, together with the 2022 RRSP to RRIF Transfers, the “2022 Permitted Transfers”).

[11] Subject to Court approval, the Receiver advised it will consent on behalf of BFI, as Manager of the various Bridging Funds, to the 2022 Permitted Transfers.

[12] Given the terms of the Appointment Order, the Temporary Order, the current terms and conditions imposed by the Commission on BFI’s registrations under applicable securities laws, the Receiver is of the view that it is appropriate to seek the approval of the 2022 Permitted Transfers as it will allow the Receiver to consent to and effect reasonable 2022 Permitted Transfer requests.

[13] Representative Counsel supports the position put forth by the Receiver.

[14] The Receiver advised that the Ontario Securities Commission takes no issue with the requested relief.

[15] Canada Revenue Agency has been provided with the motion material and has not provided a position on the requested relief.

[16] Having reviewed the Fifteenth Report and hearing submissions, I am satisfied that the requested relief is appropriate in the circumstances.

[17] The Receiver also requested approval of its Fifteenth Report and the activities described therein. The Receiver has not received any adverse comment to the Fifteenth Report. The Fifteenth Report and the activities are approved, but in view of the short service, parties have the right to have this approval reviewed on terms set out in the order.

[18] The motion is granted and the order reflecting the foregoing has been signed.

Chief Justice G.B. Morawetz

Date: December 19, 2022