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A Bit of Good News for Bridging Investors: Why a Rejected $213M Claim Matters

February 03, 2026

For anyone still stuck in the long Bridging Finance Inc. unwind, the last few years have been a lesson in how slowly complex recoveries move. But a decision reported on January 9, 2026 finally delivered something investors haven’t had much of: a clear win.

A court-appointed claims officer rejected a $213-million claim against Bridging’s flagship fund—an outcome that could improve recoveries for everyday unitholders by removing a major overhang that was holding back distributions.

The quick backstory

Bridging and its funds have been in receivership since April 2021, after the Ontario Securities Commission raised concerns about possible misconduct at the firm.

The court appointed PricewaterhouseCoopers Inc. as receiver.

Then, in May 2025, retail investors received an interim distribution of $321 million—the first meaningful payback many had seen since the collapse.

So what changed in January 2026?

According to the report by Advisor.ca, the receiver had originally hoped to distribute $491 million, but the amount was reduced because one unresolved claim was so large it threatened to swallow a major chunk of available cash.

That claim came from Cerieco Canada Corp., which argued it was owed $213 million (plus interest and costs) by the Bridging Income Fund, based on an alleged “secret” loan guarantee tied to the failed The One development at One Bloor St. West in Toronto.

A court-appointed claims officer—Douglas Cunningham—has now disallowed Cerieco’s claim, finding the alleged guarantee wasn’t valid.

Why the claims officer rejected the $213M “secret guarantee”

The decision (as summarized in the article) hinged on a few common-sense but crucial points:

The guarantee was allegedly executed by Bridging co-founder Natasha Sharpe on behalf of the fund’s general partner, Sprott Genpar Ltd.—but the claims officer found she didn’t have authority to expose the fund to that obligation.
The claims officer also found there was no rational reason for the fund to take on roughly $200 million in risk “for no upside.”
And the alleged guarantee being kept “secret” (not disclosed to the borrower and not reported in the fund’s financials) should have been a major red flag for the claimant.

In other words: even in messy, private-credit structures, paperwork and proper signing authority still matter—and courts tend to be allergic to “surprise” liabilities that don’t show up where they should.

What this means for investors (and what it doesn’t)

What it potentially means:

With a $213M claim knocked out, there may be more room for future distributions—because a large disputed claim was one of the reasons the court ordered the receiver to hold back part of what it initially hoped to distribute.

What it does not mean:

It doesn’t guarantee an immediate new payout. Receiverships still move through court processes, asset sales/collections, and ongoing disputes before cash gets approved and released.

The bigger lesson: “yield” can hide legal risk

Bridging’s story is often framed as a collapse of an alternative lender. But for many investors, the more lasting takeaway is simpler:

When investments rely on private deals—loans, guarantees, related-party structures—the legal enforceability of contracts can matter as much as the underlying economics. If authority, disclosure, or documentation is shaky, recoveries can swing wildly based on decisions like this one.