Bridging Finance Inc.’s majority owner, Jenny Coco, allegedly used investor funds to secure a large construction loan for her luxury condo project with developer Sam Mizrahi, according to a lawsuit filed in an Ontario court.
Natasha Sharpe, Bridging’s co-owner and former chief executive officer, allegedly signed the document that named the Bridging Income Fund as a guarantor. However, Bridging was placed under the control of a court-appointed receiver in April, 2021, after the Ontario Securities Commission discovered several problematic loans and alleged impropriety. The receiver, PricewaterhouseCoopers LLP, hoped to sell the company to new owners, but a sale process yielded unsatisfactory bids because Bridging’s loan portfolio is in disarray.
Ms. Coco and Mr. Mizrahi both pledged their personal businesses as collateral, but Coco Paving Inc. did not meet the requirement. To add an extra backstop, Ms. Coco arranged for the Bridging Income Fund to act as an additional guarantor, CERIECO alleges in the lawsuit. Ms. Coco did not return requests for comment. Natasha Sharpe and David Sharpe, who took over from Ms. Sharpe as Bridging’s chief executive at the end of 2016, and who is her husband, both declined to comment through their respective spokespeople.
The loan was one of the first Bridging ever underwrote, and it has been in default since 2018. Mr. Mizrahi’s 181 Davenport project was set to be completed in the fall of 2016, according to court filings, but for reasons that aren’t known, the project’s last unit was sold four years later in July, 2020.
In a statement to The Globe, PwC said it is aware of CERIECO’s allegations, but declined to comment further. Despite this, the Chinese lender alleges Bosco Chan switched the guarantors in exchange for a “release fee” of $7.5-million to be paid from Coco Paving to CERIECO.
Keara was telling me about this yesterday!