A gavel rests on its sounding block with a several law books and a justice scale out of fucus in the background. A cool blue cast dominates the scene. (A gavel rests on its sounding block with a several law books and a justice scale out of fucus in t

Citing the “chaos” surrounding the ongoing receivership of troubled asset manager Bridging Finance Inc. (BFI), an Ontario court has pushed back consideration of a motion from the firm’s receiver seeking to go ahead with the firm’s liquidation.

At a hearing on Friday, PricewaterhouseCoopers Inc. (PwC) — appointed as BFI’s receiver by the court almost a year ago at the request of the Ontario Securities Commission — sought the court’s approval for its planned course of action in the case.

It proposed terminating the process of considering bids for the firm and its funds, and opting instead to continue with the process of winding down the firm and returning assets to investors.

According to court filings, the move to scrap efforts to sell the firm followed a recommendation from Bennett Jones LLP, which the court appointed to represent investors’ interests.

However, the proposal to continue with the liquidation process under PwC led to the “chaos” cited by the court in its decision to adjourn the proceedings until late March.

In an oral ruling, Chief Justice Geoffrey Morawetz of the Superior Court of Justice said that PwC’s motion would come back before the court in the week of March 21.

The ruling followed a flurry of last-minute filings in the case from PwC, counsel for BlackRock Financial Management Inc. (which was one of two final bidders for BFI), and lawyers for an unnamed investor in the BFI funds who sought an adjournment until after March 31.

Among other things, those filings raise concerns about the adequacy of the communication with retail investors, and whether investors have had enough of a say in the proposed decision to continue with the liquidation rather than pursue one of the bids for BFI.

Filings by PwC indicate little support among investors for a cash offer for the firm and some support for a proposed restructuring proposal, but more than double the support for continuing with the liquidation.

In a letter to unitholders, PwC said the financial outcome of the liquidation plan and the restructuring proposal are likely to be similar — investors are expected to lose over half their money, at least $1 billion — but that the primary advantage of continuing the liquidation is that investors could get quicker access to the money they’ll recover.

The firm said if its plan is approved by the court, it would seek approval for an initial distribution to unitholders by June 30.

However, in its filing, counsel for BlackRock said it believes its bid would give investors “the best opportunity to maximize the value of their investments in the Bridging funds” and that investors should have a chance to vote on the outcome.

Additionally, it argued that if the court determines liquidation is the better option, PwC should consider alternatives for that job that may be more cost effective than continuing with the current process.

Under BlackRock’s alternative liquidation proposal, “unitholders who wish to liquidate would have the option to do so at a much lower cost than the receiver’s liquidation proposal, with fees to be incurred based on what is recovered (as opposed to paying the hourly fees of the receiver and its advisors), and unitholders who wish to continue with a going concern would be provided with the opportunity to do so,” it said in its filing.

Ultimately, given the last-minute objections, the court granted a short adjournment in the case, giving the various sides more time to sort out their positions before returning to the court for its decision on the direction the process should take.