Businessman Gary Ng, a key figure in the Bridging Finance scandal, cited inaccurate legal precedents created by artificial intelligence to draft last-minute legal filings as part of his efforts to drag out his already years-long bankruptcy proceedings, according to an Ontario judge. <\/p>\n
In a March 2 decision<\/a>, Ontario Court of Justice in Bankruptcy and Insolvency associate justice Alexander Ilchenko said Mr. Ng\u2019s conduct \u201cwas in its totality improper, unnecessary, taken through negligence and in every possible way lengthened unnecessarily the duration of the proceeding.\u201d<\/p>\n Mr. Ng, who paid $100-million in cash to buy Vancouver-based investment dealer PI Financial Corp. in 2018, was legally declared bankrupt in April, 2023. Since then, the Winnipeg-born businessman has made no attempt to repay any of his $27.2-million in debts, and his bankruptcy trustee has only been able to recover roughly $131,000, all of which has been consumed to date by professional fees.<\/p>\n Mr. Ng is also the former co-owner of failed private lender Bridging Finance Inc., which was led by husband-and-wife team David and Natasha Sharpe until the company was placed into receivership in 2021. He bought a 50-per-cent stake in Bridging in the summer of 2019 and his companies had received more than $113-million in loans from Bridging investment funds. Multiple investigations found Mr. Ng lied about the collateral<\/a> used to obtain those loans.<\/p>\n From the archives: The Bay Street whiz kid who wasn\u2019t: Searching for the real Gary Ng<\/a><\/p>\n During a Dec. 16, 2024, interview<\/a> with KSV Restructuring Inc., his bankruptcy trustee, Mr. Ng \u201cplainly admitted\u201d to bribing the Sharpes in exchange for overlooking due diligence requirements related to his loans, according to a 2025 decision from a prior bankruptcy hearing before Justice Peter Osborne.<\/p>\n \u201cYeah, a couple hundred grand here and there,\u201d Mr. Ng told KSV at the time. \u201cGifts, like, a gold Rolex that David wanted. Natasha got a diamond necklace that she wanted.\u201d<\/p>\n Last month\u2019s decision from Justice Ilchenko was precipitated by a motion from Mr. Ng to have what he described as \u201cguardrails\u201d imposed on KSV, including a requirement for the trustee to provide cost-benefit and proportionality analyses, a high-level budget and a timeline. <\/p>\n But Justice Ilchenko balked at the request, telling Mr. Ng that in the three-plus decades he had practised bankruptcy law, he had never seen an order to establish the type of \u201cguardrails\u201d Mr. Ng wanted. Justice Ilchenko wrote there was \u201cno actual evidence\u201d that one of the trustee\u2019s investigators and one of his creditors were \u201crelated\u201d solely because the investigator sat on the creditor company\u2019s board, which was the basis of Mr. Ng\u2019s request.<\/p>\n \u201cIf interlocking directorship was the test for \u2018relatedness\u2019, I suspect a large proportion of the TSX would be deemed \u2018related\u2019, with ensuing disastrous tax consequences,\u201d Justice Ilchenko wrote.<\/p>\n Even if Mr. Ng\u2019s proposed \u201cguardrails\u201d request were approved, Justice Ilchenko questioned who would actually receive and review all of those documents. Mr. Ng simply replied \u201cNot me.\u201d<\/p>\n When pressed \u201cthen who, precisely?\u201d Mr. Ng suggested the Office of the Superintendent of Bankruptcy, or OSB. The OSB has not intervened in the case to date, Justice Ilchenko wrote, and \u201cmay be surprised that it is being drawn into policing\u201d Mr. Ng\u2019s case.<\/p>\n Later in his decision, Justice Ilchenko noted \u201cthis is not the first time [Mr. Ng] has made unfounded accusations related to the conduct of the trustee and the inspectors,\u201d referring to the 2025 ruling from Justice Osborne that \u201crejected a prior raft of accusations\u201d brought by Mr. Ng.<\/p>\n Mr. Ng also \u201cadmitted using AI to generate his materials,\u201d Justice Ilchenko wrote, adding they were submitted \u201cliterally\u201d at the 11th hour the night before the hearing \u201cand that he did not actually read the cases and paragraph references cited in his materials for the propositions he put forward, but relied on AI to do it for him.\u201d <\/p>\n Justice Ilchenko said he could not find a reference that matched one of the cases Mr. Ng submitted, and noted that the lawyer for his bankruptcy trustee said \u201cthere may have been several other hallucinatory AI citations\u201d in his materials.<\/p>\n In 2022, one of the predecessor bodies to the current Canadian Investment Regulatory Organization (CIRO) levelled a $5-million penalty against Mr. Ng for having \u201cengaged in fraudulent conduct with respect to loan financing\u201d and ordered him to pay an additional $194,000 in costs. That money, combined with a $4-million guarantee Mr. Ng provided on a $21-million loan from Bridging, account for roughly one-third of his total debt.<\/p>\n