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.
In a March 2 decision, Ontario Court of Justice in Bankruptcy and Insolvency associate justice Alexander Ilchenko said Mr. Ng’s conduct “was in its totality improper, unnecessary, taken through negligence and in every possible way lengthened unnecessarily the duration of the proceeding.”
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.
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 used to obtain those loans.
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During a Dec. 16, 2024, interview with KSV Restructuring Inc., his bankruptcy trustee, Mr. Ng “plainly admitted” 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.
“Yeah, a couple hundred grand here and there,” Mr. Ng told KSV at the time. “Gifts, like, a gold Rolex that David wanted. Natasha got a diamond necklace that she wanted.”
Last month’s decision from Justice Ilchenko was precipitated by a motion from Mr. Ng to have what he described as “guardrails” imposed on KSV, including a requirement for the trustee to provide cost-benefit and proportionality analyses, a high-level budget and a timeline.
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 “guardrails” Mr. Ng wanted. Justice Ilchenko wrote there was “no actual evidence” that one of the trustee’s investigators and one of his creditors were “related” solely because the investigator sat on the creditor company’s board, which was the basis of Mr. Ng’s request.
“If interlocking directorship was the test for ‘relatedness’, I suspect a large proportion of the TSX would be deemed ‘related’, with ensuing disastrous tax consequences,” Justice Ilchenko wrote.
Even if Mr. Ng’s proposed “guardrails” request were approved, Justice Ilchenko questioned who would actually receive and review all of those documents. Mr. Ng simply replied “Not me.”
When pressed “then who, precisely?” 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 “may be surprised that it is being drawn into policing” Mr. Ng’s case.
Later in his decision, Justice Ilchenko noted “this is not the first time [Mr. Ng] has made unfounded accusations related to the conduct of the trustee and the inspectors,” referring to the 2025 ruling from Justice Osborne that “rejected a prior raft of accusations” brought by Mr. Ng.
Mr. Ng also “admitted using AI to generate his materials,” Justice Ilchenko wrote, adding they were submitted “literally” at the 11th hour the night before the hearing “and 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.”
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 “there may have been several other hallucinatory AI citations” in his materials.
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 “engaged in fraudulent conduct with respect to loan financing” 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.
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Nearly four years after receiving the CIRO fine, Mr. Ng has still made no payments, CIRO spokesperson Ariel Visconti confirmed by e-mail on Tuesday.
Also in 2022, Mr. Ng was charged criminally by the RCMP’s Integrated Market Enforcement Team with fraud and money laundering.
The criminal case is continuing and Mr. Ng has a court appearance set for Wednesday. An RCMP spokesperson said the police have no comment on matters before the court.
Christi Hunter, who was Mr. Ng’s defence lawyer in 2022 and at the time said he “intends to fully defend himself through the criminal process,” said by e-mail on Tuesday that she no longer represented him. It is unclear whether Mr. Ng has since retained new criminal defence counsel. In his latest bankruptcy court appearance before Justice Ilchenko, he represented himself.
Most of the money recovered from Mr. Ng’s estate so far came from the sale of his car for $119,000, with another $9,200 coming from an auction of his vintage wine collection. The trustee also found $2,151 in unused retainer funds held in the trust account of Mr. Ng’s legal counsel and $480 in his trading accounts.
The day after Justice Ilchenko heard his “guardrails” motion, Mr. Ng abandoned the request.
At four separate points in his decision, Justice Ilchenko said Mr. Ng’s request was “doomed to failure” owing to lack of evidence. Mr. Ng’s conduct was “precisely the type of behaviour” that “should be subject to the sanction by the court” of awarding costs to the trustee, he wrote.
Mr. Ng was “labouring under the misapprehension” that he had impunity from costs associated with his legal motions while he remained in bankruptcy, Justice Ilchenko wrote, even if those motions go poorly “as this motion did.”
“I proceeded to disabuse the Bankrupt of that misapprehension,” he wrote.
Justice Ilchenko gave Mr. Ng until April 2 to pay KSV a total of $12,366.72.