Lenders have ignored the existence of a $150 million loan from Huot Group for years, our investigative bureau has learned that its disclosure in February 2023 could be one of the triggers for its financial collapse.
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In April 2020 and May 2021, the Huot Group took out a $120 million loan from a company then linked to Quebec businessman Robert Giroux, who brought in about 75 millionaires from Quebec for investment. 12%
It took until February 17, 2023 for the $150 million mortgage – taken on the Huot Group’s buildings and linked to this loan – to be registered in the land register. It was at this time that many discovered the existence of this loan contracted three years earlier.
The rest is now known: a week later, Huot Group disclosed its major financial difficulties in a press release and halted its construction sites due to rising interest rates and inflation.
According to our information, the disclosure of this additional debt caused a stir among Stéphan Huot’s other creditors.
“There was an earthquake,” explains a source familiar with the matter.
Creditors invested huge sums in the Quebec conglomerate, ignoring its true indebtedness.
“Knowing there’s a $150 million mortgage, I’d never make a loan,” complained a lender who injected millions of dollars into a subsidiary of the Huet Group.
After a “long weekend” of investigation and verification, creditors realized the financial difficulties of the Huot Group, which did not even have enough money to pay its employees.
Ultimatum from creditor
This $150M mortgage issuance also includes one of Huot Group’s largest lenders. Timbercreek Mortgage Servicing is now demanding $250 million in reimbursement within 60 days, failing which it will seize several residential buildings that make up the Quebec giant’s real estate portfolio.
Thus the company registered seven notices of sale under judicial control in early May.
According to our information, Timbercreek is currently in talks with a group of Quebec lenders who have been working for weeks on a backup plan aimed at regaining control of the housing stock, in order to reach an agreement.
A “treaty”, justifies Huot
Real estate developer Stéphan Huot has denied having “hidden debt”. His spokeswoman Florence Brouillard explained that he had an “agreement” with the company run by Robert Giroux that this $150 million mortgage would not be published unless he defaulted.
“But on February 17, Robert Giroux breached the contract and would have published it even though Stephane Hutt was not in default,” she insisted, without elaborating on why the mortgage was never made public. It was created.
Robert Giroux’s attorney declined to comment on the case.
Made up of nearly a hundred companies active in nearly twenty different business sectors, the Huot Group halted its construction sites and continued layoffs in mid-February.
Financial difficulties prompted the company to end part of its operations at the Capital Helicopter Complex near the Quebec City airport. Stephane Hoot also left his position at the Transrapid distribution center on Quebec’s south coast, which is under the protection of the Creditors’ Arrangement Act.
Stephane Hutt – who has not publicly commented on the debacle – has put his Lebourgneuf building up for sale. His Florida penthouse And two lots in Lac-Beauport were seized by his ex-wife, who is claiming $2.3 million from him.
As of last April, Huot Group had more than $900 million in active loans on its buildings. As of April 28, data from the firm Terram Technologies showed 357 legal construction mortgages totaling just under $158.6 million were registered on the buildings of the conglomerate and its subsidiaries.