The Huot Group is “going to the wall” in the winter of 2022, a year before media coverage of its financial debacle, Stéphan Huot acknowledges.
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In an out-of-court hearing obtained by our Bureau of Investigation, the embattled real estate developer revealed that his company’s financial condition has been “alarming” since early 2022. At the time, its working capital was “wiped out” and it “could no longer pay” the interest on its loans, he said.
This is the first time we’ve gotten to know the version of Stefan Hoot since his tumultuous start that peaked a few days ago. He was forced to seek refuge from his creditors for debts of nearly $1.2 billion.
The testimony on Aug. 29 comes in the wake of a $150 million civil lawsuit against Robert Giroux, a businessman who led 75 millionaires from Quebec to invest in Huot Group. They accused Giroux and his companies of setting up A scheme similar to a Ponzi scheme and enriching themselves at their expense.
Lack of liquidity
They accused Robert Giroux of hiding the existence of the Huet Group’s financial difficulties from the millionaires, who continued to solicit their money. Stefan Huth claims he informed Robert Giroux of the extent of his problems in early 2022.
“I’m afraid: if we don’t do anything, we’ll hit the wall,” he declared, referring to rising interest rates and construction material prices.
Money is “diverted”
However, Huot Giroux could borrow about $75 million from the companies, sometimes at a “60% interest rate,” between March and December 2022. Some of this money was used to pay the 12% interest paid to the millionaires. , in addition to management and administrative fees charged by Giroux, Mr. Identifies Huot.
The millionaires criticize Mr Giroux for not doing adequate follow-up on the amounts paid to Hutt. The latter “did not suspect that the money had been embezzled and used to pay a false return […] or to happily remunerate the Giroux Group,” they argued in an amended version of their lawsuit.
Photo by Voyou – Creative Performance
Robert Giroux
Possible solutions
Stéphan Huot would have tried to find solutions to his problems. He wanted the new financing to escape the “clumps” of funds managed by Robert Giroux, which he said were “too expensive.” In vain.
Lacking cash, he reportedly delayed paying suppliers in the summer of 2022. In October 2022, he feared he would not “finish” the holidays.
Millionaires Only was informed in December 2022 of Huett Group’s woes at an annual meeting with Robert Giroux. But the latter was reassured by the situation. But 1er By February 2023, Huot was unable to pay interest to millionaires. And two weeks later, the group’s debacle made headlines.
Since then, practically nothing remains of the conglomerate that was once active in construction, real estate, catering, warehousing and flying lessons etc.
A $150M lawsuit went to trial in January
A $150 million civil lawsuit against Robert Giroux launched by Quebec millionaires is set to go to trial in January 2024. Five days are reserved for this case.
The millionaires accuse Giroux and his companies of using their money to “provide false returns” to other lenders in what they say is a Ponzi scheme.
In a new version of their lawsuit filed in court last week, they identified various loans granted by Robert Giroux’s companies to Stephane Hout in 2022, but which were ultimately used to finance the creditors’ interests.
Robert Giroux has denied allegations of being linked to an alleged Ponzi scheme. He claimed to have learned about Huot Group’s bankruptcy only in December 2022. He will not face any criminal charges.
Until trial, Robert Giroux took it upon himself not to dispose of his assets and to notify the plaintiffs if he sold more than $25,000 in assets.
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