The Huot Group “hit the wall” in the winter of 2022, a year before the media reported on its financial debacle, admits Stéphan Huot.
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In an out-of-court interrogation received by our investigative agency, the ousted real estate developer reveals that his company’s financial situation was “alarming” from the beginning of 2022. At that time, working capital was “wiped out.” and he is “no longer able” to pay the interest on his loans, he claims.
This is the first time we know Stéphan Huot’s version since his confusion began, which reached its climax a few days ago when he was forced to seek refuge from his creditors for debts of almost $1.2 billion seek.
This testimony took place on August 29, on the sidelines of the $150 million civil lawsuit against Robert Giroux, the businessman who persuaded 75 Quebec millionaires to invest colossal sums in the Huot group. They accuse Giroux and his companies of creating a scheme similar to a pyramid scheme and enriching themselves at their expense.
Lack of liquidity
Robert Giroux allegedly concealed the existence of the Huot Group’s financial difficulties from millionaires while continuing to woo their money, they claim. Stéphan Huot claims to have informed Robert Giroux of the extent of his problems in early 2022.
“I was afraid: If we don’t do anything, we’ll hit the wall,” he explained, referring to rising interest rates and the cost of building materials.
Money “diverted”
Still, Huot could have borrowed about $75 million from Giroux companies between March and December 2022, sometimes at a “usurious interest rate of 60%.” Some of that money would have been used to pay the 12% interest paid to the millionaires. , in addition to the management and administration fees charged by Giroux, acknowledges Mr. Huot.
The millionaires criticize that Mr. Giroux did not adequately follow up on the amounts paid to Huot. The latter “in no way suspected that the money had been embezzled and used to pay a false return.” […] or to gladly compensate the Giroux Group,” they argue in an amended version of their lawsuit.
Robert Giroux Photo provided by Voyou – Creative Achievement
Possible solutions
Stéphan Huot would have tried to find solutions to his problems. He said he had sought new financing to escape the “clump” of funds managed by Robert Giroux, which were “too expensive.” Vain.
He reportedly delayed paying suppliers in the summer of 2022 due to a lack of cash. In October 2022, the situation was such that he feared he would not be able to “make it through” the holidays.
The millionaires were not informed of the Huot Group’s difficulties until December 2022, at an annual meeting with Robert Giroux. However, the latter would have been reassuring given the situation. But on February 1, 2023, Huot would not have been able to pay the interest to the millionaires. And two weeks later, the corporate debacle made headlines.
Since then, there has been practically nothing left of the conglomerate, which was once active in the areas of construction, real estate, catering, warehousing and flight instruction, among other things.
$150 million lawsuit heard in January
The $150 million civil lawsuit brought by Quebec millionaires against Robert Giroux will be heard in January 2024. Five days of trial are scheduled for this case.
The millionaires accuse Giroux and his companies of using their money “to provide false returns to other lenders,” which they say amounts to a Ponzi scheme.
In a new version of their lawsuit filed in court last week, they identified various loans that Robert Giroux’s companies would have made to Stéphan Huot in 2022, but which would ultimately have been used to finance the interests of lenders.
Robert Giroux denies allegations related to the alleged Ponzi scheme. He claims that he only found out about the Huot Group’s bankruptcy in December 2022. No criminal proceedings will be initiated against him.
Pending trial, Robert Giroux agreed not to sell his real estate and to notify plaintiffs if he were to sell assets over $25,000.
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