$150 million lawsuit on the sidelines of the Huot Group debacle: Millionaires “fell off their chairs” when they learned of the group’s setbacks

Investors who accuse Robert Giraud of dragging them into the Stephane Hout disaster blame the businessman for concealing the problems and extent of the collapsing empire.

A $150 million civil trial for 75 millionaires against Robert Giraud, who convinced them to invest in Huot Group, opened in a Quebec court on Monday.

The first witnesses quickly explained to Judge Jocelyn Geoffroy that they seemed to have no idea the fall was looming.

“I fell out of my chair,” Denis St. Cyr testified about the moment he learned that Stephane Hout had defaulted on payments at certain times and that his investments had been used to pay interest on other debts.

In the lawsuit, plaintiffs accused Giroux of leading them into a “Ponzi-like” scheme.

“It goes against what we've been told. […] “The data was that everything was swimming in oil, and things were going well,” the businessman explained, adding that during this time, Robert Giroux would continue to “pay the expenses for himself.”

“If I had to do it over again, I wouldn't put a penny into it. Huot had already been losing $1 million a month for six years and we kept investing money in it.” – Denis St. Cyr, civil engineer and real estate investor

$200 million in Groupe Huot

It seems that the picture that Robert Giroux painted for investors before they put their money into the Q-12 and FIISH mutual funds was far from reality.

Strong collateral, security, attractive returns and above all diversification; Giroux's sales presentations convinced investors. However, the hundreds of millions raised were mainly used for the projects of one borrower: Stephane Huot.

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Stefan Huot

Photo by Stevens LeBlanc

“He told me it was very diverse, but I later realized we probably didn't understand it in the same way,” said Paul Tardif, president of Aeterna Financial Group, which invested $2.6 million of client money in the venture. “87% of the fund was with Mr. Hott.”

To be sure, the amount represents a small percentage of the group's total assets, $1.8 billion, but Mr. Tardif would have done without such harassment. “We didn't need these problems, someone we didn't trust and the risks he presented to our customers.”

Especially since even if several loans were provided for several projects, the losses “were distributed among all the sponsors,” as the first two witnesses explained.

“Mr. Jiro said to me many times, dozens of times: ‘One for all, all for one.’”

Paul Tardif, Chairman of Eterna Financial Group, testified on May 27, 2024 as part of a $150 million civil trial between Robert Giroux and a group of millionaires whom he persuaded to invest large sums in Huot Group projects.

Image taken from Eterna Financial Group website

“like never before”

Investors also accuse Robert Gero of a lack of accuracy in monitoring their investments.

The first two witnesses in particular referred to the use of “one-off payments” on loans used in real estate projects, for example an aircraft hangar in Saint-Hubert.

“[C’était] Payments made blindly. […] “I have never seen that in my entire life,” Paul Tardif confirmed.

“When you have a $200 million loan to a single borrower who has liquidity problems, [Robert Giroux] He should have been next to Huot while he signed the checks. It could have been a close follow-up.

Ariella, a project of Haute Group

Photo by Vincent Debians

Long trial

The trial is scheduled to last for six weeks during the spring and fall. Dozens of witnesses should be heard in this case over which the shadow of the nearly 1.2 billion bankruptcy of Stefan Hout's empire looms.

Refuting the plaintiffs' claims, Robert Giroux filed a $25 million countersuit.

The conflict between Robert Giroux and the “millionaires”

• 75 Quebec businessmen were recruited to invest $200 million in Groupe Huot projects, accusing Robert Giraud of a lack of transparency in the process.
• After the Stephane Hoot debacle, the group sued Robert Giroux for $150 million in July 2023, alleging a “ruse” that allowed him to enrich himself as if it were an “ATM”.
• The businessman responded in October by suing the investor group in order to clear his reputation. He asks them for $25 million and blames his defense on Stefan Hout.
• The six-week trial that began Monday in Quebec will help resolve those questions.