Billionaire John Menard is intensely private and unbelievably tightfisted.
So if you believe his version of events in the soap-opera-like legal brawl with Steve and Tomisue Hilbert, the Hilberts have unleashed a double-whammy. First, they burned through hundreds of millions of dollars of his fortune, then personally embarrassed him with a lawsuit accusing him of sexual extortion.
IBJ broke the story in March that the billionaire hardware king had ousted Steve Hilbert as CEO of his MH Private Equity funds. Menard, 73, secured a court order removing Hilbert from the Indianapolis-based funds after accusing him of losing 78 percent of the $495 million Menard invested.
Then, as IBJ was first to report this month, the Hilberts fired back with a lawsuit alleging Menard ditched Steve Hilbert as retribution after Tomisue, 43, spurned his repeated sexual advances. The suit says Menard told Tomisue that “no one tells me no” and that if he “did not get sexually what I want, there will be financial consequences.”
The allegations are baseless, according to his attorneys. But throwing them into the public domain must be a nightmare for Menard, who for decades has doggedly avoided scrutiny of his personal life—even as he built the Eau Claire, Wis.-based Menards chain into the nation’s No. 3 home improvement retailer and built his net worth to an estimated $7 billion.
An example of his penchant for privacy: In 2008, MH attempted to structure an ultimately disastrous investment in the Indianapolis-based casino company Centaur to reduce the likelihood regulators would require a “suitability investigation” of Menard before granting a license, court records show. Such scrutiny, Menard’s attorneys said in a filing, “would be unacceptable.”
Court records cast Menard as just as obsessed with maintaining and growing his fortune.
“He is proud of his financial strength, and he wants only to be associated with ‘winners,’” Debra Sands, then Menard’s fiancée, wrote in an email in 2005, as MH was preparing to launch. “The only [thing] he probably hates more than actually losing money is for others to know he has made a bad investment and is losing money—that really freaks him out.”
Stories about Menard’s tight grip on money are legendary.
Former Indianapolis 500 champion Eddie Cheever told Milwaukee magazine in 2007 that he once spent an hour and a half arguing with Menard, then his race-team owner, over a $25 hotel bill, only to pay it himself.
In the lawsuit accusing Menard of sexual extortion, the Hilberts’ attorneys wrote that for eight years Menard was a frequent visitor at their home on the Caribbean island of St. Martin.
“During their trips,” the attorneys wrote, “Mr. Menard rarely traveled with much cash and carried credit cards (that frequently did not clear or work) despite the fact that he was a multi-billionaire. Mr. Menard expected others to pay his expenses.”
The extent of the investment losses that Menard pins on Steve Hilbert would make even a spendthrift bonkers. MH’s most notorious bet was the $200 million it poured into Centaur, all of which was lost when the company filed for Chapter 11 bankruptcy in 2010.
While the Hilberts contend the value of MH’s investments suffered because of the financial crisis, they said the figure never was as low as Menard alleges and actually was on the upswing.
Menard brought that turnaround to a halt when he ousted Steve Hilbert as retribution for Tomisue’s rejecting him, according to the lawsuit. He declared he would “crush” Hilbert, 67, and set out to further deteriorate the value of MH’s investments so the couple’s “interest in the companies will be totally extinguished,” the suit charges.
The Hilberts’ attorneys charge Menard has been especially reckless with Australian Gold LLC, an Indianapolis-based tanning products company. He ousted top executives—replacing them with a regional manager for the Menards chain—and scuttled a breakthrough deal to sell Melania Trump-branded skin-care products through the high-end Lord & Taylor department-store chain.
If you believe the Hilberts, Menard is so hellbent on harming them any way he can that he is willing to suffer financially to do so. Given his long history of building and hoarding wealth, that might be the most surprising twist of all in this strange saga.•