Legal Issues and Trial and Attorneys and Lawsuits and Breach of contract and Courts and U.S. District Court and Law

Hilbert says Menard has 'picked on the wrong people'

November 13, 2013

Both in and out of court Wednesday afternoon, Steve Hilbert was calm but defiant about the allegations made by hardware store owner John Menard against him, describing them as “totally personal” and a “vendetta.”

The 67-year-old businessman said Menard, the founder of the Menard Inc. chain of hardware stores, has a history of breaking contracts and being abusive toward women—but usually against people without the resources to fight back.

“This time he picked on the wrong people,” Hilbert said outside the federal courthouse downtown.

He had just given testimony inside the courthouse a trial over a scotched deal to market skin care products struck by New Sunshine LLC, an Indianapolis-based company Hilbert had led until February, and Melania Trump, the former model who is now wife of real estate investor Donald Trump.

Hilbert, the former CEO of New Sunshine, is friends with the Trumps, a fact attorneys for Menard have stressed as a possible motivation for Hilbert to sign what they consider a one-sided deal that favored Melania Trump at the expense of New Sunshine.

In spite of his defiance, Hilbert admitted in court that he even turned to Donald Trump to help him financially because a series of lawsuits filed between Menard and Hilbert has put Hilbert in a "horrendous position. Trump agreed in late summer to purchase Hilbert's vacation home in St. Martin, which had a list price of $19.7 million and had been on the market for 4 1/2 years.

"We had to sell it," Hilbert said Wednesday of the St. Martin home. "So I went to Donald and he agreed to buy it."

Attorneys for Menard also sought to show that Hilbert directed New Sunshine to sign an endorsement deal with Trump, although he already knew that Menard had ousted him from his position leading the company. Therefore, they argued, the deal is invalid.

New Sunshine is one of several companies purchased by MH Private Equity, a private equity fund financed by Menard and managed by Hilbert. But Menard sought to remove Hilbert as the fund’s manager in June 2012, stating that the companies’ financial performance was poor.

Hilbert said he received a letter in June 2012 from Menard Inc.’s attorney stating that he had been removed as manager of MH Private Equity. However, Hilbert said, he knew Menard had no such authority under the operating agreement the two men signed in 2005 to create the fund.

“I got a bullsh-- letter from Menard,” Steve Hilbert said he told his wife, Tomisue Hilbert, at the time. Steve Hilbert told no one else about the letter until Menard’s companies sued Hilbert in November 2012 to seek his removal.

Hilbert said that executives running New Sunshine at the time knew nothing of Menard’s attempts to remove Hilbert from control of the company—until after those executives had already signed the endorsement agreement with Trump.

Scott Matthews, who was general counsel of New Sunshine until March 1, 2013, testified Wednesday morning that Steve Hilbert only ever said one thing to him about his dispute with John Menard.

“He said he was in a world-class pissing match with John,” Matthews testified. Menard finally did win a court order in February, which removed Hilbert as manager of MH Private Equity and the companies it owns.

Attorneys for Menard also maintain that the deal with Trump is invalid because it is grossly one-sided in favor of Trump, and also was improperly advantageous to Hilbert.

The deal allowed Steve and Tomisue Hilbert to receive $50,000 per year in free skin care products that were part of the product line that would have Melania Trump’s first name on it.
 

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