"Huot Group Financial Woes: Update on Millenum Construction and Transrapide Distribution Center"

2023-04-26 19:30:00

The tiles are piling up on the head of Quebec real estate developer Stéphan Huot as one of his companies owes more than $850,000 to Revenu Québec and another risks partly escaping him under the Bankruptcy Act .

• Read also: The AMF examines the Huot Group case

The situation is getting worse for the Huot Group, whose financial difficulties have been making headlines since mid-February. Millenum Construction and the Transrapide Distribution Center, two companies belonging to the real estate giant, are now in hot water, our Bureau of Investigation has learned.

On April 19, the Superior Court ordered Millenum Construction to pay the sum of $852,303.65 to the Quebec Revenue Agency, under tax laws.

According to this judgment, Millenum Construction would have received notices of assessment totaling more than $2.2 million between October 2021 and March 2023. “The total amount of the debt or, where applicable, the recoverable part [ …] stands at $852,303.65,” the document states.

The court gets involved

A Lévis company that is claiming more than $7 million from the Huot Group has applied to the courts to have Transrapide take control of certain buildings.

The company Finar Bâtiments d’acier filed in the last few days an emergency procedure at the Quebec courthouse to compel Transrapide to cede control of commercial warehouses on the South Shore of Quebec to an insolvency trustee.

Finar alleges that Transrapide buildings under construction where she worked are currently exposed to bad weather and that there is no one looking after them.

“The applicant requests to exercise its rights immediately and, to this end, that a receiver be appointed, otherwise it is to be feared that the recovery of its debt will be jeopardized and that the projects will wither away”, alleges the company in a motion dated April 18.

Located in Lévis, the Transrapide distribution center was to be equipped by the end of summer 2023 with a dozen buildings, built in different phases, serving as warehouses for various commercial and industrial tenants. Finar has been contracted to carry out work on phases 7.8 and 10.

Suspended works

But in February, the real estate developer’s financial difficulties forced the suspension of construction projects, including those of Transrapide. And Finar, which has registered legal hypothecs, estimates that it has a claim of $7.29 million. Since then, she would not have obtained any recent follow-up from Transrapide.

“No date for the resumption of projects is […] confirmed or clearly established. However, the projects are not finished and considerable work must be carried out”, she underlines.

A lender objects

Q-12 Capital SEC, a loan company linked to Quebec businessman Robert Giroux, is however contesting Finar’s request and has asked to be allowed to intervene.

Robert Giroux is the land surveyor who, through his companies, is said to have led some 75 millionaires from Quebec to invest colossal sums in the Huot Group at an interest rate of up to 12%.

The case is due back in court in May.

The Huot Group debacle

February 23 : Referring to financial difficulties linked to inflation and rising interest rates, the Huot Group is putting the majority of its construction sites on hold.
9 mars : The Complexe Capitale Hélicoptère, which belongs to the Huot Group, is ending the holding of event activities.

15 mars : Workers at Millenum Construction, a division of Groupe Huot, are temporarily laid off.
5 avril: Stephan Huot is putting his luxurious Quebec residence up for sale for nearly $3.7 million. The developer claimed that this sale is not related to his financial difficulties.
6 avril: Our Bureau of Investigation reveals that at least 75 millionaires from Quebec and about fifteen others from Montreal who have invested colossal sums in the Huot Group fear for their money. The Huot Group would have more than $900 million in active loans on its buildings.
14 avril : After having received several complaints against the Huot Group, the Financial Markets Authority (AMF) confirms that it is carrying out “verifications” in this file.
18 avril: The Huot Group could well lose control of part of its Transrapide business, after a petition filed by one of its creditors.
19 avril : Millenium Construction, a subsidiary of Groupe Huot, is ordered to pay more than $850,000 to Revenu Québec.
As of April 20:
No less than 334 legal hypothecs totaling $108.5 million have been registered on buildings of the Huot Group and its subsidiaries, according to data from the firm Terram Technologies.