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Lawsuit Alleges Hardware Billionaire John Menard Pressured Former Business Partner's Wife For Sex

This article is more than 10 years old.

Billionaire hardware mogul John Menard, Jr. and Indiana insurance exec Stephen Hilbert were friends for two decades and business partners for one. They shared vacations in St. Martin and trackside seats at NASCAR races. But that friendship soured a couple years back, and Menard has lately been papering Hilbert with lawsuits, accusing him of mismanaging the private equity firm they founded together.

Now, an even more recent lawsuit alleges that the real reason for all of Menard's legal actions is far more tawdry: a vendetta after Hilbert's wife Tomisue (pronounced "Tommy Sue") refused to join Menard and his own wife, Fay, as the third party in a ménage-a-trois.

Menard, through his attorney, denies all charges.

Menard and Stephen Hilbert initially met through their shared love of racing; Hilbert's company, Conseco, provided $10 million in sponsorship to Menard’s racing team. The racing-based friendship first moved into a business relationship in 2002, when Menard invested in Haverstick Consulting, a company Hilbert was running. In 2005 Menard and the Hilberts created MH Equity Private Equity, essentially becoming business partners. Menard had an 80% stake, the Hilberts 20%. Tomisue was the fund's managing member, Stephen its president and CEO, and as such the Hilberts were entitled to management fees of a minimum of $3 million per year.

The Hilberts also hosted Menard (as well as former girlfriend Debra Sands and Fay Obiad, now Menard's spouse) at Donald Trump’s Mar-a-Lago estate in West Palm Beach and at the Hilberts' home in St. Martin. On these trips, Menard, who owns one of the biggest private companies in America and has a net worth of $7 billion as of our latest FORBES estimate, rarely carried cash and his credit cards were often declined, the lawsuit alleges. The Hilberts often ended up footing expenses for Menard and his guests.

It was during one St. Martin stay over Memorial Day weekend 2011 that, Tomisue alleges, things first became uncomfortable for her. The hardware billionaire allegedly told Tomisue that he no longer liked working, that he was tired of pleasing his customers, and that he wanted to live his life fully and fulfill his sexual urges, the lawsuit states. She claims he touched her body without her consent. He also suggested she have sex with Menard and his wife after her husband went to bed, she alleges.

Over a period of months, Menard continued to press, telling Tomisue that she should visit him in Eau Claire while her husband was away, reminding her that if he “did not get sexually what I want, there will be financial consequences,” according to the lawsuit. “No one tells me no,” Menard also said, the lawsuit states.

Menard's  attorney, Kevin Tyra, portrays Tomisue's lawsuit as an attempt to get back at him for removing her husband from managing MH Equity Private Equity. Stephen Hilbert managed the fund until February 2013, when Menard succeeded in convincing a Wisconsin court to oust Hilbert and turn the fund over to Menard.

"Ms. Hilbert and her husband betrayed Mr. Menard's trust," Menard said through his attorney. "They mismanaged the assets and resources entrusted to them, and incurred wildly inappropriate expenditures. It is because the Hilberts were such poor stewards of what was entrusted to them that a court had to remove them from positions of responsibility, as acknowledged in para. 93 of Ms. Hilbert's Complaint."

Once Menard controlled MH Equity, he began ransacking its portfolio companies, the lawsuit alleges. He cut off a licensing deal with Melania Trump, Donald Trump's wife, who had agreed to lend her name to beauty products owned by the private equity fund. Melania, who appeared on television promoting the product line, which was supposed to be sold in Lord & Taylor stores, filed a $50 million claim for damages against Menard.

Menard also fired employees at the portfolio companies, including Lisa Trudeau, a friend of Tomisue's. Trudeau also claims that Menard tried to get her to have sex with him and Fay. Menard, through his attorney, has denied this. Menard has sued Trudeau, a single mother of four children, according to Tomisue's lawsuit, for $1.5 million in damages (underlying this damages claim, Menard spells out more than $200,000 Trudeau allegedly spent as part of business expenses while working for the portfolio company).

"As you can well imagine, no one wants to publicly come out with things that have happened of this nature," says Linda Pence,  Tomisue Hilbert's attorney. "But the arrogant way in which normal, good people have been treated cannot go unnoticed and cannot go unchallenged."