Sex, money at center of legal fight between Midwest power couples

Above: Tomisue and Stephen Hilbert/File photo

HAMILTON COUNTY – Money and sex are at the center of a lawsuit involving two Midwest power couples.

The lawsuit was filed in Hamilton County in May by Tomisue Hilbert, wife of Carmel businessman Stephen Hilbert, against John Menard Jr., the billionaire owner of the Menards chain of hardware stores.

In the suit, Hilbert accuses Menard of trying to convince her to engage in sex acts with him and his wife with failure to do so resulting in “severe financial consequences,” according to court documents.

In the lawsuit, Hilbert said Menard “touched Mrs. Hilbert and demanded both directly and indirectly, that (she) engage in sexual activities with (Menard) and his spouse.” The lawsuit alleges that the unwanted advances happened between May 2011 and August 2011. When Menard’s attempts were rebuffed, Hilbert said Menard refused to “honor prior contractual agreements” that devastated Hilbert and her financial interests.

The Hilberts and Menard have a relationship that dates back to the 1990s, when Stephen Hilbert, then CEO for Conseco, worked with Menard to sponsor an Indianapolis 500 racing team.

According to court documents, the advances began during a Memorial Day weekend trip in 2011, when Menard and his wife went to visit the Hilberts in St. Martin. During that holiday, Hilbert said Menard seemed to “snap,” intimating that he “no longer liked working, was tired of pleasing his customers and wanted to live his life fully and fulfill his sexual urges.”

On May 30, 2011, Menard “demanded that Mrs. Hilbert join both him and his wife for sex” after Hilbert’s husband had gone to bed, court documents said. According to the lawsuit, Menard said “if she refused there would be serious financial consequences.”

Hilbert said she refused and told her husband what happened. Stephen Hilbert believed that Menard’s “judgment was impaired because of alcohol” and would forget what happened.

The next day, Stephen Hilbert told Menard he was heading on a business trip to China in June. According to the lawsuit, when Menard asked Tomisue Hilbert what she was doing at that time, she said she was moving their son to St. Paul, Minn. Menard said that was not far from where he lived in Eau Claire, Wis., and suggested that she should visit him. According to the suit, he told her that if he “did not get sexually what I want, there will be financial consequences” and that “no one tells me no.”

When June rolled around, Hilbert helped move her son to St. Paul. She said Menard’s wife reminded her that they were expecting Hilbert’s presence in Eau Claire so they could “carry over from St. Martin.” Hilbert expressed doubts that she would be able to visit because she was busy with the move. Instead of going to Eau Claire to visit the couple, Hilbert returned to Indianapolis.

In August 2011, Hilbert said the fallout from her refusal to acquiesce to Menard’s demands began. It included the refusal of Menard’s company, Merchant Capital, to make its required capital contribution to a fund managed by Stephen Hilbert. Menard said an “independent valuation” determined that the Equity Fund portfolio was worth less than expected, and declined to pay the management fees.

In March 2012, Menard filed a lawsuit to dissolve an equity fund managed by Hilbert. After that lawsuit was filed, Hilbert asked for an explanation, noting that they’d been friends for two decades. Menard responded in a “tirade of insults, expletives and threats,” the lawsuit claims, before telling Hilbert he was “going to crush him.”

The lawsuit said Menard went on a campaign to devalue and hurt the Hilberts’ investments. Hilbert seeks “substantial compensatory and punitive damages.”

Menard filed a lawsuit of his own against Stephen Hilbert and his partners, accusing them of mismanaging some $400 million in investments.

An attorney for Menard categorically denied the allegations.

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