Hartman Doubles Down on Allegations Against Silver Star in Video
Allen Hartman, former CEO of Silver Star Properties REIT, a publicly registered non-traded real estate investment trust formerly known as Hartman Short Term Income Properties XX Inc., continued his offensive against his former company recently with the release of a shareholder address video.
In the video, Hartman begins by claiming how the REIT regularly paid investors a 6.5% annual dividend and earned the best track record for annualized five-year returns, out of 30 nontraded REITs. Hartman goes on to state that “this is attributable to my success in managing a commercial portfolio, acquiring assets low, increasing revenues, and minimizing expenses.” Hartman also claimed that, in 2022, he proposed taking 30 of the REIT’s 44 properties to market for disposition, which would ultimately decrease Silver Star’s debt and allow for a liquidation process that would create the maximum value for shareholders.
Hartman also doubled down on his previous allegations against the REIT. He claimed, once again, that Silver Star’s board of directors is “ignoring Silver Star’s charter” and illegally changing Silver Star’s bylaws by denying shareholders’ calls for liquidity and a shareholder meeting, respectively. He also stated that the board is putting shareholders’ “hard-earned money at risk” by pivoting to self storage. Hartman cited the recent resignations of two CEOs, Mark Torok and Steven Treadwell, as evidence. Further, he accused the current Silver Star board of paying themselves performance bonuses at shareholder expense.
Hartman also mentioned other concerns in his video, including a drop in Silver Star occupancy, the loss of the company’s auditor, and the alleged failure of Silver Star CEO Gerald Haddock while at other businesses.
Additionally, Hartman responded to Silver Star’s allegations of his character. According to Hartman, he did not oppose refinancing the company. He also reported that both tenant and employee retention were much higher than the current board’s. Finally, he reiterated that he never took a salary during his 20 years as CEO for Silver Star, but if he had, “it would have amounted to $10,000,000 over the last 20 years.”
Hartman concluded the video by stating that he “will continue to work for the best interests of all shareholders…”
As previously reported by The DI Wire, Silver Star has accused Hartman of several acts of mismanagement, including “heresy” in regards to board elections, claiming that Hartman had not permitted nor initiated any board elections since 2013, as well as blaming him for the company’s Chapter 11 bankruptcy.
It seems likely that Silver Star may respond to Hartman’s video, as the ongoing battle between the two sides has been going on for nearly a year. In March 2023, Silver Star removed Hartman as executive chairman. The Hartman Group initiated legal proceedings against the company shortly thereafter, and Silver Star responded with a lawsuit of its own.
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