Hartman Fires Back at Silver Star Board
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., is firing back at his fellow board members who fired him as CEO and president and is working to have him expelled as a director of the company.
According to a recent release from the Hartman Group, which includes Hartman and several affiliated parties, including his wife and daughter, Silver Star is seeking stockholder consent to re-elect three incumbent directors to the board of directors and thereafter reduce the number of directors from four to three, effectively removing Hartman from the board.
The Hartman Group encouraged Silver Star shareholders to not vote in Silver Star’s consent solicitation for several reasons, including accusations that “Silver Star’s rogue board of directors” ignored Hartman’s requests for liquidation, as mandated by Silver Star’s charter. The Hartman Group also claimed that Silver Star is attempting to block shareholders from having a say in the company’s future and is putting shareholder capital at risk with the company’s plans to reposition itself as a self-storage company.
Hartman and his affiliates also state that they own 13.2% of the company’s common stock, making them the largest shareholder, while the remaining directors collectively own less than 0.25% of outstanding shares.
This announcement and filing are just the latest in a contentious series of actions taken by both the Hartman Group and Silver Star.
The Hartman Group previously initiated legal proceedings against Silver Star and its board of directors alleging, among other charges, that the board breached Maryland law by not holding an annual stockholder meeting. As reported recently by The DI Wire, Silver Star responded with its own lawsuit accusing Hartman and related parties of several acts of mismanagement, fraud, and breaches of fiduciary duty.
Overall, 2023 has been a turbulent year for Silver Star.
In March, Hartman was removed as executive chairman of the company. In May, the company announced that their newly appointed CEO, Mark Torok, resigned. Then, in August, the company hired Steve Treadwell as the new CEO, only to have him resign just two months later. Silver Star then filed a petition for Chapter 11 bankruptcy protection in September, citing approximately $217 million in outstanding debt.
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