Hartman Group Calls for Board Overhaul at Silver Star (SLVP), Citing 70% Value Erosion, Mismanagement, and Urgent Need for Liquidation
Summary
In the April 15, 2025 letter, Al Hartman urged Silver Star shareholders to vote for the replacement of the board, citing six key reasons. He emphasized that a Maryland court ruled in their favor, requiring a shareholder vote on liquidation by July 21. Hartman blamed CEO Gerald Haddock for a 70% drop in company value due to fire-sale property disposals and a collapse in occupancy following the firing of key staff. He criticized Haddock for awarding himself 1 million shares and potentially 2 million more. Hartman promised to liquidate key assets like Walgreens and mini storage properties promptly if elected, and begin capital returns in 2025.
On April 15, 2025, the Hartman Group distributed the following letter to shareholders:
Top 6 Reasons to Vote for the Replacement of the Board
There are a lot of emails being sent by Silver Star that are confusing and misleading as Gerald Haddock tries to put a positive spin on his mismanagement. To cut through the noise, below are six truths that make the whole process very clear.
- We won the lawsuit in Maryland state court in November. The judge ruled that Silver Star must have a shareholder meeting before July 21st, to vote on the liquidation of the company.
- The value of the company has dropped 70% under Haddock’s leadership. He sold over 25 properties in a little over a year, mostly in 2024, at fire sale prices that were as low as 27% of what they had them in the books for at the time.
- Occupancy dropped like a rock under Haddock’s management. He fired all the leasing agents and property managers and the marketing people, so it is not surprising that the occupancy dropped so dramatically. Since Silver Star is very opaque and delinquent in their SEC-required disclosures, we can’t tell you the exact occupancy numbers but I can give you some typical examples. They lost 6 floors of Galan Nursing at the OTC property, and they then turned around and hired the same broker that pulled the tenant out of the building to re-lease the space she had just vacated. Another example is Gulf Interstate that went from about 90% occupancy to about 20% occupancy when the Anchor tenant moved out.
- Last week Haddock awarded himself 1 million shares of stock. His employment agreement calls for him to be awarded another 2 million shares of stock, under certain circumstances. This totals almost 5% of the company and about $6 million dollars in value. Fortunately, dilution of your interests through the award of additional shares to Haddock can be prevented by removing him from the board and terminating his employment agreement.
- When we take over the company, our plan for liquidation will be to put the Walgreens and mini storage properties on the market immediately and start returning capital to you this year. The legacy assets that remain will be leased up and sold in an orderly fashion.
- You will soon be getting a proxy card from Silver Star that will ask you to vote for a replacement board of directors so that we can remove the board and stop the methodical destruction of the company.
Thank you very much for your support. I appreciate each and every one of you. God bless you. Happy Easter! God will deliver the victory!
Sincerely,
Al Hartman
Source:
https://www.sec.gov/Archives/edgar/data/831616/000110465925035391/tm2512470d1_dfan14a.htm
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