Silver Star Properties (SLVS) Targeted by Hartman Group Over Governance Failures, Board Liability, and Self-Dealing Stock Awards

Summary

Personal Liability Warning—Are You Aware of Your Legal Exposure?

August 20, 2025

Dear Mr. Tompkins and Mr. Still,

I am writing to ensure you are fully aware of the potential serious personal legal exposure you face as sitting board members. The class action lawsuit filed against you reveals governance violations so fundamental that they threaten not only the company but your personal financial well-being.

I must ask if you fully understand the liability you have created for yourselves through these actions?

Gentlemen, the pending class action lawsuit in Harris County doesn't just challenge business decisions, but it exposes fundamental violations of corporate law that create serious personal consequences for you individually.

Do you realize that these allegations, if proven, could result in personal financial liability that may extend far beyond any insurance coverage?

Critical Governance Failures Exposed by Class Action Litigation

The pending class action lawsuit reveals a pattern of serious governance violations that create significant personal liability exposure for directors:

1. Violation of Corporate Bylaws — The board's refusal to call mandatory annual shareholder meetings for multiple consecutive years constitutes a direct violation of the company's governing documents and shareholders' fundamental rights.
2. Breach of Corporate Charter — The board has violated SSP's charter by failing to liquidate the company within the required 10-year timeframe, exposing directors to claims they exceeded their corporate authority.
3. Improper Bylaw Amendments — The board's amendment of Article 11, Section 2 of the company bylaws attempting to circumvent annual meeting requirements violates the corporate charter and constitutes an abuse of directorial power.
4. Unauthorized Consent Solicitations — Individual defendants' consent solicitation activities constitute a breach of fiduciary duty, as they appear designed to entrench management rather than serve shareholder interests.
5. Waste of Corporate Assets Through Excessive Compensation — Directors breached their fiduciary duties by awarding themselves excessive compensation while the company's assets deteriorated and shareholder value declined.
6. Self-Dealing Stock Awards — The board engaged in self-dealing by awarding themselves over 1 million shares each, and Haddock taking more than 3 million for himself. These massive self-dealing transactions diluted existing shareholders without proper justification or independent oversight.
7. Dilution Without Authorization — The million-share awards to directors represent unauthorized dilution that may trigger securities law violations and personal liability for each recipient director.

The Personal Liability You Face Is Real and Immediate

Mr. Tompkins and Mr. Still, as sitting board members named in this class action, you face potential personal exposure that includes:

· Personal repayment of the million+ shares each of you awarded yourselves and compensation — These unauthorized stock grants constitute self-dealing that can be clawed back with interest along with returning all compensation received during the period of wrongdoing

· Monetary damages for breach of fiduciary duty — Your personal assets are at risk for the harm caused to shareholders

· Attorney fees and costs — In class actions, prevailing shareholders may be able to recover their legal expenses from you personally

· Securities law penalties — Unauthorized stock issuances can trigger federal and state securities violations

Are you prepared for the financial consequences if shareholders prevail in this lawsuit?

You Still Have Options—But Time Is Running Out

Gentlemen, I am sharing this analysis with all shareholders because they deserve to know the risks their board has created. However, you still have the opportunity to minimize your personal exposure:

1. Reverse the unauthorized stock awards immediately — Returning the million+ shares you awarded yourselves could demonstrate recognition of wrongdoing and limit disgorgement claims.
2. Step aside voluntarily — Allow new leadership to clean up these governance failures before your personal liability crystallizes further.

Will you act now to limit your exposure, or will you continue down a path that virtually guarantees personal financial consequences?

Sincerely,

Al Hartman
The Hartman Shareholder Alliance

Source:

https://www.sec.gov/Archives/edgar/data/831616/000110465925081961/tm2524221d1_dfan14a.htm