Hartman Group Slams Silver Star Properties (SLVS) Leadership for Concealment, Asset Conversion, and Reckless Debt Strategy
Summary
Demand for Immediate Resignation: Your Conduct Exhibits Badges of Fraud
September 4, 2025
Dear Mr. Haddock, Mr. Tompkins, and Mr. Still,
The foreclosure notices on three major properties totaling $57.8 million in defaulted debt prove what we've been warning about for months: your poor performance and poor management have destroyed shareholder value, and it's time for your immediate resignation.
Your Conduct Exhibits Badges of Fraud
Badges of fraud are indicated by circumstantial clues, actions, or behaviors that suggest fraudulent intent in transactions. These indicators—secrecy, lack of consideration, debtors retaining control of assets—don't prove fraud individually but collectively may show intent to deceive creditors and evade legal obligations. We believe your conduct exhibits every classic badge:
- Deliberate Concealment of Material Information
You have ignored multiple books and records requests, we believe because you cannot explain your mismanagement. Under Maryland law, shareholders have an absolute right to this information. We believe your systematic refusal indicates you're hiding catastrophic losses and misuse of shareholder funds. This would be fraudulent concealment.
- Fraudulent Asset Conversion
The legacy assets were free and clear but are now pledged as collateral for loans in default. You converted unencumbered shareholder assets into loan collateral without proper disclosure to fund your failed experiments. This is bad business and may represent fraudulent conveyance of shareholder property.
- Reckless Over-Leveraging Despite Warnings
As we stated 8+ months ago, the balance sheet was over-leveraged—now we see the consequences of your ignoring those warnings. Instead of paying down debt and managing properties to create value, you:
· Pivoted to an unapproved alternative strategy
· Over-leveraged the company with expensive debt (19.33% junior debt)
· Fire-sold properties to fund speculative investments
· Created the exact insolvency crisis we predicted
You've Hidden the True Value from Shareholders
Due to your secrecy and stonewalling of legal books and records requests, and continued lack of adequate disclosure, shareholders cannot determine where their value stands and now, we know why. You've concealed:
· How proceeds from millions in asset sales were misused
· The true extent of property deterioration under your management
· Actual debt obligations and maturity schedules
· The real financial condition of remaining assets
Your foreclosure notices reveal you've been hiding material defaults while making false promises to shareholders about "increased value."
Why You Must Resign Immediately
Your badges of fraud create overwhelming evidence of breach of fiduciary duty.
· Asset Conversion: Converting free-and-clear assets to loan collateral without disclosure
· Self-Dealing: Excessive compensation while properties face foreclosure
· Concealment: Violating Maryland law by refusing books and records requests
Continuing in your positions exposes you to escalating personal liability while guaranteeing continued destruction of remaining shareholder value.
The long overdue October 6th shareholder meeting will finally give shareholders the opportunity to remove you, but we call for you to resign now. Your poor performance and poor management constitute fraud. Your badges of fraud, concealment, asset conversion, self-dealing during insolvency, create overwhelming evidence of fraudulent intent.
Resign now and allow competent management to save what remains of Silver Star Properties. Your continued leadership means continued destruction of shareholder value through proven fraudulent mismanagement.
Sincerely,
Al Hartman
The Hartman Shareholder Alliance
Source:
https://www.sec.gov/Archives/edgar/data/831616/000110465925087798/tm2525419d1_dfan14a.htm
Member discussion