Silver Star REIT Calls Former CEO’s Statements “Slanderous”

Posted by MSM on Feb 1, 2025 10:32:05 AM

In December 2023, Silver Star Properties REIT Inc., a publicly registered, non-traded self-storage real estate investment trust led by co-CEO Gerald Haddock, sued founder Allen Hartman, accusing him of fraud, self-dealing and manipulation amounting to more than $50 million in damages, plus interest. Hartman had served as CEO until March 2023, when the rest of the Board of Directors removed him from the position.

 

In response to the lawsuit, Hartman released a video and spoke with media outlet The Real Deal about the accusations. “I would never damage a company that I am a 15 percent owner in,” said Hartman. He also didn’t mince words when speaking about Haddock. “He’s evil…The guy’s a madman. What else do you call someone who lies about me using the firm as a personal piggy bank? Haddock is doing everything he can to destroy me.”

 

Haddock disputed Hartman’s statements, saying that Silver Star had done everything by the book. “I feel sorry for him,” he said. “He is doing nothing with these types of statements but continuing to be vindictive. Bless his heart.”

 

The court eventually ruled in Silver Star’s favor, but Hartman wasn’t done, sending an email to shareholders on January 17 that, according to Silver Star’s Executive Committee, was “one in a long communication campaign to spread false information and misstatements to undermine the Executive Committee of Silver Star Properties REIT.”

 

Silver Star then posted the Maryland Court’s written memorandum, going on to say “[the court] states what we have asserted all along, that Al Hartman was not fit to serve as CEO and Executive Chairman of Silver Star Properties REIT and was removed to protect the shareholders. The opinion sites [sic] the Plaintiff, Al Hartman, as not being credible no less than five times and draws references to him admitting to making misstatements to the court as a part of his depositions. It also clearly details how the Plaintiff filing an improper lis pendens caused Silver Star to incur “substantial cost as a result.””

 

Memorandum Opinion on Claims 1-3 and 5 | Memorandum Opinion – Highlights

 

Hartman made additional claims on January 27 regarding compensation and company stock shares following his removal as executive chairman by the company’s board of directors. Silver Star has responded again, stating the claims are “reckless” and “factually dishonest.” The REIT then urged its shareholders to disregard Hartman’s communications and instead rely on official updates from the company. 

 

Silver Star released the following statement:

 

First and foremost, we want to address the gross misrepresentation of the recent court decision that Mr. Hartman included in his correspondence. Contrary to his assertions, the court’s opinion does not vindicate his claims, nor does it support the inflammatory accusations he has made. The court not only found in Silver Star’s favor, in the Memorandum Order there are no less than five instances where Al Hartman’s credibility is raised. One stated explicitly, ‘The Court found Plaintiff to have general credibility issues stemming from instances in which Plaintiff had been shown to be dishonest.’

 

Moreover, Mr. Hartman’s communication included slanderous statements about the company and its executive committee. These comments are not only unfounded but are also a direct attempt to undermine the integrity of the current leadership and the work we are doing to ensure the company’s success. Such actions are unbecoming of someone who once held a leadership position in this organization and in all probability sold your current shares to you.

 

We want to reassure you that the executive committee and leadership team remain steadfast in their commitment to transparency, accountability and the best interests of the company. While we regret the need to address these distractions, we will not allow, at this time, slanderous falsehoods to go unchallenged.