Silver Star, Hartman Feud Continues as Shareholder Vote Pushed to August

In the latest escalation of the long-running feud between Silver Star Properties REIT, a publicly registered non-traded real estate investment trust formerly known as Hartman Short Term Income Properties XX Inc., and its former chief executive officer, Allen R. Hartman, both sides have continued to trade public accusations over leadership and financial performance as the court-ordered stockholder meeting has once again been pushed back.

Silver Star has painted Hartman as a “failed former CEO” whose mismanagement led to asset devaluation and a significant drop in the REIT’s net asset value. According to the company, net asset value per share fell from $12.08 to $6.25 during Hartman’s tenure between 2021 and 2022, amid allegations of inflated property valuations, unpaid vendor bills, and defaulted loans.

In response, Hartman has accused Silver Star’s current leadership of “financial malpractice,” insider enrichment, and strategic failure. According to Hartman, nearly $400 million in income-generating assets have been sold under the current board without any return to shareholders. Hartman also called out Silver Star’s use of a “poison pill,” a legal tactic used to dilute voting influence by issuing additional shares. In this case, shareholders, with the exception of Hartman and his affiliates, have received two extra shares for their original share, effectively tripling their vote count. Hartman has pledged to honor this split in his own tabulation.

Additionally, Hartman has alleged that Silver Star has engaged in “illegal proxy solicitation” and accused the REIT’s proxy solicitors of illegally calling shareholders to collect proxy votes.

Silver Star has fired back by filing a pair of cease-and-desist letters. The first was issued to Hartman over what the REIT called false and defamatory claims regarding SEC compliance. The second was filed over Hartman’s challenge to the legitimacy of the January 2024 board election, in which Hartman was removed from the board. Though Hartman no longer serves in any capacity at Silver Star, he reportedly remains one of the REIT’s largest stockholders.

The feud between the two sides has been going on since at least March 2023 when Silver Star announced the removal of Hartman as executive chairman. A series of legal actions have followed, initiated by both Hartman and Silver Star.

Silver Star also announced that the court-ordered shareholder vote, which had been originally scheduled for June 30 and later moved to July 7, is now set for Aug. 29 at 10 a.m., CT. The REIT reported that a Maryland court granted its request to extend the meeting deadline, citing shareholder fairness. According to the company, this delay will allow time to finalize and distribute audited financial statements for the years ending Dec. 31, 2023, and 2024.

The meeting will be held virtually and will include a binary vote as ordered by the court. Shareholders must choose between liquidating the company’s assets or continuing with the board’s proposed pivot into the self-storage sector. Shareholders of record as of June 20 are eligible to vote.

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