War of Words Escalates as Shareholder Vote Nears in Silver Star-Hartman Saga
A contentious proxy battle is heating up 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, as both sides prepare for a court-ordered shareholder meeting on June 30, 2025.
In a mixed ruling in April, the Circuit Court for Baltimore, Md., agreed with Hartman in determining that the 10-year trigger date for liquidation occurred in 2023 and that Silver Star had failed to comply with its charter obligation to either list its shares or obtain stockholder approval to defer liquidation by that date.
The court, however, ruled against Hartman on other issues, including Silver Star’s “poison pill” plan, which the court stated was “enacted in good faith.” In the end, the court stopped short of ruling for immediate liquidation and instead ordered the upcoming shareholder meeting, which offers shareholders the choice of either supporting the company’s pivot into self-storage or voting for liquidation.
For his part, Hartman has continued to accuse Silver Star’s current CEO, Gerald Haddock, of mismanagement and “destroying” Silver Star. He cited Silver Star’s recent sale of the Gulf Plaza property, claiming it was sold for $2.6 million, less than 20% of its previously estimated value of $17 million. Hartman asserted that if the Hartman Group were managing the company, the property would have sold for as much as $10 million. Hartman further warned that Silver Star’s leadership is “hereby being put on notice” and “may be held personally liable” for the $7.4 million loss in value.
Silver Star, however, responded, defending the sale and pushing back hard against Hartman’s allegations. According to Silver Star, Gulf Plaza’s poor condition was due to neglect during Hartman’s tenure as CEO and was directly attributable to Hartman’s management decisions, including the anchor tenant’s decision to move out “after a long period of frustration” with Hartman. Furthermore, the company stated that the property was sold as a broader effort to reduce high-interest debt following a Chapter 11 bankruptcy filing by one of the company’s subsidiaries in 2023. All in all, the company claimed that the sale actually represented an $11.7 million value gain when accounting for avoided negative cash flow and capital expenditure obligations.
Silver Star further defended its claim that a pivot to self-storage would offer better long-term value than liquidation. In a recent press release, the company highlighted the success of its subsidiary, Southern Star Self Storage, citing “marked improvements in occupancy, [net operating income], and community integration” at several of its properties, including an NOI that tripled from $16,967 in Q1 2024 to $52,370 at its Montrose StormKing property in Colorado.
The war between Silver Star and Hartman has been ongoing since at least March 2023, when Silver Star announced the removal of Hartman as executive chairman. Hartman, who remains a director and stockholder of Silver Star, initiated legal proceedings against Silver Star, alleging that, among other charges, the company breached Maryland law by not holding an annual stockholder meeting. Silver Star responded with a lawsuit of its own against Hartman in December 2023, accusing Hartman of mismanagement.
In January 2024, Silver Star’s executive committee alleged that Hartman was seeking “personal control” of the company. Hartman quickly responded with a shareholder address video, doubling down on his previous claims. In July 2024, Silver Star overcame a major litigation hurdle when the Circuit Court for Baltimore City signed an order denying Hartman’s motion for partial summary judgment, which sought to liquidate Silver Star. In September 2024, Silver Star continued to refute Hartman’s claims and defend the company’s shift toward self-storage. In March 2025, Silver Star eliminated nearly 90% of its workforce for operations restructuring in what it called a “comprehensive strategic turnaround plan” with self-storage investments.
The 2025 annual meeting of shareholders will take place virtually on June 30, 2025, at 10 a.m. CT. Shareholders of record as of June 1 are eligible to vote.
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