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Silver Star Reveals Latest Updates in Ongoing Battle Against Hartman

Silver Star Properties REIT, a publicly registered non-traded real estate investment trust formerly known as Hartman Short Term Income Properties XX Inc., announced its latest updates in the ongoing litigation against Allen Hartman, its former chief executive officer.

As previously reported by The DI Wire, Silver Star was seeking stockholder consent to re-elect three incumbent directors to the board of directors and thereafter reduce the number of directors from four to three, effectively removing Hartman from the board. In the company’s recent press release, Silver Star stated that Hartman was able to obtain a preliminary injunction which halted – pending final decision on the issues – the company from tabulating the voting results of the consent solicitation. Silver Star has appealed this decision, but there is currently no date set in which the appeal may be heard.

Furthermore, Silver Star reported that Hartman has filed a fourth amended complaint against the company and that the Baltimore city trial court has reserved five days in September 2024 “for hearings on dispositive motions, motions in limine, and trial.” According to Silver Star, this complaint “is further evidence that [Hartman] is trying to force management and the board to liquidate the company in an inadvisable manner.” Silver Star does not expect the issues between itself and Hartman to be resolved until 2025, though there is no actual date set yet.

Additionally, the company reported that, despite Hartman’s actions, it continues to pivot into the self-storage space and has obtained a loan of $135 million, enabling it to exit from Chapter 11 bankruptcy.

This is just the latest in what has already been a long battle between the two sides. Silver Star’s executive committee previously claimed that Hartman was seeking “personal control” of the company. Hartman responded with a shareholder address video, essentially doubling down on his previous allegations and claiming that Silver Star’s board had gone “rogue” and was putting its shareholders’ capital at risk.

In what appears to be unrelated to its Hartman issues, Silver Star stated in the same press release that it received a subpoena from the U.S. Securities and Exchange Commission enforcement division seeking various documents and information. Silver Star said that it is in the process of complying with this subpoena and has received no formal notice that it will become the subject of an SEC enforcement action.

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