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Silver Star Properties REIT's Legal Triumph in Maryland

On April 10, 2025, Silver Star Properties REIT, Inc., a self-managed real estate investment trust that is currently transitioning towards self-storage assets, provided an important update regarding its ongoing litigation in Maryland. This recent announcement marks a significant milestone in the legal battles faced by the company as it works to revitalize its business model.

The Court's Ruling

The Maryland Appellate Court delivered a substantial victory for Silver Star on April 9, 2025, reversing a previous ruling from the trial court. The earlier decision had provisionally barred the company from soliciting shareholder votes to elect new directors. This injunction stemmed from allegations made by Allen Hartman, who challenged the amended bylaws of the company, claiming they were invalid and adopted with malicious intent. Hartman aimed to prevent Silver Star from gathering written consent from its shareholders, which severely inhibited the company’s ability to proceed with governance improvements.

In a critical turn, the Appellate Court acknowledged that the company’s Board was indeed within its rights to utilize the solicitation procedures in this context. The court’s decision reversed the preliminary injunction, leading to the case being remanded back to the circuit court for appropriate action, including the dissolution of the injunction.

Next Steps for Silver Star Properties

Following this ruling, Silver Star anticipates the Circuit Court Judge to issue an order that will allow an independent inspector to finalize the tallying of votes. General Counsel Adrienne Collins expressed optimism about this development, revealing that the results of the vote, once counted, could lead to a favorable outcome that would facilitate the removal of Hartman from the Board of Directors.

Collins stated, “We will direct outside counsel to comply with the court’s order and take all necessary steps to ensure that the withheld votes are tallied as swiftly as possible. This action is critical in determining whether we pursue our strategy in self-storage or consider liquidation.”

The company’s legal victories come as part of its broader New Direction Plan, which aims to streamline operations, divest legacy assets, and position itself to attract new capital for growth opportunities within the self-storage sector. This strategy is crucial for enhancing the quality of their real estate portfolio and ultimately delivering sustained value to shareholders.

The Road Ahead

Silver Star Properties is committed to the New Direction Plan, which is characterized by a shift in focus toward high-growth sectors, such as self-storage. As the company navigates these changes, it remains hopeful for potential transactions involving other properties as it seeks to boost its capitalization and optimize its asset allocation.

The legal empowerment from the recent court decision is a clear indication that Silver Star is gaining momentum against legal challenges posed by Hartman’s efforts. As the company prepares for upcoming votes, stakeholders will be keenly watching how these developments unfold and what that means for the company's future. The Board believes that counting these additional votes could further reinforce their mandate and strengthen the company’s position as it pursues its revitalization efforts.

The legal landscape remains complex, and Silver Star acknowledges that while the latest court ruling is a notable win, it continues to face uncertainties typical of the real estate investment space. Stakeholders are encouraged to stay informed as further developments are expected soon, and the implications for the company will continue to evolve as it navigates this pivotal phase of transformation.

Conclusion

In summary, Silver Star Properties REIT's recent court victory in Maryland represents not only a legal triumph but also a significant step forward for the company as it pivots toward self-storage. With the anticipated counting of votes and ongoing strategic initiatives, the company is poised to rebuild and optimize its standing in the real estate sector, promising exciting developments for shareholders in the near future.