#United States #Houston #consent solicitation #Silver Star Properties #Allen Hartman

Silver Star Properties Announces Court Victory and Future Plans

Silver Star Properties REIT, Inc., a self-managed real estate investment trust, recently achieved a significant legal victory. On May 20, 2025, Judge Anthony F. Vittoria from the Circuit Court for Baltimore, Maryland, ruled in favor of Silver Star, validating the 2024 consent solicitation process. This process arose amidst an ongoing proxy contest with Allen Hartman and stemmed from allegations of bad faith and Maryland law violations on the part of Silver Star and its Executive Committee.

This ruling represents a crucial win for Silver Star as it enables the company to proceed with its restructuring and strategic pivot into the self-storage asset class without the shadow of legal uncertainty. Given the contentious nature of the case, it sheds light on the complicated dynamics at play within the company.

Key Highlights from the Ruling

The judge's decision came after extensive review of the circumstances surrounding the consent solicitation. Notably, Judge Vittoria indicated that the company acted reasonably based on the belief that Hartman would exploit the annual meeting to misinform shareholders. Hartman's previous actions, including filing unauthorized liens against company properties and attempting to leverage the Board into transferring valuable assets, were highlighted in the court's findings.

Hartman had accused Silver Star and its Executive Committee of breaching Maryland law, a claim which the judge dismissed, concluding that there was no bad faith involved. Hartman’s conduct during this battle, including a campaign aimed at regaining control of the company and extracting financial benefit, was termed as ‘strong-arming’ and was openly criticized by the court.

Background Context of the Dispute

The conflicts date back to March 2023 when Hartman filed a lawsuit against Silver Star without prior disclosure to the company. Hartman subsequently pressed for an annual meeting and attempted to push negotiations through aggressive tactics. The judge's assessment noted that this aggressive campaign stemmed from Hartman’s inability to settle his own grievances regarding control of the company. Moreover, Hartman's own admissions during the proceedings about dishonesty and misinformation significantly undermined his credibility and claims against Silver Star.

Looking Ahead: Annual Meeting and Proxy Contest

With the ruling, Silver Star is set to move forward with plans for an annual meeting scheduled for July 2025, amidst the ongoing proxy battle. It plans to solicit votes regarding its pivot strategy and other pertinent issues as determined by its Executive Committee. Shareholders are encouraged to engage with the definitive Proxy Statement that will contain crucial information about Silver Star’s future strategies.

In the statement filed with the SEC on May 19, 2025, further details about the annual meeting and strategic directions were discussed. Following the completion of the definitive proxy statement, shareholders will be able to access it and other essential documents through the SEC’s website.

Conclusion

This legal validation strengthens Silver Star's position as it continues to navigate the complexities of corporate governance and shareholder relations. The company remains committed to maximizing shareholder value while adapting to the evolving market landscape. As these proceedings continue, shareholder engagement will be key to Silver Star’s strategic maneuvers in the coming months.

For more information, please refer to the full opinion published by the court or the SEC filings available through Silver Star’s communications.