Hartman REIT Lawsuit: $50M Countersuit, SEC Closure, Bankruptcy

The Hartman REIT lawsuit is a multi-front legal fight between Silver Star Properties REIT — formerly Hartman Short Term Income Properties XX — and its ousted founder Allen R. Hartman, running since 2022 across Texas and Maryland courts, two bankruptcies, and a closed SEC investigation. As of mid-2026, Silver Star is in Chapter 11 for the second time, a Maryland court has ordered a shareholder vote on liquidation that has been postponed indefinitely, and the company has warned that existing equity may be impaired or cancelled.¹

Why Hartman Was Removed

Allen Hartman founded the REIT in 2009 and built it into a portfolio of 44 commercial properties, roughly 6.8 million square feet in the Houston and San Antonio markets.² The board transitioned him from CEO to Executive Chairman in October 2022 and removed him from that role in March 2023. The company rebranded as Silver Star Properties REIT in December 2022.³

The immediate trigger was a default on a $259 million commercial mortgage-backed securities loan from Goldman Sachs, a floating-rate two-year instrument taken out during the pandemic. By June 2022, Goldman had told the board refinancing was unlikely; by July, the effort had collapsed. The board suspended shareholder distributions and began exploring office asset sales.⁴

Beyond the loan default, the board — led by Gerald Haddock, Jack Tompkins, and Jim Still — accused Hartman of self-dealing, nepotism, diverting company resources to personal political and religious endeavors, and installing inexperienced family members in executive roles.⁵ Hartman denied all allegations.⁶

The Competing Lawsuits

Litigation broke out on several tracks after the removal.

Hartman’s Texas Loan Suit

In March 2023, Hartman and Hartman vREIT XXI sued in Harris County over an outstanding loan Silver Star owed to Hartman XXI. Roughly $17 million in unapproved loans had moved from Hartman XXI to Silver Star during Hartman’s tenure, according to the company’s later fraud petition.⁷

Hartman’s Maryland Suit to Force a Meeting and Liquidation

Silver Star is a Maryland corporation. In August 2023, Hartman filed in the Circuit Court for Baltimore City to compel an annual shareholder meeting — the company had not held one since 2016, having repeatedly failed to reach a quorum. In November 2023, he amended the complaint to demand immediate liquidation, arguing the company had missed a charter deadline to either list its shares on a national exchange or wind down.⁴

The Lis Pendens and First Bankruptcy

In July 2023, Hartman recorded lis pendens — notices claiming an interest in real property — against 35 commercial properties owned by Silver Star’s subsidiary, Hartman SPE, LLC. Silver Star said the filings blocked asset sales and put it in technical default on some debts. To clear title, the company placed Hartman SPE into Chapter 11 in Delaware on September 13, 2023. In a November 2023 stipulated judgment from that proceeding, Hartman admitted that he and Hartman XXI held no interest in Silver Star’s real property.⁷ Hartman SPE exited bankruptcy on March 27, 2024.⁸

Silver Star’s $50 Million Fraud Countersuit

In December 2023, Silver Star’s trustees sued Hartman, his wife Lisa, his daughter Margaret, Hartman vREIT XXI, and Hartman XX Holdings in Harris County, seeking more than $50 million in damages for fraud, civil conspiracy, slander of title, tortious interference, and self-dealing. The petition alleged Hartman directed unauthorized borrowing, misappropriated loan proceeds, diverted resources to personal endeavors, and used the lis pendens as leverage to force the company to buy his shares at a premium.⁷

The Texas court sanctioned Hartman during the proceedings for failing to comply with discovery, ordering him to produce overdue documents and pay Silver Star’s related legal fees.⁹ The case settled in 2025 under a court order requiring Hartman to pay Silver Star’s legal fees.¹

The Federal Proxy Case

Silver Star sued Hartman in the U.S. District Court of Maryland in October 2023, seeking an injunction against his proxy solicitations and what the company called false statements to shareholders. In January 2024, the court denied the preliminary injunction, calling it an impermissibly vague “obey-the-law” order. The judge added that the denial should not be read as “greenlighting the violation of federal securities law.”¹⁰

What the Maryland Court Actually Ordered

Hartman’s Maryland liquidation case went to a six-day bench trial in November 2024. The resulting opinion split the outcome.

On liquidation, the court found Silver Star’s initial public offering terminated on April 25, 2013, meaning the charter’s ten-year deadline to list shares or begin winding down expired on April 25, 2023. The board missed it without the required shareholder approval for an alternative strategy. The judge, however, declined to order immediate forced liquidation, calling it too “drastic.” Instead, the court ordered the board to hold a shareholder meeting within six months on at least 45 days’ notice, with a vote on whether to liquidate or approve an alternative such as the board’s pivot to self-storage. Failure to hold the meeting, or a shareholder rejection of the alternative, would require liquidation.¹¹

On the company’s defenses, the court upheld Silver Star’s shareholder rights plan — a poison pill — finding it had been “enacted in good faith” in response to what the board reasonably interpreted as a hostile takeover attempt. The plan had effectively diluted the Hartman Group’s ownership by roughly 50%.⁴

The opinion also flagged “general credibility issues” with Hartman, citing his November 2023 affidavit admitting that earlier claims about hiring proxy solicitors and having shareholder support were false, along with his unauthorized inclusion of Hartman XXI in the Maryland suit and the improper lis pendens.⁴

The Shareholder Vote That Never Happened

In June 2025, the Hartman Group filed a definitive proxy statement urging shareholders to reject the board’s alternative strategy in favor of an orderly liquidation and return of capital.¹² The meeting was first set for June 30, 2025.¹³

It kept getting pushed. In September 2025, Silver Star sued in Maryland District Court to delay the meeting from October 6 to December 31, 2025, accusing Hartman of disseminating misleading information about executive compensation, company performance, and the company’s relationship with the SEC, and of violating federal law through false proxy solicitations. Hartman called the delays an “ongoing effort to illegally reject the Company’s bylaws.”¹⁴ By October 2025, the meeting had been postponed a sixth time and shelved indefinitely. A court denied Silver Star’s attempt to void proxy votes already cast. As of the available record, no shareholder vote has occurred.¹⁵

The two sides put competing numbers in front of shareholders. Hartman claimed Silver Star had lost roughly $278 million in net asset value since October 2022, dropping from about $412 million to $134 million by mid-2024, and alleged the board sold $395.9 million in legacy assets between 2022 and 2024 without returning any of the $32 million in realized profits to shareholders.¹⁶ The board countered that its turnaround and self-storage pivot were “the only path for delivering shareholder value” and warned that a forced liquidation would trigger foreclosures and destroy remaining value.¹⁷

SEC Investigation: Closed With No Action

The SEC formally opened an investigation into Silver Star on February 2, 2024, after the first bankruptcy and the internal conflict.¹⁸ The investigation concluded on August 15, 2024, with no enforcement action recommended against any parties.¹⁹

Second Bankruptcy and What It Means for Shareholders

On May 28, 2026, Silver Star filed for Chapter 11 a second time, in the U.S. Bankruptcy Court for the Northern District of Texas. The company reported approximately $100 million in assets against $75 million in liabilities, with four loans in default totaling more than $65 million and a fifth defaulted loan that had triggered foreclosure proceedings on a self-storage facility in McKinney, Texas.¹

Silver Star described the filing as made “in an abundance of caution” to preserve asset value while executing a liquidation and repositioning strategy. The company disclosed plans to potentially create a new entity, referred to as “NewCo,” to hold remaining self-storage assets and “litigation rights,” signaling an intent to preserve its claims against Hartman through the bankruptcy.²⁰

For shareholders, the direct warning is in the filing itself: “existing equity may be impaired or cancelled,” and no funds are expected to be available for unsecured creditors after administrative expenses.¹ Hartman retained roughly 7.76% of the company’s outstanding shares as of the second bankruptcy filing.²⁰

1
The Real Deal. Embattled Silver Star Files for Bankruptcy for Second Time
2
Alts Wire. Silver Star Properties REIT Seeks Complete Separation From Hartman
3
Hartman Income REIT. Hartman XX Unveils Name Change
4
Circuit Court for Baltimore City. Hartman v. Silver Star Properties REIT, Memorandum Opinion
5
The Real Deal. How Gerald Haddock Aims to Pull Silver Star Into the Black
6
The Real Deal. Meet Silver Star Properties Ousted Chairman and CEO Allen Hartman
7
U.S. Securities and Exchange Commission. Silver Star Properties REIT v. Allen R. Hartman, Original Petition
8
Epiq. Hartman SPE LLC Bankruptcy Case Information
9
Silver Star Properties REIT. Silver Star REIT Prevails Again in Court as Texas Judge Orders Hartman to Comply With Discovery
10
U.S. District Court for the District of Maryland. Silver Star Properties REIT v. Hartman vREIT XXI, Memorandum and Order
11
Alts Wire. Maryland Court Delivers Mixed Ruling in Ongoing Hartman vs. Silver Star Battle
12
U.S. Securities and Exchange Commission. Hartman Group Proxy Filing
13
Alts Wire. War of Words Escalates as Shareholder Vote Nears in Silver Star Hartman Saga
14
The Real Deal. Houston’s Silver Star Properties Requests Proxy Vote Delay
15
Simply Wall St. Silver Star Properties REIT
16
Snowball Research. Hartman Group Blasts Silver Star Properties for Asset Sell-Off
17
Silver Star Properties REIT. Important Update for Shareholders
18
Alts Wire. SEC Concludes Its Investigation of Silver Star Properties REIT
19
Silver Star Properties REIT. Silver Star Properties REIT Provides Update to Shareholders Regarding NAV
20
Alts Wire. Silver Star Properties Files for Chapter 11 Disclosing Four Defaulted Loans and Foreclosure Threat