Silver Star unit Hartman secures confirmation of Chapter 11 plan

By Sarah Lizee

Olympia, Wash., Feb. 23 – Silver Star Properties REIT, Inc. indirect subsidiary Hartman SPE, LLC received confirmation of its Chapter 11 plan of reorganization on Friday from the U.S. Bankruptcy Court for the District of Delaware.

Prior to bankruptcy, the debtor began the process of transitioning its properties from office, retail and industrial assets into self-storage properties. On the effective date, the debtor will transfer its remaining properties to Silver Star CRE, LLC, which is wholly owned by Silver Star Mezzanine Borrower, LLC.

After the effective date, the reorganized debtor will be the sole member of Silver Star Mezzanine Borrower, which will, in turn, be the sole member of Silver Star CRE. Thus, Silver Star Borrower will be the owner of the debtor’s properties remaining on the effective date and will continue to transition those properties into self-storage assets.

Holders of $271.28 million of class 1 prepetition lender secured claims will receive a full recovery under the plan. The claims will be paid at closing with proceeds of an exit facility, which will consist of one or more first-lien senior secured mortgage loans and associated first-priority senior secured mezzanine loans.

Also, the $3.23 million of other secured claims and the $20.12 million of general unsecured claims will be paid in full.

Interests will be reinstated.

Silver Star is a self-managed real estate investment trust based in Houston. Hartman SPE filed bankruptcy on Sept. 13 under Chapter 11 case number 23-11452.

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