Houston-based REIT Silver Star Properties has landed in bankruptcy again after a planned transition from office to self-storage failed to right the ship.

The public real estate investment trust filed for Chapter 11 bankruptcy protection on May 28. Silver Star is aiming to reorganize its obligations and preserve “tangible and intangible assets,” according to a June 5 shareholder update filed with the Securities and Exchange Commission.

The company has $75M in liabilities and $100M in assets, but it warned shareholders that bankruptcy proceedings might cancel any equity they stood to gain. Four loans are in default, along with a $5.75M promissory note for a self-storage property that moved to foreclosure June 2.

Silver Star previously filed a Chapter 11 bankruptcy petition in September 2023. The plan then was to liquidate legacy office assets, reposition others into a new entity and resolve debts. It had $217M in outstanding debt and was in the process of whittling down the balance by selling off office assets.

However, ongoing litigation, tight finances and lending constraints prompted a strategic review of alternatives, according to the shareholder update.

The REIT’s holdings in retail, office and industrial properties were to be sold off for a fully fledged pivot into self-storage. While it did pick up nine properties in 2023 through an acquisition of Southern Star Self-Storage, touted as a boost to the REIT’s net operating income and occupancy numbers, that pivot proved to be a bumpy one. It was plagued with an SEC investigation, litigation and blocked deals to sell properties.

As the company was working through proceedings, it accused founder and former CEO Allen Hartman, who left in October 2022, of mismanagement when he held the top position. A back-and-forth with the company's CEO, Gerald Haddock, ensued. Haddock accused Hartman of meddling in company business and trying to promote inexperienced family members to high-ranking positions in the company.

In a 2023 lawsuit, Silver Star accused Hartman of fraud, breach of fiduciary duty and illegal meddling when it came to selling off Silver Star assets. The case is still ongoing.

CORRECTION, JUNE 11, 1:22 P.M. ET: This article has been updated to clarify the status of the legal proceedings between Silver Star and Allen Hartman and to specify the date of his departure.