"We are not going to let anyone steal this company from its shareholders," Reschke says.

A Cadim inc. spokeswoman says the company cannot comment on the lawsuit, adding officials at its Montreal headquarters had not seen it.

Reschke's Prime Group, Inc. and Cadim, an affiliate of Canadian pension and portfolio fund manager Caisse de Depot et Placement du Quebec, tentatively agreed in August to buy the REIT for $14.50 per share. Terms of the deal included Cadim making a $105-million loan to Reschke's Primestone Investment Partners L.P., which would take out high-interest debts of $40 million to Prudential Securities Inc. and $62 million to Paramus, NJ-based Vornado. The lawsuit claims the take-out loan was to be made regardless of whether the deal to buy out the REIT's stock went through.

Cadim backed out of the deal in October after renegotiation attempts failed, and Vornado moved to auction off its collateral – a one-third stake in Prime Group Realty Trust. Primestone filed for bankruptcy, delaying the auction, but Cadim paid $50 million to buy 50% of Vornado's debt. The lawsuit alleges Cadim capitalized on Prime's debt situation and failed to negotiate in good faith.

Although Cadim's spokeswoman says she believes the loan offer was part of the original deal, she notes the purchase fell through.

While the lawsuit notes Cadim paid the equivalent of more than $13 per share in buying the defaulted debt, Prime Group Realty Trust stock closed at $9.71 per share Wednesday.

Meanwhile, the REIT continues to pursue sales of its assets, including 180 N. LaSalle St. as well as a suburban office portfolio that includes Continental Towers in Rolling Meadows. It also is developing the 1.2-million-sf Dearborn Center.

"Prime Group Realty Trust is operating successfully and has some of the highest quality real estate assets in the Chicago area," Reschke claims. "We have said we are going to do everything we can to enhance the company's value to shareholders and that remains our goal.