Prime Group officials say they are in negotiations with "variousparties" on possible loans or repurchases of the preferred stock.As a result, the REIT is holding off on declaring itsfourth-quarter common stock dividend until next month. Meanwhile,Prime Group has been attempting to sell properties, including770,191-sf 180 N. LaSalle St.


Prime Group stock closed at $9.30 per share Monday, a one-dayloss of 3.1% and 37.5% off its 52-week high. At $1.35 per share,the yield on Prime Group stock is 14.5%.


Meanwhile, Paramus, NJ-based Vornado Realty Trust has received agreen light from a Delaware judge to proceed with its foreclosureauction involving 7.9 million shares of Prime Group Realty Truststock. The foreclosure stems from the default of Prime Groupchairman Michael W. Reschke's Primestone Investment Partners, L.P.on two loans totaling $106 million. Collateral is partnership unitsconvertible into nearly 8 million shares of Prime Group stock, aone-third stake in the REIT. A bankruptcy action by Primestone wasdeemed to have been filed in bad faith.


Half of the debt is now held by Montreal-based Cadim inc., whichwas involved in talks this summer about a possible purchase ofPrime Group's common stock. Those talks fell through, and Reschkehas sued the Canadian real estate company claiming it negotiated inbad faith.

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