Meanwhile, the REIT has decided to suspend its fourth quarter dividend on its common shares, partly because of its inability to sell or refinance some of its Downtown and suburban office properties.

The letters of resignation from Reschke and Curto were part of the high-interest loan made by Paramus, NJ-based Vornado to Primestone Investment Partners L.P., a private company controlled by Reschke. The collateral for the loan is 8 million partnership units that can be converted into a one-third stake in Prime Group.

A foreclosure auction is expected to be rescheduled this week on the partnership units, which Vornado would end up owning with Cadim inc. The Montreal-based advisors had offered to buy Prime Group common stock last summer at $14.50 per share; the stock closed last week at $8.96. Cadim paid $50 million for a 50% stake in the $104-million Primestone debt.

Vornado delivered the letters of resignation to Prime Group's board, which includes former Governor James R. Thompson, in December. However, attorneys told trustees the resignations were invalid because Reschke and Curto have no intention of resigning, according to an 8-K filing with the Securities and Exchange Commission.