Girard Gibbs is investigating the board of directors of Prime Group Realty Trust as well as other entities associated with PGRT for possible breaches of duties owed to holders of PGRT’s Series B preferred shares (OTC: PMGEP). PGRT Series B investors who wish to learn more about the investigation, and persons with information relating to the investigation, should contact Girard Gibbs securities fraud lawyer Jonathan K. Levine toll free at (866) 981-4800.
PGRT is a real estate investment trust (commonly referred to as a “REIT”) that owns, manages, leases and develops properties in the greater Chicago area. In 1998, PGRT sold 4 million shares of its Series B preferred stock. Under the terms of those shares, Series B shareholders are to be paid a quarterly dividend rate of 9%, are entitled to receive $25 per share upon the liquidation or dissolution of PGRT, and may elect two representatives to PGRT’s Board if the company fails to pay their dividend for six consecutive quarters.
Through a series of transactions beginning in 2005, PGRT came under the control of Five Mile Equity. Meanwhile, in 2011, PGRT’s Series B shareholders elected two representatives to the Board because the company had failed to pay its dividend for six consecutive quarters, but Five Mile soon removed those representatives from the Board. Five Mile then offered PGRT’s Board $5.25 for each Series B share not owned by Five Mile, to which the Board agreed in September 2012. The merger must be approved by two-thirds of Series B shareholders by a vote held on December 5, 2012. Some of PGRT’s Series B shareholders have complained that the price is too low based on the potential future earnings of PGRT’s assets, and also is an unfair attempt to liquidate the Series B shares without paying the $25 redemption price.