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Prime Group Realty Trust Announces Commencement Of Litigation By A Series B Preferred Shareholder And Confirms Special Meeting Of Common And Series B Preferred Shareholders On December 5, 2012 To Approve Merger With Five Mile
Prime Group Realty Trust (OTC PINK: PMGEP) (the “Company”) announced today that on November 21, 2012, Ms. Patricia Fox (the “plaintiff”) filed a putative class action lawsuit in the United States District Court for the Northern District of Illinois against the Company, the Company’s Trustees (Messrs. Jeffrey A. Patterson, James G. Glasgow, Jr., Scott R. Leitman, David L. Reynolds, John M. Sabin, Shawn R. Tominus and George R. Whittemore), and Five Mile Capital Partners LLC and various of its affiliates (“Five Mile”). The action relates to the previously announced Agreement and Plan of Merger dated as of September 28, 2012, between the Company and Five Mile pursuant to which Five Mile agreed to acquire the Company’s outstanding Series B preferred shares (other than shares held by Five Mile) for $5.25 in cash per Series B preferred share, subject to approval of the merger by the holders of a majority of the Company’s common shares and at least 2/3rds of the Company’s Series B preferred shares. In the complaint, the plaintiff alleges, among other things, that (i) the Company and the Company’s trustees breached their contractual obligations with respect to the Series B preferred shares by approving the proposed merger, (ii) the Company’s trustees and Five Mile breached alleged fiduciary duties to the Series B preferred shareholders by approving the proposed merger, and (iii) Five Mile would be unjustly enriched to the detriment of the Series B preferred shareholders as a result of the consummation of the merger. Plaintiff seeks declaratory and injunctive relief, including enjoining the completion of the proposed merger, as well as damages.
The Company believes that the allegations contained in the complaint are without merit and intends to defend the action vigorously. The Company may incur significant expenses and costs to defend against the allegations contained in the complaint.