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Cadim Pays $50 Mil For Primestone Debt Piece

CHICAGO-A bankruptcy filing by Primestone Investment Partners stops a Tuesday foreclosure auction sought by Vornado Realty Trust, which sells half of the debt to the former Prime Group Realty Trust suitor.

By Mark Ruda | Updated on November 20, 2001

CHICAGO-A scheduled foreclosure auction involving 7.9 million shares of Prime Group Realty Trust stock was cancelled Tuesday by a bankruptcy filing by chairman Michael W. Reschke’s Primestone Investment Partners, L.P. Meanwhile, Cadim Inc. is in position to get 16.8% of the company it recently pursued by buying half the foreclosed Primestone debt for $50 million from Vornado Realty Trust.

Cadim backed out of a deal to buy most of Prime Group Realty Trust’s common stock last month in a deal that would have included Reschke.

The Canadian company Tuesday bought half of the two loans made by Paramus, NJ-based Vornado to Primestone. The two loans, totaling $106 million including interest and fees, are in default and a foreclosure auction was scheduled for Tuesday. However, Primestone has filed for Chapter 11 bankruptcy protection, which automatically stops foreclosure proceedings.

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