Significantly, Prime Group also said this: "The company also intends to continue its ongoing process of exploring its strategic alternatives…including the possible sale of the company." Word of at least two other offers for Prime Group has emerged in recent months, both somewhat higher (about $7 per share) than the Prime Mansur bid: one by Chicago-based Golub & Co. and Dublin-based Qulinlan Private, another by New Jersey-based Lightstone Group and Louis Conforti, Prime Group's former CFO.

Besides the prospect of better offers, there may also be elements of a personality conflict between buyer and seller, or at least between specific individuals involved with the deal. "Selling to someone who comes back [with] Reschke was problematic," a Chicago real estate executive familiar with the deal's players tells GlobeSt.com. "He was marched out of the company, and that would seem to complicate the issue for anyone still operating the company, who would have to explain to shareholders—was this the best value? That didn't make sense to me, and I think they [Prime Group] got cold feet when they thought that one through."

Nearly three years ago, Reschke, then chairman of Prime Group, was shown the door by the REIT's board of directors, who held him responsible for a precipitous drop in the stock's value following a default on $100 million in loans held by Vornado Realty Trust and Cadim Inc. "I heard that the trust had no problem with Mansur, or how he was financing [the deal], but they had a huge problem with Reschke," another real estate executive familiar with the parties involved tells GlobeSt.com. "It was a chemistry problem."

Regarding Mansur, the same executive says, "Barry is a flipper. If he was looking to make money on the break-up fee, or whatever he can get by selling the assets, it's very true to form. I think he's going to get something out of it."

Complicating things even further is the status of the REIT's preferred shareholders under the disputed acquisition. It isn't clear whether or not the $122-million loan financing the acquisition was to be subordinated to the REIT's preferred shares (which total about $100 million). Observers cited the fear of legal action by preferred shareholders over this matter as another factor in the REIT's unwillingness to consummate the purchase by Prime-Mansur.

Unless the parties settle out of court--always a very real possibility in cases such as this--the prospect of litigation may well delay the ultimate disposition of the REIT and its 4.6 million sf of office space (and 100,000 sf of industrial space), plus its interest in other Chicago office buildings. "Going to court clouds the ability of serious, well-financed, thoughtful buyers to go through the necessary due diligence," says the first executive that GlobeSt.com spoke with. "It puts a cloud over anyone trying to put in the time and energy necessary to understand that portfolio. A buyer has to ask: Is the litigation done, or does it open the door for shareholder lawsuits?"