(BW) (NY--GENESIS DEVELOPMENT) (GDCUF)
Genesis Development and Construction Ltd. Announces Termination
by Internet Cable Corporation of Proposed Merger Talks and Board Changes
Business Editors
NEW YORK--(BUSINESS WIRE)--August 3, 1999--- Genesis Development and
Construction Ltd. (NASDAQ: GDCUF, GDCOF) announced today that Internet Cable
Corporation has terminated the previously announced Memorandum of Understanding
providing for a merger of the two companies. Based on a written termination
notice and communications with representatives of Internet Cable, Genesis
attributed this unanticipated event to uncertainty created by the recent actions
of Israel Discount Bank, Ltd. (the "Bank") in connection with ongoing litigation
arising from the failed takeover of Granit HaCarmel Investments Ltd. that had
been initiated last year by Eli Aran and Moshe Schnapp, principal stockholders
and founders of Genesis.
As announced last week, the Bank filed a petition in an Israeli court
challenging the anticipated benefits of the proposed Internet Cable transaction,
asserting claims to a substantial portion of the controlling Class B Ordinary
Shares of Genesis and seeking to influence the future management and direction
of Genesis. Although the Israeli Court temporarily suspended its order
appointing the Bank's legal counsel as Trustee of the contested shares, pending
an analysis of the proposed merger by a Court-appointed expert, the Bank's
actions, attendant management concerns and conflicting time pressures led to
last week's resignation of Mr. Schnapp as Chief Executive Officer, President and
a director of Genesis and the submission today by Mr. Aran of his resignation as
the Company's Chairman.
In acknowledging his resignation and the action of Internet Cable, Mr.
Aran stated: "In its ongoing attempt to pressure us to cease our well-founded
efforts to seek legal redress from Israel Discount Bank, the Bank has, once
again, deprived Genesis of a valuable business opportunity. Internet Cable
reacted to the uncertainties created as a result of the Bank's past and
anticipated actions, and their perceived effect on the value and continued
viability of Genesis as a merger partner."
Mr. Aran continued: "As a result of its unsubstantiated claims and
improper assertions, the Bank has now compounded our damages. While I am
disappointed by Internet Cable's diminished assessment of the value of Genesis,
which led to the termination notice, I am appalled by the continuing
interference by Israel Discount Bank with the business affairs and direction of
our company and the resulting loss of a significant corporate opportunity and
the adverse effect this has had on the value of our shares. Despite my
resignation, I will assist Genesis in its ongoing effort to expand its current
business, and will join my friend and former colleague, Moshe Schnapp, in
prosecuting our righteous cause of action without the impediment of ongoing
management responsibilities."
The Board of Directors of Genesis intends to fill promptly the
vacancies created by the resignations of Messrs. Aran and Schnapp. Genesis also
announced the resignation of John D'Auguste, the former Cabletron executive who
was to serve as Chief Executive Officer following the Internet Cable merger.
This report contains forward-looking statements which are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve risks and
uncertainties, and concern, among other things, the ability of the Company to
carry out its business plan. Further information regarding these risks is
provided from time to time in the Company's filings with the Securities and
Exchange Commission.
- --30--lp/ny*
CONTACT: Genesis Development and Construction Inc., New York
Guy Ravid
Phone: (914) 634-0300
Fax: (914) 634-8077
gdcuf@aol.com