Counsel Corporation: Impower Inc. Makes Voluntary Chapter 11 Filing.

Business Editors

TORONTO--(BUSINESS WIRE)--Aug. 6, 2001

Day-to-day Business Operations to Continue Uninterrupted

Counsel Corporation (Nasdaq:CXSN) (TSE:CXS.) today announced that its 33%-owned portfolio investment, Impower Inc., has made a voluntary Chapter 11 filing in the United States Bankruptcy Court in New Jersey. Impower believes that the filing will allow it to operate its business in the normal fashion under court protection while it continues discussions with representatives of certain major creditors and others on a restructuring plan.

According to Impower's management, the combination of a general economic downturn, a softening advertising environment, the demise of pure play Internet companies and the company's infrastructure costs all contributed to the need for the filing. After conducting a thorough and careful review of all of its available options, Impower concluded that a reorganization under Chapter 11 was the only way to secure additional operating liquidity and stability as well as maintain sufficient flexibility to restructure its outstanding obligations and continue its operating turnaround. Impower's management has said that they expect it will have sufficient liquidity throughout the period of reorganization.

Greg Ellis, Impower's President and COO has said that he was encouraged by the continued support and commitment of the company's key customers and vendors, who were aware of Impower's situation and plans. He also said that Impower's customers realize the importance of the interactive marketing channel and that Impower was committed to its mission of providing these leading marketers with cost effective customer acquisition and customer development solutions.

Counsel's investment in Impower is currently carried at approximately US$15 million consisting of equity and senior secured debt approximating US$9 million and US$6 million, respectively. Counsel intends to fully reserve the equity portion of its investment effective the second quarter of this year. It expects to recover all or a significant percentage of the debt portion of its investment, subject to the uncertainty generally related to a Chapter 11 filing.

After reviewing the situation at Impower, Counsel decided that it would not be prudent to make additional loans to the company but, rather, that the decision of Impower's management to reorganize under the protection of Chapter 11 was the most sensible option. Counsel supports the efforts of Impower's management to restructure the company and believes that these efforts will enable Counsel to maximize the return on its investment in Impower.

About Impower Inc.

Impower is a leading full-service provider of business-to-consumer and business-to-business e-Marketing solutions. Headquartered in Princeton, NJ, with offices in Corte Madera, CA and Peterborough, NH, the company's operations include an e-mail and interactive marketing services business and an e-mail database division. The e-mail database division includes Impowerbase(tm), an e-mail database, as well as Impowermail(tm), an outsourced e-mail distribution solution. These businesses serve leading marketers with high value interactive marketing products and services. Impower's subsidiary, Datamark Technologies, Inc., will continue day-to-day operations unaffected.

About Counsel Corporation

Counsel Corporation (TSE:CXS / Nasdaq:CXSN) focuses on acquiring significant positions in, and actively managing for growth, a portfolio of operating companies. Counsel's strategic portfolio investments include companies that possess enabling technologies that provide a competitive advantage for their end users and have the potential to contribute to the transformation of the business environment: a 56% stake in marketing and sales effectiveness systems provider Proscape Technologies, Inc. (www.proscape.com); a 33% stake in e-marketer Impower, Inc. (www.impower.com); a 28% stake in e-learning application service provider IBT Technologies, Inc. (www.ibt-technologies.com); and a 13% stake in Internet data communications and services provider Core Communications Corporation (www.core.net).

Counsel Corporation's wholly owned subsidiary, Counsel Communications LLC, focuses on acquiring, consolidating and operating Internet telephony and other telecommunications-related businesses. In February 2001, Counsel Communications acquired 97.5% of Nexbell Communications Inc. (www.nexbell.com), a designated Cisco Powered Network member in the Voice over Internet Protocol (VoIP) category. On March 1, 2001, Counsel Communications acquired a 65% interest in I-Link Incorporated (Nasdaq:ILNK; www.i-link.com), an enhanced Internet Protocol voice and data communications service provider. On April 18, 2001, I-Link acquired Counsel's interest in Nexbell in exchange for shares, resulting in Counsel owning approximately 70% of I-Link. Most recently, I-Link acquired and commenced operations of a 10XXX "dial around" business with approximately US$70 million of annualized revenues. The Company's primary strategy is to develop one of the most sophisticated, next-generation communications networks in the U.S., providing efficient, leading-edge domestic and international VoIP connectivity as well as other related "value-added" and traditional telecommunications services.

In the medical products sector, Counsel's 78.5%-owned Sage BioPharma, Inc. subsidiary (www.sagebiopharma.com) develops and markets products used in the treatment of infertility. In long term care, Counsel owns six nursing homes in the U.S. and five retirement homes in Canada, all of which are leased to Advocat Inc. Counsel also leases seven nursing homes in Canada, managed by Advocat.

For further information, visit Counsel's website at www.counselcorp.com

This news release may include statements that constitute forward-looking statements, usually containing the words "believe," "estimate," "project," "expects," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this document.