Counsel Corporation Comments on Status of Bergen Brunswig Lawsuit.

Business Editors

TORONTO--(BUSINESS WIRE)--July 7, 2000

Counsel Corporation (TSE:CXS.) (Nasdaq:CXSN) ("Counsel" or the "Company") has withdrawn its motion to compel arbitration to resolve differences between Counsel and Bergen Brunswig Corporation ("Bergen") over the sale of Stadtlander Drug Co.

In January 1999, Counsel and Bergen completed a transaction under which Bergen acquired Stadtlander Drug Co., a subsidiary of Counsel, in a cash-and-stock transaction valued at approximately US$400 million, including the assumption of approximately US$100 million of debt.

Four months after the transaction was successfully completed - and after Bergen and its own outside auditors, Deloitte & Touche, had reviewed and found no fault with the two audits of Stadtlander (at September 30 and December 31, 1998) required under the purchase agreement - Bergen notified that it was seeking a postclosing purchase price adjustment, which Counsel viewed as an attempt to renegotiate the purchase price.

After a detailed review of the matter with its auditors from Arthur Andersen, Counsel concluded that the adjustment Bergen was seeking was unwarranted and unreasonable.

After multiple meetings and pursuant to the terms of the agreement, both sides determined to resolve their differences by means of binding arbitration by an independent accounting firm. Counsel and Bergen entered into discussions to select an independent accounting firm that was acceptable to both sides.

Subsequently, and without prior notice Bergen filed suit against Counsel in California state court.

In response to Bergen's lawsuit, Counsel filed a motion to compel arbitration of the dispute with Bergen under the dispute resolution procedures of the purchase agreement. Bergen opposed Counsel's motion to compel arbitration but indicated that it might agree to arbitrate the accounting issues raised in the lawsuit if it could significantly expand the number and type of accounting issues to be arbitrated and, in addition, if the contractual arbitration procedure could be significantly altered. Counsel and Bergen engaged in negotiations to attempt to reach an agreement modifying the contractual arbitration provision.

In these negotiations, Bergen proposed significant changes to the contractual arbitration procedure. Of greatest concern, Bergen advised Counsel that in the event of a sale of Stadtlanders, Bergen could not guarantee that Counsel and its representatives would have access to the historical accounting records of the company in the arbitration, even though it is required to do so under the terms of the purchase agreement.

Counsel has concluded that complete and unlimited access to Stadtlander's accounting records is necessary in order to prepare an adequate response to the disputed accounting issues. As a result of Bergen's inability to guarantee such access, and the other limitations and restrictions placed upon the arbitration by Bergen, Counsel has concluded that going forward with the arbitration under the terms dictated by Bergen presents an unacceptable risk to Counsel and has so informed Bergen. Since Bergen is apparently unable to guarantee Counsel's access to Stadtlander's accounting records even in the context of an arbitration pursuant to the dispute resolution procedures of the purchase agreement, Counsel has also withdrawn its motion to compel arbitration. Counsel believes that the discovery rights available to it in litigation, but not in arbitration, will significantly increase the likelihood that Counsel will have access to the accounting records necessary to defend against Bergen's allegations. Counsel reaffirms its position that the Bergen lawsuit is completely without merit and believes that this process will lead to a more speedy and satisfactory resolution.

This release involves forward-looking statements with respect to business plans and expectations of Counsel Corporation. The accuracy of these statements involves a number of risks and uncertainties, including, but not limited to the uncertainty inherent in matters subject to litigation, changes in economic and market conditions, financing, changes in governmental regulations and laws as well as other risk factors detailed in Counsel's securities filings, to which recipients of this release are referred for additional information.