Genesis Development and Construction Ltd. Announces Termination by Internet Cable Corporation of Proposed Merger Talks and Board Changes.NEW YORK--(BUSINESS WIRE)--August 3, 1999-- Genesis Development and Construction Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : GDCUF, GDCOF) announced today that Internet Cable See cable Internet. Corporation has terminated the previously announced Memorandum of Understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. 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 Israel Discount Bank Ltd. (Hebrew: בנק דיסקונט לישראל בע"מ), I.D.B. , Ltd. (the "Bank") in connection with ongoing litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 right·eous adj. 1. Morally upright; without guilt or sin: a righteous parishioner. 2. In accordance with virtue or morality: a righteous judgment. 3. cause of action without the impediment A disability or obstruction that prevents an individual from entering into a contract. Infancy, for example, is an impediment in making certain contracts. Impediments to marriage include such factors as consanguinity between the parties or an earlier marriage that is still valid. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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. |
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