CALGARY, May 21 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Corporation") (TSX:GDC) advises that it has learned that two directors of the Corporation caused a press release dated May 16, 2010 (the "Press Release") to be issued purporting it to be a press release of a Special Committee of the Corporation, followed by a second unauthorized news release issued on the evening of May 20, 2010. Among other things, in the Press Release it was claimed certain steps and actions are being undertaken by a Special Committee of the Corporation. The Corporation is issuing this press release to clarify and correct certain matters addressed in the Press Release. The Press Release and the May 20 release were, to the knowledge of the Corporation, prepared and issued solely by Kevin Reed and Keith Ferrel and their counsel. The Corporation not only does not ratify the releases, but disavows any responsibility for the actions of Messrs Reed and Ferrel and of the contents of the Press Release.
The Corporation advises as follows:
- The Press Release and the May 20th release were issued by Messrs Reed and Ferrel without compliance with the Corporation's Disclosure Policy or consultation with any other director or officer of the Corporation. - The two directors called a first meeting of this purported Special Committee after business on Friday, May 14, 2010 to be held on Sunday, May 16, 2010. Akhil Manro, the Corporation's third independent director who they named as a member of their Special Committee, questioned the existence of any Special Committee, consulted with Borden Ladner Gervais LLP, the Corporation's counsel, and then indicated that he would not attend the meeting without proof that the committee was authorized by the board of directors. Failing receipt of such proof, Mr. Manro did not attend the meeting and has not participated in any of the actions attributed to the Special Committee this past week. - The Corporation is not aware of any evidence that the Special Committee under which authority Messrs Reed and Ferrel purport to act exists. If it does exist, then in their actions Messrs Reed and Ferrel have recklessly overstepped the scope of authority under the mandate they purport to have under such Special Committee, to the Corporation's detriment. During this past weekend the Corporation's counsel advised Messrs Reed and Ferrel and their counsel that they were not aware of any evidence of an appointment of a Special Committee consisting of current Board members and asked that resolutions or minutes of the Board be produced showing a Special Committee had indeed been appointed. No such resolutions or minutes have been produced by Messrs Reed or Ferrel or their counsel and none have been uncovered in a careful review of the Corporation's records since the weekend. - The Press Release contains what it purports to be a mandate of the Special Committee. What Messrs Reed and Ferrel have included in the Press Release is the mandate of a Special Committee consisting of three former independent directors who resigned approximately one year ago. A material part of the mandate that was excluded in the Press Release is the fact that the mandate names these former directors as the appointed members of the Special Committee. Had they included this, it would have shown the reader of the Press Release that this was a mandate of a Committee that did not include current directors, including Messrs Reed and Ferrel, but was a mandate for a former Board committee that has not been active for the past year. - The Press Release includes certain excerpts from a lengthy report that had been prepared by legal counsel to the former Audit Committee of Genesis in May, 2009, which Messrs Reed and Ferrel appear to refer to as an "Interim Report". Messrs Reed and Ferrel have stated in the Press Release that numerous shareholders have made requests of the Special Committee to issue the Interim Report. The Corporation knows of no such requests, other than a few requests made more than a year ago when a press release was issued disclosing that such a report had been prepared. If Messrs Reed and Ferrel actually received such current requests, they should have brought them forward to the Board, or at least to the other independent member that they claim is part of their purported Special Committee. - The reason that the Interim Report and any of its contents have not been released to the public is two-fold: 1. The Interim Report was incomplete and contained reference to unsubstantiated allegations and conclusions and is confidential and subject to solicitor client privilege. Messrs Reed and Ferrel had no authority to waive such privilege on behalf of the board of directors of the Corporation nor to disclose the confidential report. 2. The report had no input of Gobi Singh or others. Mr. Singh and others have every legal right to defend themselves from any claims made against them in the Interim Report, and over the past year have taken steps to do so. The Board members, including Messrs Reed and Ferrel were well aware of the Interim Report and circumstances surrounding the Interim Report at the time they joined the Board. To the knowledge of the other directors of the Corporation, no other facts or actions have occurred over the past year to cause the disclosure of the report to be necessary at this point. - Even if Messrs Reed and Ferrel genuinely believed there was a Special Committee in place when they issued the Press Release, despite all of the evidence to the contrary, the Press Release ought to have disclosed that the other two directors of the Corporation did not agree, and at best this was a matter in dispute. They ought to have further disclosed that the alleged Special Committee had held no meetings and taken no steps or actions in the name of any Special Committee for over one year. The Press Release misleadingly infers that there has been a standing active Special Committee in place since the change of the Board in May, 2009.
The other two directors of the Corporation, Messrs Singh and Manro, have made vigorous attempts to discuss these issues with Messrs Reed and Ferrel since they became aware of the Press Release on Monday. Unfortunately, Messrs Reed and Ferrel have not provided any explanation for their actions, other than to refer to certain communications received in recent weeks from certain minority shareholders indicating their dissatisfaction with the current direction of the Corporation. Messrs Reed and Ferrel did not share these concerns with the other directors. Nonetheless, Messrs Singh and Manro have proposed that the board of directors stick with the plan it had in place prior to the actions of Messrs Reed and Ferrel this week, to call its annual shareholder meeting and to propose to shareholders that a board comprised entirely of independent directors, plus the CEO, be elected at that meeting. That new board of directors would then be in a position to review the Corporation's strategic alternatives, if it saw fit to do so. No explanation has been provided by Messrs Reed and Farrel as to why they have decided to take this week's reckless, unauthorized and unilateral actions and to purport to initiate a strategic review without discussion with management of the Corporation or the other members of the board of directors. Messrs Singh and Manro intend to continue their efforts to understand the objectives of Messrs Reed and Ferrel and intend to take whatever steps are necessary in order to protect the best interests of the Corporation and its shareholders.
Cautionary Statement Regarding Forward-Looking Information
This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), the number of dwelling sites that Genesis will actually develop and sell. Although Genesis believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to Genesis. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking statements. As such, readers are cautioned not to place undue reliance on the forward looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement."
For further information: For further information: please contact Gobi Singh as follows: Gobi Singh, C.E.O., Genesis Land Development Corp., Tel: (403) 265-8079, Toll Free: 1-800-341-7211, Fax: (403) 266-0746, E-Mail: firstname.lastname@example.org, Internet: www.genesisland.com