SOURCE: China West, LLC

November 17, 2008 11:01 ET

China West, LLC / China West II, LLC Arbitrations Against Genesis Pharmaceuticals Now Total $13.5 Million

MIAMI, FL--(Marketwire - November 17, 2008) - China West has filed a second arbitration for $7.5 million USD against Genesis Pharmaceuticals (OTCBB: GNPH) for its breach of contract and failure to carry out its obligation under the Genesis Equity Partners operating agreement and contractual obligations.

China West, LLC and China West II, LLC now have a total of $13.5 million in arbitration claims currently pending against Genesis Pharmaceuticals, Inc.

In 2006, Genesis Technology Group, Inc. (GTEC), China West, LLC and Joshua Tan, a director of Genesis, formed GENESIS EQUITY PARTNERS LLC (GEP), a Florida limited liability company, for the purpose of completing private-to-public reverse merger programs for Chinese companies. GTEC owned 51%, China West owned 25% and Tan owned 24% of GEP.

In 2007, GEP entered into an agreement with a Chinese pharmaceutical company known as Laiyang Jiangbo Pharmaceuticals Co. Ltd. (LJP) pursuant to which GEP would fund the legal, accounting and other work necessary to complete a reverse merger with a U.S. publicly traded company. GTEC decided it would be the merger partner for LJP and the reverse merger occurred on October 1, 2007. The reverse merger company was named GENESIS PHARMACEUTICAL ENTERPRISES, INC. GTEC received 25% of the new company. In breach of its contractual and fiduciary duties, Genesis did not distribute to China West its 25% share of the shares GTEC received as provided under the GEP operating agreement. The value of the shares China West was entitled to receive was $7.5 million.

On May 12, 2007 from Beijing, Dr. Shaohua Tan, then a Genesis Director, observed: "I just came back with a signed Contract with our GEP No. 6 partner, Laiyang Jiangbo Pharmaceutical Co., Ltd, for a 30% stake for GEP."

Tan further stated, "With 2006 revenue over RMB713 million ($92.7 million) and profit margin over 16%, this company is one of largest pharmaceutical companies in Northeast China, also, one of the major pharmaceutical companies in China. It is so far the largest GEP partner, about 3 times bigger than Lotus.

"There has been a major effort to close this deal with months of hard work and contributions from our alliance. Considering that the initial offer was only 15%, you can imagine the difficulty to close this deal at a satisfactory conclusion."

China West, LLC, and China West II, LLC is represented by Jeffrey Tew, Esq., Tew Cardenas, 15th Floor Four Seasons Tower, 1441 Brickell Avenue, Miami, FL 33131. Genesis is represented by Benjamin Olive, Esq., Olive & Associates, 2438 E. Las Olas Blvd., Fort Lauderdale, FL 33301.

Certain statements set forth in this press release constitute 'forward-looking statements.' Forward-looking statements including, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words 'estimate,' 'project,' 'intend,' 'forecast,' 'anticipate,' 'plan,' 'planning,' 'expect,' 'believe,' 'will likely,' 'should,' 'could,' 'would,' 'may' or words or expressions of similar meaning. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the company's actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company's ability to grow its business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company's limited operating history, the limited financial resources, domestic or global economic conditions -- especially those relating to China, activities of competitors and the presence of new or additional competition, and changes in Federal or State laws, restrictions and regulations on doing business in a foreign country, in particular China, and conditions of equity markets. More information about the potential factors that could affect the Company's business and financial results is included in the Company's filings, available via the United States Securities and Exchange Commission.

Contact Information

  • Contact:
    Chuck Tamburello
    305-323-5687