United Turnaround Hailed As Largest in Corporate America s1

For Immediate Release Contact: Chris Martin 630.670.2745

Kirkland and Ellis Leads United Through Largest Chapter 11 Filing in U.S. History Firm Receives Award from Turnaround Management Association— Chicago/Midwest Chapter

Chicago—January 12, 2006—Of all the businesses adversely affected after the 9/11 terrorist attacks, perhaps none was as hard hit as United Airlines. In addition to dealing with the fall out from 9/11, the Elk Grove Village, Ill.-based airline also dealt with rising fuel prices, the potential SARS pandemic (Severe Acute Respiratory Syndrome) and concern about the war in Iraq. Due to these and other factors, United’s passenger revenues plunged from $16.9 billion in 2000 to 11.9 billion in 2002 and it was spending an average of $10 million in cash per day more than it was taking in. Despite cost cutting moves, debt restructuring and appeals to the federal government for loans, United could not pull out of this tailspin, and in December 2002, the nation’s second largest commercial airline filed petitions for Chapter 11 bankruptcy. At this same time, United hired Chicago’s Kirkland and Ellis as its lead restructuring and turnaround counsel. Kirkland and Ellis embarked on what was to become the largest Chapter 11 filing in U.S. history. In a three-year period, Kirkland and Ellis was successful on several fronts that paved the way for United to emerge from Chapter 11:  Reduced United labor costs by negotiating new collective bargaining agreements with all of United labor unions. This included agreements to eliminate the requirement to maintain a defined benefit plan and pension plans as well as a modified medical plan.  Filed a complaint prohibiting trading by large United stock holders. This allowed United to claim more of its $4 billion in net operating losses that accumulated prior to emergence from bankruptcy.  Restructured debt and lease financings held by United’s aircraft lessors and lenders.  Won three of four favorable rulings in bankruptcy court to avoid paying municipal bond obligations that funded several airport facilities leased by United. “While we used every means available to us in the bankruptcy process, the outcome of this filing was by no means foreordained,” said David Seligman, one of the leaders of the Kirkland and Ellis turnaround team. He said his team not only had to deal with the complex nuances of a large bankruptcy filing but also with factors that were complicating United’s ability to attract commercial airline passengers such as the rising cost of fuel, the emergence of low cost airlines and the drag on airline travel brought on by unexpected events such as the world’s concern about a potential SARS pandemic. After all its work, Kirkland and Ellis was able to save United approximately $7 billion in annual cash savings. “More importantly, United was able to devise a new business plan and propose a Chapter 11 plan in late 2005 and secure a $3 billion exit financing package,” Seligman said. While United’s story is not over and it faces continued challenges, both financially and competitively, its new common stock is now trading at an amount greater than United anticipated, thousands of jobs have been saved and United can re establish itself as a leader in the global airline industry, Seligman said. For its work on the United Airlines turnaround, Kirkland and Ellis will receive an award for Best Turnaround in the Large Company category from the Turnaround Management Association Chicago/Midwest Chapter at its Annual Awards Program on January 12 in Chicago. The Turnaround Management Association (www.turnaround.org) is the only international non-profit association dedicated to corporate renewal and turnaround management. The Chicago/Midwest Chapter of TMA has over 1,000 members and is comprised of turnaround practitioners, attorneys, accountants, consultants, investors, lenders, venture capitalists, appraisers and liquidators. For more information, visit the Chapter’ s web site at www.chicago.turnaround.org or call 815-469-2935.