VARIG's Recovery Plan Bolstered by New York Judge's Decision

VARIG Brazilian Airlines won an important victory in New York's Bankruptcy Court yesterday when Judge Robert Drain extended until May 31st the embargo on the seizure of VARIG aircraft by aircraft leasing companies.

With this significant action, VARIG can continue its financial recovery plan which hopefully may lead to a definitive resolution to the Airline's re-structuring needs in the near future.

"With his decision, which was based on information presented to him at the hearing, Judge Drain has demonstrated once again that our Company is viable and is on course to meet its objectives," said Marcelo Bottini, VARIG's President.

"Furthermore, the Judge's findings are consistent with those of the Brazilian Judge, Roberto Ayoub, overseeing VARIG's Recovery Plan, both of whom have faith that the Company is on the road to financial stability," he added.

Present at the hearings were VARIG's attorneys, Pillsbury Winthrop, as well as representatives of the consulting firm Alvarez & Marshal which is advising VARIG on their re-structuring. In addition, a team from VARIG LOG was also in attendance as an interested party since they have submitted an offer to acquire VARIG for US $400 million.

FMI: www.varig.com