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MOTION FILED FOR APPROVAL OF PBGC/IRS SETTLEMENTS

 MOTION FILED FOR APPROVAL OF PBGC/IRS SETTLEMENTS
 HOUSTON, Aug. 27 /PRNewswire/ -- Continental Airlines has reached


agreement with the Pension Benefit Guaranty Corporation (PBGC) and the Internal Revenue Service (IRS), and today filed a motion in the U.S. Bankruptcy Court in Delaware seeking approval of both settlements.
 Together, the settlement agreements will resolve more than $50 billion of claims against the company, as well as certain pension funding issues, related primarily to the Eastern Air Lines pension plans. Given the size of the claims, the agreements represent a major step toward finalizing the company's plan of reorganization.
 The settlements are contingent on the incorporation of their terms into the final reorganization plan. The PBGC agreement calls for litigation and claims against the company by the PBGC to be dismissed. In exchange, the PBGC will have an allowed $375 million unsecured claim (which will become part of the stock distribution in accordance with the reorganization plan), will receive approximately $20 million in cash on the date the reorganization plan becomes effective, and will have equity interest in 15 aircraft that will be leased back to Continental. The PBGC settlement also provides for Continental to contribute four million shares of the reorganized Continental Airlines' common stock to the Continental Retirement Plan upon reorganization plan confirmation.
 The IRS agreement also settles excise tax claims related to the pension plans, and includes a cash payment of less than $1 million.
 In connection with the settlements, the PBGC and the IRS have agreed that Continental may defer approximately $21 million of pension funding contributions due to the Continental Airlines Retirement Plan in September 1992. That contribution will instead be paid over a 12 month period beginning October 1992. Continental contemplates that payment of the deferred contribution is to be secured by a first lien interest on the Newark-Paris route. The settlement agreements must still be approved by the bankruptcy court.
 -0- 8/27/92
 /CONTACT: Continental Airlines corporate communications, 713-834-5080/ CO: Continental Airlines ST: Texas IN: AIR SU: BCY


TM -- NY078 -- 4159 08/27/92 17:39 EDT
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Publication:PR Newswire
Date:Aug 27, 1992
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