As reported in the Company's FORM 10-Q for the quarter ending September 31, 2007, the court entered an order approving the settlement of these actions, for a total of $5,950,000, on a preliminary basis and setting a final approval hearing for November 9, 2007. As previously disclosed, the Company has finalized a settlement of its pending action against its former director and officer insurer, Genesis Insurance Company (“Genesis”). The settlement provides for a payment to the Company of approximately $1.5 million.

According to the Company’s FORM 10-K for the fiscal year ended December 31, 2005, on February 3, 2004, Holdings notified the court hearing the consolidated action of the Company’s January 30, 2004 bankruptcy filing staying the litigation against Holdings. The parties have engaged in several mediation sessions and continue to engage in settlement discussions. Since confirmation of the Plan of Reorganization, the Bankruptcy Court has entered an order subordinating claims arising from these class action proceedings to general unsecured claims. The Plan of Reorganization provides that subordinated claims receive no distribution; therefore the Company has no liability for these claims.

Plaintiffs filed a single consolidated amended class action complaint in August 2003. Before any response thereto was made by any defendant, plaintiffs filed a second consolidated amended class action complaint in October 2003. The second consolidated amended class action complaint in October 2003 superseded and replaced all prior complaints and alleged: (i) violation of Sections 10(b) and 20(a) of the Exchange Act against Holdings and six of its current or former officers or directors on behalf of all persons who purchased or otherwise acquired the Old Common Stock of Holdings between April 18, 2000 and October 15, 2002, inclusive and (ii) violation of Sections 11 and 15 of the Securities Act against Holdings, four of its former officers or directors and Morgan Stanley Dean Witter on behalf of all persons who purchased or otherwise acquired Atlas’ Old Common Stock issued in the September Secondary Offering. Each defendant moved to dismiss the second consolidated amended class action complaint on or about December 17, 2003.

Seven putative class action complaints have been filed against Holdings and several of its former officers and former directors in the United States District Court for the Southern District of New York. On May 19, 2003, these seven class actions were consolidated into one proceeding. A lead plaintiff and a lead counsel were appointed by that court.

The original Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 18, 2000 and October 15, 2002, thereby artificially inflating the price of Atlas Air securities. Throughout the Class Period, as alleged in the complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's net income and financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that, throughout the Class Period, the Company had materially overstated its inventory, maintenance expense, and allowance for bad debt; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On October 16, 2002, before the market opened for trading, the Company shocked the market by announcing that it will be initiating a re-audit of its financial results for fiscal years 2000 and 2001, which will require the Company to restate its previously-issued financial reports. The Company described the overstatement as being in "the areas of inventory obsolescence, maintenance expense, and allowance for bad debt." The Company further stated that "preliminary indications are that the cumulative impact through 2001 will reduce after-tax income by roughly $60 million to $65 million." Following this report, shares of Atlas Air fell $.79 per share, to close at $1.80 per share, on volume of more than 1.7 million shares traded, or almost ten times the average daily volume.