IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS & AIKMAN CORPORATION,

et al. 1 Debtors. ) ) ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes

ORDER AUTHORIZING THE WIND-DOWN OF THE DEBTORS FABRICS BUSINESS AND CERTAIN RELATED ACTIONS IN CONNECTION THEREWITH Upon the motion (the Motion) 2 of the above-captioned debtors (collectively, the Debtors) for the entry of an order authorizing the wind-down of the Fabrics Business and certain related actions in connection therewith [Docket No. 2746]; it appearing that the relief requested is in the best interest of the Debtors estates; it appearing that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; it appearing that this proceeding is a core proceeding pursuant to 28 U.S.C. 157(b)(2); it appearing that venue of this proceeding and
1 The Debtors in the jointly administered cases include: Collins & Aikman Corporation; Amco Convertible Fabrics, Inc., Case No. 05-55949; Becker Group, LLC (d/b/a/ Collins & Aikman Premier Mold), Case No. 05-55977; Brut Plastics, Inc., Case No. 05-55957; Collins & Aikman (Gibraltar) Limited, Case No. 05-55989; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro Corporation), Case No. 05-55952; Collins & Aikman Asset Services, Inc., Case No. 05-55959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.), Case No. 05-55965; Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.), Case No. 0555991; Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron Automotive Exteriors, Inc.), Case No. 05-55958; Collins & Aikman Automotive Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.), Case No. 05-55956; Collins & Aikman Automotive International, Inc., Case No. 05-55980; Collins & Aikman Automotive International Services, Inc. (f/k/a Textron Automotive International Services, Inc.), Case No. 05-55985; Collins & Aikman Automotive Mats, LLC, Case No. 05-55969; Collins & Aikman Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas Investment, Inc.), Case No. 05-55978; Collins & Aikman Automotive Services, LLC, Case No. 05-55981; Collins & Aikman Canada Domestic Holding Company, Case No. 05-55930; Collins & Aikman Carpet & Acoustics (MI), Inc., Case No. 05-55982; Collins & Aikman Carpet & Acoustics (TN), Inc., Case No. 05-55984; Collins & Aikman Development Company, Case No. 05-55943; Collins & Aikman Europe, Inc., Case No. 05-55971; Collins & Aikman Fabrics, Inc. (d/b/a Joan Automotive Industries, Inc.), Case No. 05-55963; Collins & Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.), Case No. 05-55976; Collins & Aikman Interiors, Inc., Case No. 05-55970; Collins & Aikman International Corporation, Case No. 05-55951; Collins & Aikman Plastics, Inc., Case No. 05-55960; Collins & Aikman Products Co., Case No. 05-55932; Collins & Aikman Properties, Inc., Case No. 0555964; Comet Acoustics, Inc., Case No. 05-55972; CW Management Corporation, Case No. 05-55979; Dura Convertible Systems, Inc., Case No. 05-55942; Gamble Development Company, Case No. 05-55974; JPS Automotive, Inc. (d/b/a PACJ, Inc.), Case No. 05-55935; New Baltimore Holdings, LLC, Case No. 05-55992; Owosso Thermal Forming, LLC, Case No. 05-55946; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset Management, Inc., Case No. 05-55962; and Wickes Manufacturing Company, Case No. 05-55968. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Motion.

K&E 11162842.7

0W[;&&!

0555927060601000000000003

#V

the Motion in this District is proper pursuant to 28 U.S.C. 1408 and 1409; it appearing that notice of the Motion and the opportunity for a hearing on the Motion was appropriate under the particular circumstances and that no other or further notice need be given; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED 1. 2. The Motion is granted as set forth herein. The Benefits Plan is approved in its entirety and the Debtors are authorized to

enter into agreements substantially in the form of Exhibit B to the Motion with employees eligible for the Benefits Plan. 3. their entirety. 4. 5. The Modified De Minimis Asset Sales Authority is approved in its entirety. Any use of proceeds of the Fabrics wind-down by the Debtors shall be deemed a The Rejection Procedures and the Assume/Assign Procedures are approved in

use of Cash Collateral for purposes of this Courts Final Order (I) Authorizing Debtors (A) to Obtain Post-Petition Financing Pursuant to 11 U.S.C. 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) and 364(e) and (B) to Utilize Cash Collateral Pursuant to 11 U.S.C. 363 and (II) Granting Adequate Protection to Pre-Petition Secured Parties Pursuant to 11 U.S.C. 361, 362, 363 and 364 dated July 28, 2005. 6. The Debtors shall use their reasonable best efforts to minimize the prepetition and

postpetition Breach Claims (as defined below), if any, from the Fabrics Business customers (the Customers), including by requesting agreement from such Customers to waive such Breach Claims. Breach Claims shall include Customers claims for any damages incurred by the

Customers in connection with the wind-down of the Fabrics Business.

2
K&E 11162842.7

7.

The Debtors shall use their reasonable best efforts to wind-down the Fabrics

Business in a manner that is consistent with the timing set forth i the production forecast n provided to the Committee and the agents to the prepetition and postpetition senior, secured lenders dated May 31, 2006 (the Production Forecast) and no later than June 2, 2006, the Debtors shall send written notice to (a) each Customer listing the date of the end of production in the Production Forecast for each style name by model for such Customer and (b) each vehicle manufacturer receiving goods from the Fabrics Business listing the date of the end of production in the Production Forecast for each style name by model for such goods; provided, that to the extent a Customer or Customers request the Fabrics Business to deliver additional goods for a program after the time such program is scheduled to terminate in the Production Forecast (a Request), the Debtors will consider the Request only if the Customer commits to provide the Debtors with compensation for all costs to be incurred by the Debtors in connection with the continued production of such goods after the date such program is scheduled to terminate, including all additional costs to maintain the operations of the Fabrics Business, on account of such Request (the Additional Costs). 8. The Debtors shall (a) participate in weekly conference calls with the Committee

and the agents to the prepetition and postpetition senior, secured lenders regarding the progress of the wind-down of the Fabrics Business and whether the wind-down is consistent with the timing set forth in the Production Forecast and (b) provide the Committee and the agents to the prepetition and postpetition senior, secured lenders with good faith estimates of program termination dates and Additional Costs relating to any deviations from the Production Forecast. The Committee and each such agent reserve their rights to seek leave of this Court to compel the immediate termination of any program beyond the time contemplated in the Production Forecast

3
K&E 11162842.7

in the event the Committee or such agent reasonably believes that any deviation from the Production Forecast are unreasonable, and the Debtors and all other parties reserve their rights with respect thereto. 9. The Order shall not prejudice the rights of any parties (including, without

limitation, the Debtors, the Committee and the prepetition and postpetition senior, secured lenders) with respect to any future amendments to the DIP Agreement. 10. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Motion, including, without limitation, actions necessary or appropriate pursuant to the Wind-Down Authority. 11. Notwithstanding the 10-day objection period provided for in the Rejection

Procedures and the Assume/Assign Procedures, should the Debtors seek to reject or assume and assign the lease entered into between the Debtors and Fabric (DE) GP on June 27, 2002 (the Lease), Fabric (DE) GP shall have 15 days after the Debtors serve the relevant notice of rejection or assumption and assignment of the Lease to file an objection to such rejection or assumption and assignment. 12. Subject to agreement between the Debtors and General Electric Capital

Corporation (GECC) or further order of the Court, nothing herein shall authorize the Debtors to take any actions contrary to the terms of the Products Leases (as defined in the Limited Objection of GECC [Docket No. 2765]). All parties reserve their rights with respect to the Products Leases and the equipment subject to the Products Leases. 13. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry notwithstanding Bankruptcy Rules 6004(h) and 6006(d).

4
K&E 11162842.7

14.

The Court retains jurisdiction with respect to all matters arising from or related to

the implementation of this Order.

.

Entered: June 01, 2006 _ __ _/s/ Steven Rhodes _ _ Steven Rhodes 15. Chief Bankruptcy Judge 16.

5
K&E 11162842.7