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

Debtors.
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Chapter 11 Case No. 05-55927-R (Jointly Administered) Tax Identification No. 13-3489233 Honorable Steven W. Rhodes

OBJECTION BY TOWNHALL 4, LLC TO DEBTORS MOTION FOR THE ENTRY OF AN ORDER APPROVING ASSET PURCHASE AGREEMENT FOR THE SALE OF ASSETS AT DEBTORS EVART, MICHIGAN, BELVIDERE, ILLINOIS AND ST. LOUIS, MISSOURI FACILITIES FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES AND OTHER INTERESTS AND RELATED RELIEF Townhall 4, LLC (Townhall) objects to the Debtors Motion for the Entry of an Order Approving Asset Purchase Agreement for the Sale of Assets at Debtors Evart, Michigan, Belvidere, Illinois and St. Louis, Missouri Facilities Free and Clear of Liens, Claims, Encumbrances and Other Interests and Related Relief (Sale Motion). objection Townhall states as follows: In support of its

1 The Debtors in the proposed jointly administered cases include: Collins & Aikman Corporation; Amco Convertible Fabrics, Inc.; Becker Group, LLC (d/b/a Collins & Aikman Premier Mold); Brut Plastics, Inc.; Collins & Aikman (Gibraltar) Limited; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro Corporation); Collins & Aikman Asset Services, Inc.; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.); Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.); Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron Automotive Exteriors, Inc.); Collins & Aikman Automotive Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.); Collins & Aikman Automotive International, Inc.; Collins & Aikman Automotive International Services, Inc. (f/k/a Textron Automotive International Services, Inc.); Collins & Aikman Automotive Mats, LLC; Collins & Aikman Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas Investment, Inc.); Collins & Aikman Automotive Services, LLC; Collins & Aikman Canada Domestic Holding Company; Collins & Aikman Carpet & Acoustics (MI), Inc.; Collins & Aikman Carpet & Acoustics (TN), Inc.; Collins & Aikman Development Company; Collins & Aikman Europe, Inc.; Collins & Aikman Fabrics, Inc. (d/b/a Joan Automotive Industries, Inc.); Collins & Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.); Collins & Aikman Interiors, Inc.; Collins & Aikman International Corporation; Collins & Aikman Plastics, Inc.; Collins & Aikman Products Co.; Collins & Aikman Properties, Inc.; Comet Acoustics, Inc.; CW Management Corporation; Dura Convertible Systems, Inc.; Gamble Development Company; JPS Automotive, Inc. (d/b/a PACJ, Inc.); New Baltimore Holdings, LLC; Owosso Thermal Forming, LLC; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.); Wickes Asset Management, Inc.; and Wickes Manufacturing Company.

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Introduction 1. (a) Townhall files this objection because: the Purchaser under the Sale Motion has not given Townhall adequate assurance that it would be able to perform its duties under the lease between Townhall and Debtors if it were assumed and assigned; and (b) the cure amount listed by the Debtors in the Sale Motion is incorrect. Background 2. On May 17, 2005, Debtors filed their voluntary petitions for relief under chapter

11 of the Bankruptcy Code. 3. 4. On June 11, 2007, Debtors filed the Sale Motion. In the Sale Motion, Debtors seek authority under Section 365 of the Bankruptcy

Code to assume and assign the lease dated August 9, 2004, between Townhall and Debtor Collins & Aikman Products Co. (Debtor) for the property at Lot 4 Townhall Industrial Park, Belvidere, Illinois (Lease) to Ventra Evart, LLC, Ventra Belvidere, LLC, Ventra St. Louis, LLC and Ventra Assembly Company (collectively, the Purchaser). 5. Exhibit C to the Sale Motion is a list of the respective cure amounts for the

agreements to be assumed in connection with the sale. The cure amount that Debtors list for the Lease is $15,971.72. Argument

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6.

Under Section 365(f)(2)(B) of the Bankruptcy Code, Debtors may assign an

unexpired lease only if adequate assurance of future performance by the assignee of such contract is provided. Though Townhall has been in discussion with the Purchaser regarding adequate assurance, Townhall has not been provided with adequate assurance that Purchaser will be able to perform all its duties under the Lease. 7. Section 365(b)(1) of the Bankruptcy Code provides that if there has been a

default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of the assumption the trustee (A) cures such default. Townhall agrees that the $15,971.72 that Debtors listed as the cure amount is due and owing for 2005 real property taxes under the Lease. Townhall notified Debtors that an additional $26,648.73 is also currently due and owing under the Lease for 2006 real property taxes. Debtors informed Townhall that the $26,648.73 would be paid. Townhall has not yet received such payment and therefore objects to the Sale Motion because Debtors proposed cure amount is incorrect. 8. In addition, Debtors have filed a preference complaint (AP# 07-05453) against

Townhall alleging preferential transfers in the amount of $135,087.75 (Townhall Complaint). All of the alleged preferential transfers from Debtors to Townhall were on account of rent payments due under the Lease. If Debtors assume and assign the Lease, then Debtors must dismiss the Townhall Complaint with prejudice in connection with the assumption of the Lease because all of the alleged preferential transfers from Debtors to Townhall were on account of rent payments due under the Lease. 9. Further, Debtors have filed a preference complaint (AP# 07-05023) against

Ericson Construction Company (Ericson) alleging preferential transfers in the amount of -3Detroit_777030_1

$50,981.41 (Ericson Complaint). The preferential transfers were on account of improvements that Ericson made to the premises at the request of Debtor. Under the Lease, Debtor is required to terminate any mechanics liens for material or work claimed to have been furnished to the premises on Debtors behalf and at Debtors request. Debtors payment to Ericson avoided a lien for the requested improvements. Debtor would have been obligated to discharge the lien that Ericson would have filed against the premises or been in default under the Lease. Because of this cure obligation, Debtors should dismiss the Ericson Complaint with prejudice in connection with the assumption of the Lease. RELIEF REQUESTED Townhall requests entry of an Order denying the Sale Motion and granting other relief as this Court determines. BODMAN LLP By: /s/ Robert J. Diehl, Jr. Robert J. Diehl, Jr. (P31264) Ralph E. McDowell (P39235) 6th Floor at Ford Field 1901 St. Antoine Street Detroit, Michigan 48226 Telephone: (313) 259-7777 Facsimile: (313) 393-7579 rdiehl@[Link] Attorneys for Townhall 4, LLC June 19, 2007

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