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

DEBTORS OBJECTION TO PLAINTIFFS LAWSON ET ALS MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND TO WAIVE TEN (10) DAY WAITING PERIOD PURSUANT TO F.R.B.P. 4001(a)(3) The above-captioned debtors (collectively, the Debtors) hereby submit this Objection (the Objection) to the Plaintiffs Lawson Et Als Motion for Modification of the Automatic Stay and to Waive Ten (10) Day Waiting Period Pursuant to F.R.B.P. 4001(a)(3) (the Motion) filed by T.J. Lawson and Tammy Lawson, James M. Reid and Renee F. Reid, Bennie Skates and Cathy Skates, Robert A. Price, and David Swofford and Karen Swofford, individually and on behalf of a class of persons similarly situated, (collectively, the Class Action Plaintiffs), and T.J. Lawson, Tammy Lawson; individually, and Tammy Lawson as Guardian ad
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. 05-55991; 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. 05-55964; 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.

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Litem for Brandon Lawson, Amber Lawson and Joshua Lawson (Lawsons collectively with the Class Action Plaintiffs, the Movants). In support thereof, the Debtors respectfully represent as follows. Introduction 1. On May 17, 2005 (the Petition Date), the Debtors filed their voluntary petitions for

relief under chapter 11 of the Bankruptcy Code, 11 U.S.C. 101 - 330 (the Bankruptcy Code). 2. On or around August 23, 2005, Movants filed the Motion seeking relief from the

automatic stay. 3. On various dates before the Petition Date, the Movants filed a number of civil and/or

class actions before the Court of Common Pleas in the State of South Carolina captioned as T.J. Lawson and Tammy Lawson, James M. Reid and Renee F. Reid, Bennie Skates and Cathy Skates, Robert A. Price, and David Swofford and Karen Swofford, Individually and on Behalf of a Class of person Similarly Situated vs. Healthtex, Inc., f/k/a Health-Tex, Inc., f/k/a HT Contracting Corporation; Collins & Aikman Corporation, f/k/a C&A Fashion Knits, Inc., and Collins & Aikman Products Co.,; Spartanburg County Industries, Inc.; Chesebrough-Ponds, Inc.; VF Corporation; VF Playwear Inc.; Harold Waddell; Ed Justice; and Ronnie Coggins, Case No. 2003-CP-42-4231 and T.J. Lawson, Tammy Lawson; individually, and Tammy Lawson as Guardian ad Litem for Brandon Lawson, Amber Lawson and Joshua Lawson vs. Healthtex, Inc., f/k/a Health-Tex, Inc., f/k/a HT Contracting Corporation; Collins & Aikman Corporation, f/k/a C&A Fashion Knits, Inc., and Collins & Aikman Products Company; VF Corporation; VF Playwear Inc.; Ed Justice and Ronnie Coggins, Case No. 2004-CP-42-3810 (collectively, the Plaintiffs Actions). 4. Movants have the heavy burden of showing that cause exists, pursuant to section

362(d) of the Bankruptcy Code, to lift the automatic stay with respect to the Plaintiffs Actions. Here, Movants have failed to meet this heavy burden because they have not -- and cannot --

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demonstrate that (1) the lifting of the stay will not affect the administration of these estates; (2) the balance of harms weighs in the Movants favor; and (3) the state court where the Movants propose to litigate has special expertise in dealing with the issues in the Plaintiffs Actions. 5. As set forth more fully below, Movants have ignored the substantial prejudice to the

Debtors that will result should the automatic stay be lifted. More specifically, the significant expenditure of time and resources necessary to defend adequately against the Plaintiffs Actions would divert the attention of the Debtors from the administration of the estate during one of the most critical periods of the Debtors reorganization process. Currently, the Debtors are focusing on the development and negotiation of a business plan and renegotiating contracts with their customers while maintaining current business operations and moving forward on several business initiatives. Allowing the Plaintiffs Actions to proceed will only divert the Debtors attention and limited resources from these critical tasks and impede the Debtors ability to administer their estates. 6. Moreover, because Debtors are involved in approximately one hundred similarly

situated legal actions throughout the country in more than thirty state and federal venues, granting the relief requested by the Movants would open the Pandoras box to countless unwarranted and time-consuming requests for the lifting of the automatic stay. Indeed, in seeking relief from the

automatic stay to litigate the Plaintiffs Actions, Movants are attempting to receive preferential treatment with respect to the myriad of other similarly situated unsecured claimants seeking money damages in pre-petition litigation against the Debtors. 7. Movants also have failed to demonstrate that the hardship to the Movants by

maintenance of the automatic stay outweighs the hardship to the Debtors should the stay be lifted. In fact, Movants have failed to point to any harm to the Movants that will result if the stay is not lifted. At most, Movants provide purported reasons why the Plaintiffs Actions should not be

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removed from the state court in South Carolina. But the issue of removal is not currently before this Court and is irrelevant to the question of whether Movants have shown cause to lift the stay. 8. Finally, Movants have failed to demonstrate that the state court in South Carolina has

special expertise in dealing with the issues in the Plaintiffs Actions, warranting lifting of the stay. The mere fact that Plaintiffs Actions may involve interpretation of state law -- something that bankruptcy and other federal courts handle on a daily basis -- does not constitute cause for lifting of the stay. 9. Accordingly, as set forth more fully below, the Movants have failed to meet the

burden necessary to justify the lifting of the automatic stay, and, as a result, the Debtors respectfully request that the Motion be denied. Argument I. Movants Have Failed to Demonstrate that Cause Exists to Modify the Stay. 10. Movants have failed to demonstrate that cause exists, pursuant to section

362(d) of the Bankruptcy Code, to lift the automatic stay with respect to the Plaintiffs Actions. The decision whether to lift the stay is decided by courts on a case-by-case basis. See In re Laguna Assoc. Ltd. Pship, 30 F.3d 734, 737 (6th Cir. 1994) (Because the Code provides no definition of what constitutes cause under either Section 362(d) or Section 1112(b), courts must determine whether discretionary relief is appropriate on a case-by-case basis.); see also In re Moralez, 128 B.R. 526, 527 (Bankr. E.D. Mich. 1991) (Rhodes, J.) (The decision whether to lift the stay should be made on a case by case basis.). 11. In determining whether cause exists, courts in this and other circuits have

developed a balancing test, which primarily considers the balancing of harms to the parties. See, e.g., In re Expresstrak, L.L.C., No. 03-67235, 2004 Bankr. LEXIS 114, at *23-24 (Bankr. E.D. Mich. Jan. 20, 2004) (citing factors considered by courts in Second, Eighth, and Tenth Circuits to

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balance hardships); In re Holly's, Inc., 140 B.R. 643, 687 n. 70 (Bankr. W.D. Mich. 1992) (noting that courts have developed a balancing test to determine whether cause exists and holding that consideration of harms is appropriate because stay is an automatic injunction); see also In re Udell, 18 F.3d 403, 410 (7th Cir. 1994) (balancing prejudice to debtor and hardship to parties seeking relief from stay); In re Salisbury, 123 B.R. 913, 915 (S.D. Ala. 1990) (same); In re Micro Design, Inc., 120 B.R. 363, 369 (E.D. Pa. 1990) (same); In re Cardinal Indus., Inc., 116 B.R. 964, 983 (Bankr. S.D. Ohio 1990) (determination of whether cause exists is a balancing test with bankruptcy court weighing hardships on parties and basing decision on degree of hardship and overall goals of the Bankruptcy Code) (quoting In re Opelika Mfg. Corp., 66 B.R. 444, 449 (Bankr. N.D. Ill. 1986)); in accord In re Indian River Estates, Inc., 293 B.R. 429, 433 (Bankr. N.D. Ohio 2003) (noting that in determining the existence of cause, courts have applied a balancing test, whereby the interests of the debtor are weighed against the hardships that will be incurred by the creditor-plaintiff); In re New American Food Concepts, Inc., 70 B.R. 254, 258 (Bankr. N.D. Ohio 1987) (applying similar balancing test to determine whether relief from the automatic stay was warranted). 12. In applying the balancing test to determine whether to permit pending pre-

petition litigation to continue, courts in this and other circuits have considered a variety of factors. See, e.g., In re Udell, 18 F.3d at 410 (considering three factors2 to balance harms); Sonnax Industries, Inc. v. Tri Component Products Corp. (In re Sonnax Industries, Inc.), 907 F.2d 1280, 1286 (2d Cir. 1990) (considering twelve factors3 to balance harms); In re Expresstrak, L.L.C., No.

The Udell court considered: (1) the prejudice to the debtor or the bankruptcy estates from allowing the non-bankruptcy litigation to continue; (2) the relative hardship to the debtor and to the party seeking relief; and (3) the creditors probability of success on the merits if the stay is lifted. Id. at 410. The Sonnax court considered: (1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy case; (3) whether the other proceeding involves the debtor as a fiduciary; (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtors insurer has assumed full responsibility for

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03-67235, 2004 Bankr. LEXIS 114, at *24-31 (Bankr. Ed. Mich. Jan. 20. 2004) (listing Sonnax factors and considering seven factors4 to balance harms); In re Johnson, 115 B.R. 634, 636 (Bankr. D. Minn. 1989) (making two determinations5 based on consideration of seven

relevant circumstances).

In determining whether to lift a stay for cause, this Court has

previously held that the Bankruptcy Court should (1) consider the effect of lifting the stay on the administration of the bankruptcy estate; (2) balance the harm to the parties; and (3) consider whether the tribunal where the creditor proposes to litigate has special expertise in dealing with the issues. In re Moralez, 128 B.R. 526, 527-28 (Bankr. E.D. Mich. 1991) (Rhodes, J.). 13. The party seeking relief from the automatic stay bears the initial burden of proof

under section 362(d)(1) of the Bankruptcy Code. As the courts in this circuit have held: The Bankruptcy Code expressly addresses the issue of burden of proof on a motion to lift the automatic stay. Pursuant to section 362(d)(1), the party requesting relief has the initial burden of going forward and, thus, is required to make a showing of cause in support of lifting the stay. In re Laguna Associates Ltd. Pship, No. 92-75390, 1993 WL 730746, *5 (E.D.Mich., Apr. 12, 1993) (citing Sonnax Indus., Inc. v. Iri Component Prods. Corp., 907 F.2d 1280, 1285 (2d Cir. 1990) (noting that [i]f the movant fails to make an initial showing of cause, however, the court should deny relief without requiring any showing from the debtor that it is entitled to continued protection.)); see also Matter of Laguna Associates Ltd. Pship, 147 B.R. 709, 714 (Bankr. E.D.

defending it; (6) whether the action primarily involves third parties; (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is subject to equitable subordination; (9) whether movants success in the other proceeding would result in a judicial lien avoidable by the debtor; (10) the interests of judicial economy and the expeditious and economical resolution of litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) impact of the stay on the parties and the balance of harms. 4 The Expresstrak court considered: (1) judicial economy; (2) deference to original court where litigation has been proceeding for significant period of time; (3) whether litigation in original court has been extensive and court has invested substantial amount of time and energy becoming familiar with factual and legal issues; (4) savings in litigation expense due to location of primary trial counsel; (5) the existence of a contractual agreement between the parties regarding choice of forum for litigation; (6) substantive law applicable to resolution of litigation. The two considerations made by the Johnson court are: (1) whether allowing the litigation to proceed will result in no great prejudice to the debtor and the estate; and (2) whether a balancing of the respective hardships which would result from the grant or the denial of stay relief favors the debtor or the creditor.

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Mich. 1992) (noting that Section 362(d)(1) in effect requires an initial showing of cause by the movant, and Section 362(g) places the burden of proof on the debtor for all issues other than the debtor's equity in property.)(internal citations omitted); In re Elmira Litho, Inc., 174 B.R. 892, 902 (Bankr. S.D.N.Y. 1994) (a creditor seeking relief from the automatic stay may not ignore the requirement that as part of the prima facie case, the movant must demonstrate a factual and legal right to the relief that it seeks); In re Planned Systems, Inc., 78 B.R. 852, 860 (Bankr. S.D. Ohio 1987) (It would be both illogical and inefficient to require the debtor to demonstrate the nonexistence of every conceivable cause for relief under section 362(d)(1).).6 14. Here, for the reasons stated below, the Movants have failed to establish any -- let

alone all -- of the necessary elements to show cause for lifting the automatic stay. Because Movants have failed to meet their burden of proof under section 362(d) of the Bankruptcy Code, Debtors respectfully request that the Movants Motion to lift the automatic stay be denied. A. Movants Have Failed to Demonstrate That Allowing The Plaintiffs Actions To Proceed Will Not Affect the Administration of The Debtors Bankruptcy Estate. As this Court noted in In re Moralez, 128 B.R. 526, 528 (E.D. Mich. 1991) (Rhodes,

15.

J.), the Bankruptcy court should consider the effect of lifting the stay on the administration of the bankruptcy estate. Id. (internal citations omitted). Here, the instant cases represents one of the largest bankruptcy filings in the history of this Court with profound ripple effects on the precarious automotive industry that accounts for the Debtors substantial customer and creditor base. At this early stage in the bankruptcy cases, it is critical that the Debtors, as part of their reorganization efforts, concentrate all of their limited resources on financing their ongoing operations.

Some courts have even held that the already heavy burden of proof on a creditor seeking stay relief is further heightened when the creditor like the Movants here, holds unliquidated, unsecured damage claims. Specifically, the Bankruptcy Court for the Southern District of New York has held that such creditors should not be granted relief from the automatic stay absent a showing of extraordinary circumstances. See In re Keene Corporation, 171 B.R. 180, 185 (Bankr. S.D.N.Y. 1994) (a court will not grant relief from the stay, absent extraordinary circumstances, simply to liquidate an unsecured claim); see also In re Pioneer Commercial Funding Corp., 114 B.R. 45, 47-48 (Bankr. S.D.N.Y. 1990).

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16.

More specifically, from the Petition Date to the date hereof, the Debtors and their

advisors have been focused on activities that are critically important to the Debtors reorganization including, among other things, stabilizing and maintaining day-to-day operations, developing and implementing an overall business plan to serve as the basis for a plan of reorganization, analyzing and negotiating contracts and relationships with the Debtors customers and suppliers, and preparing the Debtors schedules of assets and liabilities and statements of financial affairs. In addition, Debtors must routinely respond to numerous pleadings filed by the unsecured creditors committee and other third parties in these cases. Because of the just-in-time nature of the Debtors business operations with customers and vendors, any potential slip in the Debtors day-today operations will have a widespread impact on the Debtors customer and creditor base. Accordingly, devoting significant time and resources to defending the Debtors interests in the Plaintiffs Actions at this early and vital stage would impede the administration of the Debtors bankruptcy estate. 17. Movants attempt to argue that the lifting of the stay would have no effect on the

administration of the Debtors bankruptcy estate because [a]ssuming the Plaintiffs prevail, they would seek to have their claims addressed by this Court in the context of the Chapter 11 Plan of Reorganization. (Motion at 13.) However, the Movants ignore the fact that the continuation of the Plaintiffs Actions would require the Debtors to expend human and financial resources in defending the Debtors interests in the Plaintiffs Actions -- costs that would drain the Debtors bankruptcy estate of precious and limited resources long before the Plaintiffs ever seek Court approval for any judgment.7

Despite the fact that the Debtors have notified their insurer Liberty Mutual of the claims at issue in Plaintiffs Actions, Liberty Mutual has reserved all rights to withhold coverage. Further, diminishing the Debtors insurance coverage, an estate asset, could negatively affect the administration of these estates.

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18.

Indeed, contrary to Plaintiffs assertions, a significant amount of costly and time-

consuming discovery and pre-trial proceedings have yet to be conducted in Plaintiffs Cases including, inter alia, the completion of class certification briefing and hearing, dispositive motions, additional depositions of both former and current Debtors employees, expert discovery, and trial. Indeed, in a groundwater case such as this involving a facility that had multiple operators over a long period of time, expert discovery can be particularly expensive and time-consuming. Moreover, as little as four days before the Petition Date, Plaintiffs counsel sought additional, burdensome discovery that would involve Debtors employees at the Vice-President level or above, another 30(b)(6) witness, and all persons listed in Collins & Aikmans Answers to Interrogatories dated May 12, 2005. (See letter from Plaintiffs counsel, dated May 13, 2005, attached hereto as Exhibit B, at 3.) Notably, this requested discovery would involve no less than seventeen additional depositions, some of which would include individuals currently devoted to key issues in the Debtors day-to-day restructuring process. (See Collins & Aikmans Answers to Interrogatories, dated May 12, 2005, attached as Exhibit C, at 5.) For example, Plaintiffs deposed Chip Moore, a current Debtors employee, in the Plaintiffs Actions and threatened to re-depose him and other Debtors employees in the near future. (See Exhibit B, at 3.) Mr. Moore is involved on a daily basis with issues affecting the Debtors restructuring efforts, including utilities requests for adequate assurance, lease identification, lease rejection and acceptance issues, coordination of asset sales and overall facilities operations and management. Likewise, among Plaintiffs list of additional deponents is Jay Knoll, the Debtors current General Counsel who is involved with the Debtors restructuring efforts. Forcing these operational personnel and others involved in the Debtors restructuring to engage in costly and time-consuming adversarial litigation will only drain the Debtors already limited resources at the expense of the estate and its other creditors.

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19.

In addition, allowing the stay to be lifted in this case will only open the flood-gates

for more such requests by other litigants seeking to liquidate their unsecured claims against the Debtors. Movants have made no showing whatsoever to establish that Plaintiffs Actions are

anything other than run-of-the mill, unliquidated tort and property damages claims that are no different from the numerous other actions pending against the Debtors. Indeed, the Debtors are involved in approximately one hundred legal actions throughout the country in more than thirty state and federal venues. Such legal actions involve a variety of types of cases, including

employment-related litigation and administrative proceedings, environmental cases, asbestos-related cases, contract disputes, personal injury cases, securities litigation and a number of collection matters. Should the Court grant the Movants Motion, the Debtors would not only face the

immediate distraction caused by the defense of such actions, but, in the meantime the Debtors would also be forced to expend time and resources responding to the inevitable proliferation of other lift stay motions filed by hopeful litigants. 20. Movants rely heavily on this Courts analysis in Moralez to support their argument

that lifting the stay would not harm the Debtors or the administration of the Debtors bankruptcy estate. (Motion at 13-14.) Such reliance is entirely misplaced. Unlike the litigants in Moralez who were individuals (the debtor and his former spouse) in a domestic relations dispute over joint marital debts (In re Moralez, 128 B.R. at 527), Plaintiffs Actions involve class action plaintiffs with multiple claims against the Debtors, who represent the largest corporate bankruptcy filing in the history of this Court. As this Court noted, the issue [in Moralez] is essentially a private issue between the debtor and his former spouse, and does not involve the trustee, any other creditors, or property of the estate. In re Moralez, 128 B.R. at 529. By stark contrast, Plaintiffs Actions

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involve large-scale class action tort and property damages that necessarily implicate other creditors and the property of the estate, as discussed above.8 21. Accordingly, allowing the Plaintiffs Actions to proceed will divert significant

human and financial resources and disrupt the administration of the Debtors bankruptcy estate at this significant stage in the Debtors cases. For this reason alone, Plaintiffs Motion to lift the automatic stay should be denied. B. Movants Have Failed To Demonstrate That Hardship To The Movants Outweighs Hardship To The Debtors. An additional, independent reason to deny Plaintiffs Motion is that the Movants

22.

have failed to demonstrate any harm, let alone any harm that outweighs the hardship to the Debtors, that Plaintiffs will suffer from the maintenance of the automatic stay. Movants provide a laundrylist of purported reasons for why cause exists for lifting the stay, including that (a) litigating the Plaintiffs Actions in this Court would be duplicative of proceedings in state court (Motion at 18); (b) the state court has already invested substantial amount of time with the factual and legal issue surrounding the disputes (id.); (c) the parties have their primary trial counsel concerning [Plaintiffs Actions] in South Carolina (id.); (d) the South Carolina state court has the necessary expertise to interpret the state law claims at issue (id. at 19); and (e) Plaintiffs Actions are close to being ready for trial.9 (Id. at 13.)

The Movants also cite extensively to two other cases, In re Robbins, 964 F.2d 342 (4th Cir. 1992) and In re Expresstrak, L.L.C., No. 03-67235, 2004 Bankr. LEXIS 114 (Bankr. E.D. Mich. Jan. 20, 2004), both of which are equally inapposite. In re Robbins, 964 F.2d 342 (4th Cir. 1992), like Moralez, involved the division of marital assets under state equitable distribution law, an area where it is clear that state courts have special expertise. Id. at 345. In re Expresstrak, L.L.C., No. 03-67235, 2004 Bankr. LEXIS 114 (Bankr. E.D. Mich. Jan. 20, 2004), is equally distinguishable because it involved a contract dispute in which the court sua sponte lifted the stay with the consent of the parties based, in part, on the forum selection clause in the disputed contract. Id. at *29. Movants assertion that the Plaintiffs Actions are close to being ready for trial is directly contrary to the broad requests for additional discovery sought by the Movants from the Debtors just four days before the Petition Date. (See 18 supra.)

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23.

Even assuming that Movants arguments were true -- which the Debtors do not

concede -- none of them evidence harm to the Plaintiffs that will result if the stay remains in effect. Instead, Movants arguments provide purported reasons based on notions of judicial economy why this Court should not remove the Plaintiffs Actions from the state court in South Carolina. However, the Debtors have neither determined whether to seek removal nor have the Debtors sought removal of the Plaintiffs Actions. Simply put, the issue of removal of the Plaintiffs Actions is not the issue before this Court and thus Movants arguments are wholly irrelevant to the Courts present analysis. 24. Indeed, the Debtors have sought and obtained an extension of the time within which

they can determine whether to remove civil actions to federal court (until confirmation of a plan for these cases),10 precisely because making such determinations is not critical at this stage of the Debtors cases and Debtors are fully occupied attending to more pressing matters. Distraction of the Debtors personnel and the use of estate resources to make such determinations is less vital to the success of the Debtors restructuring efforts than the activities described above on which the Debtors and their advisors have been focusing since the Petition Date. 25. Moreover, as the Movants concede, they seek a lifting of the automatic stay for the

limited purpose of permitting the parties to continue the [Plaintiffs Actions] to establish liability and damages. (Motion at 13.) Movants have pointed to no harm that they would suffer as a result of waiting to have their claims liquidated, like so many other parties to litigation with the Debtors, through the claims reconciliation process that will take place in the context of the Debtors cases. Movants thus occupy the shoes of any other unsecured creditor seeking the liquidation of their claims and have no basis to seek preferential treatment from this Court.
10 See Debtors Motion for Order Extending the Period Within Which Debtors May Remove Actions filed July 27, 2005 [Docket No. 800] and Order Extending the Period Within Which Debtors May Remove Actions, dated August 11, 2005 [Docket No. 919].

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26.

Likewise, Movants have failed to demonstrate that any purported hardship resulting

from the maintenance of the stay outweighs the hardship to the Debtors should the stay be lifted. As discussed above, the Debtors will suffer significant prejudice if the automatic stay is lifted. (See 15-19 supra.) Movants have failed to present evidence of harm that outweighs the harm to the Debtors. Accordingly, Plaintiffs Motion should be denied. C. Movants Have Failed to Demonstrate that the State Court has Special Expertise in Dealing with the Plaintiffs Actions. This Court noted that in deciding whether to lift the stay, the Bankruptcy Court

27.

should consider whether the tribunal where the creditor proposed to litigate has special expertise in dealing with the issues, especially when domestic relations are involved or when the intent of a state court order is an issue. In re Moralez, 128 B.R. at 528 (internal citations omitted). Unlike the domestic relations dispute at issue in Moralez, which involved an interpretation of the state courts own judgment (id. at 528-29), the Plaintiffs Actions do not require any special expertise that would warrant lifting of the stay. Indeed, the mere fact that Plaintiffs Actions may involve interpretation of state law -- something that bankruptcy and other federal courts handle on a daily basis -- does not dictate that the state court has special expertise in handling the dispute. If it did, any out-of-state case could justify lifting the stay. 28. Moreover, Movants assertion that the state courts involvement in Plaintiffs

Actions since 2003 warrants a lifting of the stay lacks merit. As noted above, a significant amount of costly and time-consuming discovery and pre-trial proceedings have yet to be conducted in Plaintiffs Cases. (See 18 supra.) Indeed, Plaintiffs counsel sought broad requests for additional discovery just four days before the Petition Date. (See Exhibit B, at 3.) The fact that this case was pending before another court for some time before the stay went into effect does not meaningfully

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distinguish this case from the vast majority of pre-petition cases and cannot possibly justify lifting the stay. II. The Automatic Stay Should Remain Intact to Provide the Proper Breathing Spell to the Debtors as Mandated By the Bankruptcy Laws. 29. In addition to Movants failure to meet their legal burden of demonstrating cause to

lift the stay, substantial policy reasons dictate that the stay remain intact. It is well established that the automatic stay imposed by section 362(a) of the Bankruptcy Code is one of the fundamental debtor protections provided by the bankruptcy laws. Smith v. First Am. Bank (In re Smith), 876 F.2d 524, 525 (6th Cir. 1989), quoting Midlantic Natl Bank v. New Jersey Dept of Envtl. Protection, 474 US. 494, 503 (1986). The stay provision of section 362 gives the debtor a breathing spell and stops all collection efforts, all harassment, and all foreclosure actions. Pertuso v. Ford Motor Credit Co., 233 F.3d 417, 423 (6th Cir. 2000), quoting Javens v. City of Hazel Park, 107 F.3d 359, 363 (6th Cir. 1997); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir. 1983) (the automatic stay permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy). 30. The Debtors in these cases need the breathing spell created by the automatic stay. At

this early stage of the cases, the Debtors must focus their limited resources on developing a strategy for a successful reorganization, without the significant distraction of defending their interests in the Plaintiffs Actions. As noted above, the Debtors and their advisors have been focused on activities that are critically important to the Debtors reorganization. (See 16 supra.) Terminating the automatic stay now to permit the Movants to proceed with the Plaintiffs Actions would strip the Debtors of this desperately needed breathing spell.

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Conclusion 31. 32. For all of the foregoing reasons, the Motion should be denied. WHEREFORE, the Debtors respectfully request an entry of an order, substantially

in the form attached hereto as Exhibit A, (a) denying the relief requested in the Motion and (b) granting such other further relief as is just and proper. Dated: September 9, 2005 KIRKLAND & ELLIS LLP /s/ Marc J. Carmel Richard M. Cieri (NY RC 6062) Citigroup Center 153 East 53rd Street New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 -andDavid L. Eaton (IL 3122303) Ray C. Schrock (IL 6257005) Marc J. Carmel (IL 6272032) 200 East Randolph Drive Chicago, Illinois 60601 Telephone: (312) 861-2000 Facsimile: (312) 861-2200 -andCARSON FISCHER, P.L.C. Joseph M. Fischer (P13452) 300 East Maple Road, Third Floor Birmingham, Michigan 48009 Telephone: (248) 644-4840 Facsimile: (248) 644-1832 Co-Counsel for the Debtors

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EXHIBIT A

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 DENYING RELIEF REQUESTED IN PLAINTIFFS LAWSON ET ALS MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND TO WAIVE TEN (10) DAY WAITING PERIOD PURSUANT TO F.R.B.P. 4001(a)(3) Upon the objection (the Objection)2 of the above-captioned debtors (collectively, the Debtors) to the Plaintiffs Lawson Et Als Motion for Modification of the Automatic Stay and to Waive Ten (10) Day Waiting Period Pursuant to F.R.B.P. 4001(a)(3) (the Motion) filed by the Class Action Plaintiffs and the Lawsons; it appearing that the relief requested in the Objection is in the best interest of the Debtors estates, their creditors and other

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 Objection.

parties in interest; 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 this Objection in this District is proper pursuant to 28 U.S.C. 1408 and 1409; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED 1. 2. The Motion is denied in its entirety. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry. 3. The Court retains jurisdiction with respect to all matters arising from or

related to the implementation of this Order.

Dated: __________________, 2005 United States Bankruptcy Judge

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EXHIBIT B

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