UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN RE: Chapter 11 COLLINS & AIKMAN CORPORATION,

et al., Debtors. Honorable Steven W. Rhodes GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, Plaintiff, vs. COLLINS & AIKMAN CORPORATION, et al., debtors and debtors-in-possession; CARCORP, INC.; and LEAR CORPORATION, Defendants. Case No. 05-55927-R (Jointly Administered)

Adversary No. ______

GENERAL ELECTRIC CAPITAL CORPORATIONS COMPLAINT FOR DECLARATORY JUDGMENT AND RELATED RELIEF

Plaintiff GENERAL ELECTRIC CAPITAL CORPORATION (GECC or the Plaintiff), a secured creditor and party-in-interest in the jointly administered Chapter 11 cases of Defendant Collins & Aikman Corporation and other affiliated debtors and debtors-inpossession, for its Complaint against the Defendants, alleges as follows by and through its undersigned attorneys: PARTIES, JURISDICTION, AND VENUE 1. Plaintiff GECC is a Delaware corporation and is a secured creditor and

party-in-interest in the above-captioned and referenced jointly administered Chapter 11 cases.

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2.

On May 17, 2005 (the Petition Date), Defendant Collins & Aikman

Corporation and certain of its domestic subsidiaries or affiliates (the Debtors),1 filed voluntary petitions under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101, et seq.), commencing the above-captioned cases (the Bankruptcy Cases). Defendant Carcorp, Inc. is a special purpose corporation and Plaintiff is informed and believes, and therefore alleges, that one hundred percent (100%) of the stock of Carcorp, Inc. is owned by one or more of the Debtors estates. 3. The Bankruptcy Cases are being jointly administered by this Court for

procedural purposes. This Complaint is being filed to commence an Adversary Proceeding in the jointly administered Bankruptcy Cases of all of the Debtors. Further, even though the estates of the Debtors have not been substantively consolidated, Plaintiff is informed and believes, and therefore alleges, that the Debtors are represented by the same counsel and are advised by the

Plaintiff alleges, upon information and belief, that the Debtors in the Bankruptcy Cases are 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., 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 Overseas Investment, Inc. f/k/a Textron Overseas Investment, Inc., Collins & Aikman Automotive Services, LLC, Collins & Aikman Canada Domestic Holding Company, Inc., Collins & Aikman Carpet & Acoustic (MI), Inc., Collins & Aikman Carpet & Acoustic (TN), Inc., Collins & Aikman Development Company, Collins & Aikman Europe, Inc., Collins & Aikman Fabrics, Inc. f/k/a Joan Automotive Industries, Inc., Collins & Aikman Intellimold, Inc. f/k/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 Services, 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. 2
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same consultants and other financial professionals. Accordingly, even if and to the extent that the estates of the various jointly administered Debtors may have separate interests in matters that are the subject of this Complaint, Plaintiff is informed and believes, and therefore alleges, that the joinder of Defendant Debtor Collins & Aikman Corporation provides all of the Debtors the opportunity to assert and protect their interests either by and through Defendant Collins & Aikman Corporation or, if necessary, by requested intervention in the Adversary Proceeding. References in this Complaint to interests of the Debtors include each and all of the Debtors and their respective estates, separately and collectively. 4. Since the Petition Date, the Debtors have continued in possession of their

property and have managed their businesses as debtors-in-possession pursuant to 11 U.S.C. 1107 and 1108. 5. The Debtors are in the business of supplying automotive parts and tooling

to automotive manufacturers and other customers. 6. Pursuant to an Amended and Restated Receivables Purchase Agreement

(as amended from time to time, the RPA) among Debtor Collins & Aikman Products Co. and its wholly owned direct and indirect subsidiaries or affiliates named therein, as seller (the Sellers), and Defendant Carcorp, Inc., as purchaser, the Sellers sold, assigned and transferred to Defendant Carcorp, Inc. all of their right, title and interest in and to the Receivables, the Related Security, the Collections, and the Proceeds (as each term is defined in the document hereinafter identified as the RTA, which itself is defined below). A true and correct copy of the RPA has been filed in the record of the Bankruptcy Cases (see Docket No. 1428); and the RPA is known to all of the Defendants in this Adversary Proceeding. incorporates the RPA by reference in this Complaint. GECC

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7.

Pursuant to a Receivables Transfer Agreement (as amended and

restated, the RTA) among Defendant Carcorp, Inc., as transferor, the Sellers, as sellers and as collection agent, and GECC, as administrative agent and committed purchaser, Defendant Carcorp, Inc. sold, assigned and transferred to GECC, all right, title and interest in and to the Receivables, the Related Security, the Collections, and the Proceeds (collectively, and as each term is defined in the RTA, the Prepetition Receivables); and Defendant Carcorp, Inc. transferred to GECC, as administrative agent, liens and security interests in the Prepetition Receivables. A true and correct copy of the RTA has been filed in the record of the Bankruptcy Cases (see Docket No. 1428); and the RTA is known to all of the Defendants in this Adversary Proceeding. GECC incorporates the RTA by reference in this Complaint. The RPA and the RTA are called separately and collectively the Securitization Documents. Pursuant to the Securitization Documents, GECC owns the Prepetition Receivables (including the Subject Prepetition Receivables owed by Lear, as both of those terms are defined below). The Debtors estates, through their one hundred percent (100%) equity ownership of Defendant Carcorp, Inc., have a residual interest in the Prepetition Receivables (including the Subject Prepetition Receivables owed by Lear) after GECC has been paid in full in accordance with the Securitization Documents. 8. Defendant Lear Corporation (Lear) is a supplier of automotive interiors

and is a supplier and customer of the Debtors. 9. Lear is an account debtor and obligor to the Debtors with respect to certain

unpaid Prepetition Receivables (the Subject Prepetition Receivables). Plaintiff is informed and believes, and therefore alleges, that Lear claims to be a creditor of one or more of the Debtors with respect to matters that are the subject of this Complaint.

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10.

Until all amounts due and owing to GECC under the Securitization

Documents (including the RTA) have been paid in full, GECC is the owner of, among other assets, the Subject Prepetition Receivables and GECC asserts continuing, valid and perfected, first and prior liens on and security interests in, among other assets, all unpaid Subject Prepetition Receivables. 11. As heretofore alleged, the Debtors estates have a residual interest in the

remaining value of the Subject Prepetition Receivables after GECC has been paid in full all amounts owing to GECC under the Securitization Documents (including the RTA). 12. GECC has made demand on the Debtors, in their capacity as collection

agent under the Securitization Documents (including the RTA), to collect the Subject Prepetition Receivables from Lear, and to forward all such collections immediately to GECC in accordance with the Securitization Documents. 13. Lear has failed and refused to pay the Subject Prepetition Receivables to

the Debtors as collection agent or to GECC. 14. GECC alleges, upon information and belief, that Lear asserts adverse

claims or interests (which it may characterize as setoffs, recoupments, or other alleged adverse claims or interests) with respect to the Subject Prepetition Receivables. GECC disputes such adverse claims or interests. 15. The Court has subject matter jurisdiction and jurisdiction over GECC and

all of the Defendants herein. The bases for the Courts jurisdiction include, without limitation, the following: a. This Complaint presents a core proceeding in which the Court has

jurisdiction to enter a final judgment pursuant to 28 U.S.C. 157(b) and 1334.

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b.

GECCs requests for declaratory judgment and other related relief

pursuant to this Complaint arise from and are based upon actual and justiciable controversies within the Courts jurisdiction; and the entry of declaratory judgment is appropriate pursuant to 28 U.S.C. 2201 and Federal Rule of Bankruptcy Procedure 7001, which has been prescribed pursuant to 28 U.S.C. 2075. c. All of the claims which are the subject matter of GECCs

Complaint relate to and affect assets of the Debtors estates, the liquidation and collection of those assets, and the determination and adjustment of debtor-creditor relationships. Among other things, GECCs Complaint asserts GECCs ownership interest in the Prepetition Receivables (including the Subject Prepetition Receivables owed by Lear) under the Securitization Documents, asserts the amount of GECCs claim under the Securitization Documents secured by all of the Prepetition Receivables (including the Subject Prepetition Receivables owed by Lear), and addresses the residual interest of the Debtors estates, and adverse claims or interests alleged by Lear, with respect to the remaining value of the Prepetition Receivables (including the Subject Prepetition Receivables owed by Lear) after GECC has been paid in full under the Securitization Documents. GECC is informed and believes, and therefore alleges, that the Debtors hold, and will continue to hold, a substantial residual interest in the Prepetition Receivables (including the Subject Prepetition Receivables owed by Lear) as assets of their estates after full payment of GECC under the Securitization Documents. Consequently, the Court has jurisdiction over the subject matter of this Complaint, the controversies presented, and the disputing parties. d. Venue is proper in this Court and this District pursuant to 28

U.S.C. 1408 and 1409, because the Debtors Bankruptcy Cases are pending in this District and

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before this Court. ALLEGATIONS PRESENTING THE CONTROVERSIES 16. The Subject Prepetition Receivables owed by Lear were created when

various Debtor entities filled discrete pre-petition purchase orders (individually a Purchase Order, and collectively, the Purchase Orders) sent by Lear for parts and/or tooling. 17. Pursuant to the Securitization Documents (in particular, the RPA), for

good and valuable consideration, the Sellers sold, assigned and transferred all of their right, title and interest in and to the Prepetition Receivables to Defendant Carcorp, Inc. 18. Receivables. 19. Lear had legally sufficient notice of the Sellers sale of the Prepetition Defendant Carcorp, Inc. properly perfected its interests in the Prepetition

Receivables to Defendant Carcorp, Inc. 20. Pursuant to the Securitization Documents (in particular, the RTA), for

good and valuable consideration, Defendant Carcorp, Inc. sold, assigned and transferred all of its right, title and interest in and to the Subject Prepetition Receivables to GECC, as committed purchaser, and GECC owns the Subject Prepetition Receivables as heretofore alleged. Defendant Carcorp, Inc. further granted, and GECC holds, as administrative agent, continuing valid and perfected first priority liens on and security interests in the Subject Prepetition Receivables. 21. GECC, both as committed purchaser and as administrative agent under the

Securitization Documents (in particular, the RTA), properly perfected its interests in the Subject Prepetition Receivables.

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22.

Lear had legally sufficient notice of Defendant Carcorp, Inc.s sale of the

Prepetition Receivables to GECC, as committed purchaser; and Lear had legally sufficient notice that Defendant Carcorp, Inc. granted GECC, as administrative agent, continuing valid and perfected first priority liens on and security interests in the Prepetition Receivables. 23. GECC is owed (computed as of December 22, 2005) approximately $29

million under the Securitization Documents (including the RTA), plus accrued and accruing interest, attorneys fees, costs and other charges recoverable by GECC under the Securitization Documents in an amount to be proved at trial. 24. GECC is informed and believes, and therefore alleges, that approximately

$1,750,000 in the aggregate of Subject Prepetition Receivables, or such greater amount as GECC (or Defendant Collins & Aikman Corporation or any of the other Debtors, by Cross-Claim) may prove at trial, was owed by Lear as of December 22, 2005 and remains unpaid. 25. Until such time as GECC is indefeasibly paid in full all amounts due and

owing to GECC under the Securitization Documents (including the RTA), GECC is entitled to be paid immediately all of the Subject Prepetition Receivables. 26. GECC, as administrative agent and committed purchaser under the

Securitization Documents (in particular, the RTA), has made demand on the Sellers, as collection agent, to perform their contractual duties to collect the Subject Prepetition Receivables on behalf of GECC. The Sellers have failed to collect the Subject Prepetition Receivables, which is a violation of and a default under the Securitization Documents (in particular, the RTA). Accordingly, GECC, as administrative agent, is entitled to exercise all of the rights and remedies provided to a purchaser of accounts under applicable law, which include, but are not limited to, pursuing collection against Lear to collect the Subject Prepetition Receivables. GECC is further

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authorized and entitled to do so by a stipulation with the Debtors dated August 11, 2005 and so ordered by the Court on that same date (see Docket No. 915). 27. Lear has failed and refused to pay the Subject Prepetition Receivables to

the Sellers, to any of the Debtors, or to GECC. 28. GECC is informed and believes, and therefore alleges, that Lear asserts, as

heretofore alleged, adverse claims or defenses to payment of the Subject Prepetition Receivables and that Lear refuses to pay the Subject Prepetition Receivables based upon such alleged claims or defenses. GECC disputes whatever adverse claims or defenses may be alleged by Lear. 29. GECC alleges that any adverse claim or defense alleged by Lear with

respect to the Subject Prepetition Receivables arose (if at all) after Lear had legally sufficient notice of the assignment of the Subject Prepetition Receivables under the Securitization Documents (including, but not limited to, the assignment to GECC under the RTA). 30. GECC asserts that its continuing, valid and perfected interests in the

Subject Prepetition Receivables are prior and superior to all adverse claims or interests that any Defendant alleges with respect to the Subject Prepetition Receivables (including, but not limited to, any adverse claims or defenses to payment alleged by Lear). GECC further demands proof of any adverse claims or interests alleged by any Defendant with respect to the Subject Prepetition Receivables (including, but not limited to, any adverse claims or defenses to payment alleged by Lear). GECC disputes any adverse claims or interests alleged by any Defendant with respect to the Subject Prepetition Receivables (including, but not limited to, any adverse claims or defenses to payment alleged by Lear). GECC also alleges that, under applicable principles of law and/or equity in the Bankruptcy Cases and otherwise, such adverse claims or interests cannot be sustained or enforced either at all or to the prejudice of GECCs rights and interests under the

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Securitization Documents. 31. In light of the foregoing, declaratory relief is needed to determine and rank

the priority of GECCs interests against any competing interests alleged by any of the Defendants (including, but not limited to, any claims or defenses alleged by Lear). Thereupon, GECC is entitled to related relief ordering immediate payment by Lear of all of the Subject Prepetition Receivables to GECC until GECC is indefeasibly paid in full all amounts due and owing to GECC under the Securitization Documents (including the RTA), with any remaining amount of residual value in the Subject Prepetition Receivables then being paid to the Debtors as assets of their estates. FIRST CLAIM FOR RELIEF DECLARATORY JUDGMENT ADJUDICATING AND RANKING THE VALIDITY, PERFECTION, ENFORCEABILITY, AND PRIORITY OF PLAINTIFFS INTERESTS 32. GECC realleges and incorporates by reference all of the allegations

contained in paragraphs 1 through 31 of this Complaint. 33. GECCs interests in the Subject Prepetition Receivables are valid,

perfected, enforceable, and first and prior against all Defendants and all other interests and other adverse claims which any Defendant may allege. 34. GECC is entitled to declaratory judgment adjudicating and ranking its

interests prior to all of the foregoing.

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SECOND CLAIM FOR RELIEF DECLARATORY JUDGMENT ADJUDICATING THE AMOUNT OF SUBJECT PREPETITION RECEIVABLES OWED BY LEAR

35.

GECC realleges and incorporates by reference the allegations of

paragraphs 1 through 34 of this Complaint. 36. Lear owes unpaid Subject Prepetition Receivables as previously alleged

by GECC in this Complaint. 37. GECC is entitled to declaratory judgment adjudicating the amount of

Subject Prepetition Receivables owed by Lear. THIRD CLAIM FOR RELIEF DECLARATORY JUDGMENT ADJUDICATING THE AMOUNT OF PLAINTIFFS CLAIM UNDER THE SECURITIZATION DOCUMENTS (INCLUDING THE RTA) AND THE AMOUNT OF THE DEBTORS RESIDUAL INTEREST IN THE SUBJECT PREPETITION RECEIVABLES AND JUDGMENTS DIRECTING IMMEDIATE PAYMENT OF THE SUBJECT PREPETITION RECEIVABLES ON ACCOUNT OF PLAINTIFFS CLAIM AND THE DEBTORS RESIDUAL INTEREST 38. GECC realleges and incorporates by reference all of the allegations stated

in paragraphs 1 through 37 of this Complaint. 39. As heretofore alleged, GECC is owed (computed as of December 22,

2005) approximately $29 million under the Securitization Documents (including the RTA), plus accrued and accruing interest, attorneys fees, costs and other charges recoverable by GECC under the Securitization Documents in an amount to be proved at trial. 40. The Debtors estates have an interest in the residual value of the Subject

Prepetition Receivables after GECC has been paid in full under the Securitization Documents (including the RTA).

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41.

GECC is entitled to a declaratory judgment adjudicating the amount of its

claim under the Securitization Documents (including the RTA). Thereupon, GECC is entitled to a judgment directing Lear to pay all Subject Prepetition Receivables to GECC until GECC has received full payment of its claim under the Securitization Documents, with any remaining amount of residual value in the Subject Prepetition Receivables then being paid to the Debtors as an asset of their estates. GECC is entitled to have the judgments so entered, in favor of GECC and the Debtors estates, ranked in priority, such that GECC is entitled to full satisfaction of its judgment (including, but not limited to, by collections from or garnishments or executions levied upon Lear, as well as by any funds that the Debtors may receive from Lear on account of any of the Subject Prepetition Receivables) before the Debtors estates receive any residual collections on the judgment in favor of the Debtors estates against Lear. WHEREFORE, GECC respectfully requests that the Court enter judgments as follows: 1. A declaratory judgment adjudicating and ranking Plaintiffs interests in all

of the Subject Prepetition Receivables in controversy, as requested in the Plaintiffs First Claim for Relief; 2. A declaratory judgment adjudicating the amount of Subject Prepetition

Receivables owed by Lear, as requested in the Plaintiffs Second Claim for Relief; 3. A declaratory judgment adjudicating the amount of GECCs claim under

the Securitization Documents (including the RTA) and the amount of the Debtors residual interest in the Subject Prepetition Receivables and, thereupon, judgments directing Lear to pay all Subject Prepetition Receivables to GECC, until GECC has received full payment of its claim under the Securitization Documents, with any remaining amount of residual value in the Subject

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Prepetition Receivables then being paid to the Debtors estates, as requested in the Plaintiffs Third Claim for Relief; 4. Judgment awarding and enabling the Plaintiff to recover its costs and

attorneys fees to the full extent that such charges are recoverable under the bankruptcy laws of the United States or applicable non-bankruptcy law; 5. Ranking of enforcement judgments entered in favor of GECC and the

Debtors estates to ensure GECCs first and prior right to payment in full under the Securitization Documents; and 6. Judgment granting the Plaintiff such other and further relief as is just and

proper under the circumstances of this case. DATED: December 22, 2005 FOLEY & LARDNER LLP

By: /s/ Erin L. Toomey__________________ Judy A. ONeill (P32142) Erin L. Toomey (P67691) 500 Woodward Ave., Suite 2700 Detroit, Michigan 48226-3489 Telephone: (313) 234-7100 Facsimile: (313) 234-2800 etoomey@foley.com -andDavid S. Heller Josef S. Athanas LATHAM & WATKINS LLP 233 South Wacker Drive Sears Tower, Suite 5800 Chicago, Illinois 60606 Telephone: (312) 876-7700 Facsimile: (312) 993-9767

ATTORNEYS FOR GENERAL ELECTRIC CAPITAL CORPORATION 13

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