IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN THE MATTER OF: ) ) COLLINS &

AIKMAN CORPORATION, ) et. al. ) Debtors. ) ) Case No. 05-55927-SWR Chapter 11 (Jointly Administered) Honorable Steven W. Rhodes

LAWSON, ET AL.S SUPPLEMENTAL MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND TO WAIVE TEN (10) DAY WAITING PERIOD PURSUANT TO FRBP 4001(A)(3)

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 (collectively the Environmental Plaintiffs) by and through their undersigned attorneys do hereby request relief from the automatic stay pursuant to 11 U.S.C. Section 362(d)(1) and (2) for modification of the automatic stay issued in this case and to waive the Ten (10) Day waiting Period pursuant to F.R.B.P. 4001(a)(3) and represent as follows: JURISDICTION 1. On May 17, 2005, (the Petition Date) Collins & Aikman Corporation, et al (the

Debtors) filed their voluntary petition under Chapter 11 of the United States Bankruptcy Code (the Bankruptcy Code). This Court has jurisdiction over this matter, which is a core Environmental Plaintiffs proposed Order is

proceeding under 28 U.S.C. 157(b)(2)(G). attached to this Motion as Exhibit 1. 2.

On August 23, 2005, the Environmental Plaintiffs sought relief from the

automatic stay (the Prior Motion). The Environmental Plaintiffs incorporate the Prior Motion

0W[;(%,
0555927080512000000000007

'

herein. That relief was opposed by the Debtors. By order entered on October 27, 2005, the Court denied the relief sought by the Environmental Plaintiffs. 3. The Environmental Plaintiffs have requested that the Debtors consent to the

granting of the relief being requested in this Motion. However, the Debtors have not responded to these requests. Specifically, the Environmental Plaintiffs seek relief from the stay so that they may (a) consummate a settlement with other defendants in their pending litigation relating to the environmental harm caused to their property and persons and (b) continue their action against the Debtors so that they may (i) obtain a determination of liability and the amount of liability as required under the Debtors Plan of Reorganization and (ii) obtain a recovery against any insurance that might be available to compensate the Environmental Plaintiffs for the damages they have suffered pursuant to the Debtors Plan of Reorganization. RELIEF SOUGHT A. The Right to Resolve Differences with Other Non-Debtor Defendants.

There are two pending actions that seek to be resolved but both the South Carolina Courts and the settling defendants have requested a comfort order lifting the stay and allowing the settlement to proceed. Attached to the Prior Motion as Exhibit B is the civil action captioned T.J. Lawson and Tammy Lawson, James M. Reid and Renee F. Feid, 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 v. Healthtex, Inc., f/k/a Health-tex, Inc., f/k/a HT Contracting Corporation; Collins & Aikman Corporation, f/k/a Fashion Knits, Inc., and Collins & Aikman Products Company, Spartanburg County Industries, Inc.; Chesebrough-Ponds, Inc.; VF Corporation, VD Playwear, Inc.,Harold Waddell; Ed Justice; and Ronnie Coggins., Civil Action number 2003-CP-42-4231 on the docket of the Spartanburg County Court (the First

Action). Attached to the Prior Motion as Exhibit C is a copy of the civil action filed in the Court of Common Pleas in the State of South Carolina captioned T.J. Lawson, Tammy Lawson; individually and Tammy Lawson as Guardian ad Litem for Brandon Lawson, Amber Lawson and Joshua Lawson v. Healthtex, Inc., f/k/a Health-tex, Inc., f/k/a HT Contracting Corporation; Collins & Aikman Corporation, f/k/a Fashion Knits, Inc., and Collins & Aikman Products Company, VF Corporation, VF Playwear, Inc., Ed Justice and Ronnie Coggins., Civil Action number 2004-CP-42-3810 on the docket of the Spartanburg County Court (the Second Action). The Environmental Plaintiffs have reached a tentative settlement with all of the defendants (the Settling Defendants) except Collins & Aikman Corporation, f/k/a Fashion Knits, Inc. and Collins & Aikman Products Company (the C&A Defendants). The terms of the settlement are (1) the Settling Defendants will consent to the certification of the class for settlement purposes and the parties will seek permission from the Court of Common Pleas to approve the settlement and disburse the funds pursuant to court authorization, (2) the Settling Defendants shall contribute $280,000 to a fund that will be used to pay the Environmental Plaintiffs, (3) approximately $15,000 of the settlement fund will be allocated to the medical claims and the remaining will be allocated to the property damage claims. Nothing in the settlement, class certification procedure, or authorization of settlement from the Court of Common Pleas shall impact or affect the C&A Defendants. It is fundamental bankruptcy law that the automatic stay does not extend to non-debtor entities. Here, the Environmental Plaintiffs seek a comfort order to allow them to proceed in State Court with the resolution of their actions against the non-debtor defendants.

WHEREFORE, for cause shown pursuant to 11 U.S.C. Section 362(d)(1) and (2), the Environmental Plaintiffs hereby move for an Order modifying the automatic stay to permit actions in State Court to allow them to consummate their settlement with the non-debtor defendants. B. Relief to Proceed Against the C&A Defendants to Determine the Liability of the C&A Defendants and collect against any Insurance Proceeds Available.

The Environmental Plaintiffs seek relief so that they may begin the process that appears to be proposed under the currently pending Plan of Reorganization. In fact, based upon an exchange of discussions between counsel for the Environmental Plaintiffs and counsel for the Debtors, the parties understanding of the Plan has been confirmed, the Environmental Plaintiffs have voted for the Plan, and the Debtors consent to allowing the Environmental Plaintiffs to begin to operate as if the Plan has been confirmed. Specifically, under the Plan of Reorganization, Section IV.G speaks of distributions to allowed insured claims and proceeds of insurance that are used to make payment on a claim reduce the claim against the estate. Further, an insured claim is any claim arising from an occurrence prior to the effective date that is covered under an insurance policy, other than workers compensation. See the Plan, at page 7. Further support for this reading is found in the process for objections to claims. In that paragraph, the Debtor objects to all Tort Claims but the Tort Claims become an Allowed Claim by a Final Order. See the Plan paragraph VII.A.1., page 29. Final Order includes Orders from any court of competent jurisdiction. See Plan, page 6, definition of Final Order. Thus, the Debtors intentions under the plan are to allow First Action and Second Action to proceed outside of the Plan to bring to a conclusion the Environmental Claims on behalf of our clients. The Environmental Plaintiffs would be entitled to collect from insurance first and

then to the extent the Claim is not satisfied from insurance, through the debtors plan of reorganization in the form of stock and a pro rata share of any funds developed through the litigation trust. The Environmental Plaintiffs are aware that the Plan also provides for some releases. Specifically, the Plan is deemed to forever release, waive and discharge all claims (including Derivative Claims) causes of action and any other debts, obligations, rights, suits, damages, actions ... whether known or unknown ... that are based in whole or in part on any act, omission, transaction or other occurrence taking place on or prior to the Effective Date in any way relating to a Debtor, the Chapter 11 Cases or the Plan that such Person has, had or may have against any Debtor Releasee or Releasing Party. Plan p. 37. This portion of the Plan appears to provide for a limited release of the Tort Claims and a limited injunction to prevent the prosecution of the Tort Claims. This limitation is just to the Debtor Releasees and the Releasing Parties. Debtor Releasees are limited to the release of just officers, directors, and employees after November 1, 2006, the professionals and the Releasing Parties. See Plan, at page 3-4. Releasing Parties are the Creditors Committees and other entities participating in the reorganization. See the Plan, at page 12. Neither the First Action nor the Second Action are against these Debtor Releasees and the Releasing Parties. Thus, neither the release provided for in the Plan nor the injunction imposed by the Plan will affect either the First Action or the Second Action. Therefore, the Plan specifically provides for the prosecution of the First Action and Second Action in State Court. The Debtor does not propose any other adequate protection for the Environmental Plaintiffs and in fact the Debtor consents to the modification from the automatic stay being requested by the Environmental Plaintiffs.

WHEREFORE, for cause shown and for lack of adequate protection pursuant to 11 U.S.C. Section 362(d)(1) and (2), the Environmental Plaintiffs hereby move for an Order modifying the automatic stay to permit the continuation of the actions in State Court against the C&A Defendants to allow the Environmental Plaintiffs to determine the liability of the C&A Defendants and to collect from any insurance proceeds that may be available to pay for the claims of the Environmental Plaintiffs. BERNARDI, RONAYNE & GLUSAC, P.C. Dated: May 12, 2008 /s/Rodney M. Glusac Local Counsel for Environmental Plaintiffs 1058 Maple Street, Suite 100 Plymouth, MI 48170 (734) 416-1780 rodg@brgpc.com (P43756) - and FINKEL LAW FIRM, L.L.C. Richard R. Gleissner Attorneys for Environmental Plaintiffs District Court ID No. 5389 Post Office Box 1799 1201 Main Street, Suite 1800 Columbia, South Carolina 29202 (803) 765-2935

IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN THE MATTER OF: ) ) COLLINS & AIKMAN CORPORATION, ) et. al. ) Debtors. ) ) Case No. 05-55927-SWR Chapter 11 (Jointly Administered) Honorable Steven W. Rhodes

ORDER GRANTING LAWSON, ET AL.S SUPPLEMENTAL MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND TO WAIVE TEN (10) DAY WAITING PERIOD PURSUANT TO FRBP 4001(A)(3) Creditors 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 (collectively the Environmental Plaintiffs) having filed their Supplemental Motion for Modification of the Automatic Stay and to Waive Ten (10) Day Waiting Period Pursuant to FRBP 4001(A)(3) (the Motion); the Environmental Plaintiffs having properly served the Motion; no objections to the Motion having been timely filed; and the Court being duly advised in the premises: IT IS ORDERED that the Motion is granted. IT IS FURTHER ORDERED that the Environmental Plaintiffs may (a) consummate a settlement with other defendants in their pending litigation filed in the Court of Common Pleas in the State of South Carolina, captioned T.J. Lawson, Tammy Lawson; individually and Tammy Lawson as Guardian ad Litem for Brandon Lawson, Amber Lawson and Joshua Lawson v. Healthtex, Inc., f/k/a Health-tex, Inc., f/k/a HT Contracting Corporation; Collins & Aikman Corporation, f/k/a Fashion Knits, Inc., and Collins & Aikman Products Company, VF Corporation, VF Playwear, Inc., Ed Justice and Ronnie Coggins., Civil Action number 2004CP-42-3810, and (b) continue their action in that litigation against the Debtors so that they may

(i) obtain a determination of liability and the amount of liability as required under the Debtors Plan of Reorganization and (ii) obtain a recovery against any insurance that might be available to compensate the Environmental Plaintiffs for the damages they have suffered pursuant to the Debtors Plan of Reorganization. IT IS FURTHER ORDERED that the stay under Fed. R. Bankr. P. 4001(a)(3) is waived.

IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN THE MATTER OF: ) ) COLLINS & AIKMAN CORPORATION, ) et. al. ) Debtors. ) ) Case No. 05-55927-SWR Chapter 11 (Jointly Administered) Honorable Steven W. Rhodes

NOTICE OF LAWSON, ET AL.S SUPPLEMENTAL MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND TO WAIVE TEN (10) DAY WAITING PERIOD PURSUANT TO FRBP 4001(A)(3) Please take notice that Creditors 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 (collectively the Environmental Plaintiffs) have filed their Supplemental Motion for Modification of the Automatic Stay and to Waive Ten (10) Day Waiting Period Pursuant to FRBP 4001(A)(3), in which they seek relief from the stay so that they may (a) consummate a settlement with other defendants in their pending litigation relating to the environmental harm caused to their property and persons and (b) continue their action against the Debtors so that they may (i) obtain a determination of liability and the amount of liability as required under the Debtors Plan of Reorganization and (ii) obtain a recovery against any insurance that might be available to compensate the Environmental Plaintiffs for the damages they have suffered pursuant to the Debtors Plan of Reorganization. Your rights may be affected. You should read these papers carefully and discuss them with your attorney, if you have one. If you do not want the Court to grant the Motion or if you want the Court to consider your views on the Motion, within 15 days, you or your attorney must: 1. File with the Court a written objection to the Motion, explaining your position, at: 1 U.S. Bankruptcy Court 211 W. Fort Street, Suite 2100 Detroit, Michigan 48226 If you mail your response to the court for filing, you must mail it early enough so that the court will receive it on or before the date stated above.

Response or answer must comply with F. R. Civ. P. 8(b), (c) and (e)

You must also mail a copy to: Rodney M. Glusac, Esq. Attorneys for Environmental Plaintiffs Bernardi, Ronayne & Glusac, P.C. 1058 Maple Street, Suite 100 Plymouth, MI 48170 (734) 416-1780 2. If an objection is timely filed and served, the clerk will schedule a hearing on the Motion and you will be served with a notice of the date, time and location of the hearing.

If you or your attorney do not take these steps, the Court may deem that you do not oppose the Motion, in which event the hearing will be canceled, and the motion granted. BERNARDI, RONAYNE & GLUSAC, P.C.

/s/Rodney M. Glusac Attorneys for Environmental Plaintiffs 1058 Maple Street Suite 100 Plymouth, MI 48170 (734) 416-1780 rodg@brgpc.com (P43756) Dated: May 12, 2008

IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN THE MATTER OF: ) ) COLLINS & AIKMAN CORPORATION, ) et. al. ) Debtors. ) ) Case No. 05-55927-SWR Chapter 11 (Jointly Administered) Honorable Steven W. Rhodes

CERTIFICATE OF SERVICE I certify that on May 12, 2008, I electronically filed LAWSON, ET AL.S SUPPLEMENTAL MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND TO WAIVE TEN (10) DAY WAITING PERIOD PURSUANT TO FRBP 4001(A)(3) and the Notice of the Motion (the Pleadings) with the Clerk of the Court using the ECF system which will send notification of such filing to all attorneys of record listed on the Courts ECF system for this case.

BERNARDI, RONAYNE & GLUSAC, P.C. Dated: May 12, 2008 /s/Rodney M. Glusac Attorneys for Movants 1058 Maple Street, Suite 100 Plymouth, MI 48170 (734) 416-1780 rodg@brgpc.com (P43756)