UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

In re:

Chapter 11

Collins & Aikman Corporation, et al. Debtors.

Case No. 05-55927 (Jointly Administered) Honorable Steven W. Rhodes

_________________________________/ DOTT INDUSTRIES, INC.S OBJECTION TO DEBTORS NOTICE OF RECLAMATION CLAIMS DEBTORS DEEM TO BE VALID Dott Industries, Inc. (Dott Industries) states: Background 1. Dott Industries is a supplier of parts to the automotive industry. It was a pre-

petition supplier to the Debtors. 2. Between May 9, 2005 and May 17, 2005, Dott Industries delivered $38,036.44

worth of goods to the Debtors. 3. On May 17, 2005, the Debtors filed for bankruptcy under Chapter 11 of the

Bankruptcy Code (the Petition Date). 4. On May 25, 2005, Dott Industries made a written reclamation demand in the

amount of $38,036.44 in compliance with 2-702 of the Uniform Commercial Code and 11 U.S.C. 546(c)(1) (the Reclamation Demand). See Reclamation Demand, Exhibit B. 5. On June 9, 2005, this Court entered an Order (A) Establishing Procedures for

Treatment of Valid Reclamation Claims and (B) Prohibiting Third Parties from Interfering with Delivery of Debtors Goods (the Reclamation Order). 6. The Reclamation Order provides for, among other things, the following:

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(1) Any vendor asserting a claim for reclamation must satisfy all requirements entitling it to a right of reclamation under state and bankruptcy law; (2) By September 7, 2005, the Debtors shall file and serve on parties in interest a notice (the Reclamation Notice) that contains the name of the reclamation claimant, the date the claim was received, the amount of the claim, the amount that the Debtors believe to be invalid, and the basis for such belief. (3) All parties in interest have the right to object to the Reclamation Notice; (4) The Debtors shall maintain and preserve all records relating to the determination of the validity and extent of reclamation claims; (5) Any reclamation claim that the Debtors included in the Reclamation Notice and that is not objected to shall be deemed a valid reclamation claim allowed by the Court in the amount set forth in the Reclamation Notice; (6) All valid reclamation claims shall be deemed an allowed administrative expense claims of the Debtors estate under 503(b) of the Bankruptcy Code; and (7) All parties reserve their rights as to the effect of pre-petition liens on otherwise valid reclamation claims. 7. On September 7, 2005, the Debtors filed and served the Reclamation Notice.

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8.

In the Reclamation Notice, the Debtors asserted that only none of Dott Industries

Reclamation Demand is valid. 9. The Debtors asserted that $23,120.00 of the Reclamation Demand is invalid

because this amount of the goods delivered were allegedly not in the Debtors possession at the time Dott Industries made its Reclamation Claim as a result of the Debtors consumption or conversion of these goods prior to their receipt of the Reclamation Demand. 10. Also in the Reclamation Notice, the Debtors asserted that $2,324.15 of the

Reclamation Demand is invalid because either (i) the goods were delivered more than the applicable number of days before the receipt of the reclamation demand or (ii) the goods were delivered after the Petition Date. 11. Debtors Assert that they paid for $1,743.11 of the products supplied by Dott

Industries. Dott Industries admits receiving certain payments, although does not believe that those payments are property allocated towards the reclamation goods. 12. Debtors also assert that the demand period for the goods expired at $10,849.18 of

product delivered by Dott Industries. Dott Industries Objection to the Reclamation Notice 13. Under 11 U.S.C. 546(c), the rights and powers of a trustee are subject to any

statutory or common-law right of a seller of goods that has sold goods the debtor, in the ordinary course of such sellers business, to reclaim such goods if the debtor received such goods while insolvent, but -(1) such seller may not reclaim any such goods unless such seller demands in writing reclamation of such goods --

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(A)

before 10 days after receipt of such goods by the debtor; or

(B)

if

such

10-day

period

expires

after

the

commencement of the case, before 20 days after receipt of such goods by the debtor. 14. In our case, the Debtors have objected to $13,173.33 of the Reclamation Demand

on the basis that these goods were delivered more than the applicable number of days before the receipt of the reclamation demand or because the goods were delivered after the Petition Date. This is incorrect. All of Dott Industries goods reflected in the Reclamation Demand were delivered on or before the Petition Date. Furthermore, Dott Industries made its Reclamation Demand for goods it delivered to the Debtors between May 9, 2005 and May 11, 2005. The 10 day period for Dott Industries to make a demand on these goods expired May 19, 2005 at the earliest, which is after the Petition Date. Accordingly, Dott Industries had 20 days under 11 U.S.C. 546(c)(1)(B) to make its Reclamation Demand for the goods it delivered to the Debtors between May 9, 2005 and May 17, 2005. The Reclamation Demand was made on May 20, 2005, which is within 20 days of May 9, 2005. Therefore, the Debtors claim that $13,173.33 of the Reclamation Demand is invalid is incorrect and must be objected to. 15. Finally, Dott Industries objects to the Debtors claim that because $23,120.00

worth of goods reflected in the Reclamation Demand was no longer in the Debtors possession on May 25, 2005, the Reclamation Demand is invalid to this extent. The Debtors have

possession of all records relating to the determination, validity and extent of all reclamation claims. Despite this fact, the Debtors have attached no documentary evidence to the

Reclamation Notice that would provide any basis for claiming $81,150.60 of the Reclamation

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Demand is invalid. Because the Debtors provided not documentary evidence to the Reclamation Notice, Dott Industries objects to its treatment under the Reclamation Notice. WHEREFORE, Dott Industries, Inc. respectfully requests that this Honorable Court grant enter an order (i) deeming Dott Industries, Inc. as having a valid reclamation claim allowed by this Court in the amount of $38,036.44 and (ii) granting Dott Industries, Inc. an allowed administrative expense claim of the Debtors estates under 503(b) of the Bankruptcy Code in the amount of $38,036.44. Respectfully Submitted, Schafer and Weiner, PLLC

By:

Dated: September 27, 2005

/s/ Max J. Newman Max J. Newman (P51483) 40950 Woodward Ave., Ste. 100 Bloomfield Hills, MI 48304 (248) 540-3340 mnewman@schaferandweiner.com COUNSEL FOR DOTT INDUSTRIES, INC.

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