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

************************************ In re: * * Collins & Aikman, et al.1 * * Debtor * ************************************ Chapter 11 Bk. No. 05-55927 (SWR) (Jointly Administered) Hon. Stephen W. Rhodes

TOWN OF FARMINGTON, NEW HAMPSHIRE'S OBJECTION TO ADEQUACY OF DISCLOSURE STATEMENT FOR THE FIRST JOINT PLAN OF COLLINS & AIKMAN CORPORATION AND ITS DEBTOR SUBSIDIARIES Town of Farmington, New Hampshire ("Farmington" or the "Town"), by and through its attorneys, McLane, Graf, Raulerson & Middleton, Professional Association, objects to the Disclosure Statement for the First Joint Plan of Collins & Aikman Corporation and its Debtor Subsidiaries (together the "Debtor") on the grounds that the Disclosure Statement fails to contain adequate information as required by 11 U.S.C. 1125(a)(1) and in furtherance thereof states as follows:

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. 0555959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.), Case No. 0555965; 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. 0555935; 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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BACKGROUND 1. Farmington is the holder of three claims against the Debtor. The first is a

fully secured claim for prepetition unpaid real estate taxes which are secured by a statutory lien. The other two claims arise from environmental conditions on and emanating from real estate owned by the Debtor. Sarah Greenfield Property Claim. 2. Upon information and belief, Collins & Aikman Automotive Interiors

owns and/or operates a manufacturing facility in Farmington ("Plant"). The Debtor has announced its intention to close the Plant in the relatively near future. 3. At the end of 1990, Davidson Textron, Inc. ("Davidson"), a predecessor of

the Debtor entered into that certain Agreement Regarding Final Settlement of Claims Regarding the Sarah Greenfield Property (the "Agreement"). The Sarah Greenfield Property abuts the Plant property and once hosted a public water supply well used by Town residents ("Town Well"). The Agreement also describes the parties' positions at that time as to the contamination of the Plant property and the Sarah Greenfield Property, its aquifer and the Town Well. The Agreement also recites that contaminants including, but not limited to, tetrachloroethylene, trichloroethylene, cis- and trans-dichloroethylene, and vinyl chloride are emanating from the Plant property to the Sarah Greenfield Property, its aquifer and the Town Well. Davidson denied that contamination from the Plant and its property was the source of the contamination of the Sarah Greenfield Property, aquifer and the Town Well. Nevertheless Davidson agreed: (1) to pay $525,000 to defray the cost of installing a temporary, substitute public water supply well for the Town, as reimbursement for the loss of the aquifer and Town Well and, more

importantly, (2) to perform "an adequate and effective Source Remedy Control" as defined in the Agreement and as approved by the State of New Hampshire for the contaminated areas of the Plant and adjacent areas with a commitment that within 30 years, the Town Well would meet all applicable legal standards governing public drinking water supplies, so it could be restored to use as an essential part of the Town's public water supply. The Agreement also contemplates that if the original Source Control Remedy was unlikely to meet the goal more aggressive remedies could be demanded. The efforts currently being made by the Debtor, particularly since the filing of this case, have been insufficient and if they are not improved or worse are terminated the hazardous waste on the Plant property will not be contained and the Sarah Greenfield Propertys contamination will worsen. Cardinal Landfill Claim. 4. Farmington is also the holder of a claim for indemnification arising from

contamination at the so-called Cardinal Landfill ("Cardinal"). Farmington owns property adjacent to the Cardinal Landfill at which it operates a landfill for the Town (the "Town Landfill"). The Town Landfill has only ever accepted municipal solid waste. It has never been used for the disposal of industrial chlorinated solvents or other hazardous substances. The Debtor or one of its subsidiaries has used Cardinal to dispose of chlorinated solvents and other hazardous waste and those contaminates are migrating under the Town Landfill and out to the nearby Cocheco River. The State of New Hampshire has required the Debtor to undertake actions to address the problem. Although the Town reserves the right to assert claims for the cost of the cleanup of the Town Landfill to the extent caused by the Cardinal's contamination, the Town Landfill is

reaching the end of its useful life and it appears at this time it can be closed and capped at no additional expense to the Town. However, should that circumstance change, the Town has reserved its rights to seek contribution and indemnification from the Debtor. OBJECTIONS TO DISCLOSURE STATEMENT 5. The Disclosure Statement and the Plan are unclear in numerous respects

and unless the Disclosure Statement is clarified it is not possible for Farmington to make an informed judgment about the Plan. 6. The Disclosure Statement appears to contemplate that certain real and

other property will be sold prior to the Effective Date of the Plan. The so-called Sale Process contemplates: (i) a going concern sale of the Carpet & Acoustics business in the Debtors' Soft Trim segment; (ii) going concern sales of certain plants or divisions in the Debtors' Plastics business segment and the Debtors' Convertibles business; (iii) an orderly wind-down of the Debtors' non-salable business operations in cooperation with the OEMs; (iv) sales of all remaining assets; and (v) preservation of the Debtors' working capital assets and mitigation of administrative claims and other wind-down costs to the extent possible. Disclosure Statement, p. 37 (emphasis supplied). The Disclosure Statement states that the Sale Process is to be complete in eight months. Disclosure Statement, p. 37. 7. Though the Disclosure Statement suggests in fact it states that all

assets will be sold, it does not indicate whether the Plant will be included in the sales or whether other environmentally contaminated properties like the Cardinal will be sold.2 The Disclosure Statement does not indicate what occurs if the assets have no buyers. The Disclosure Statement does not indicate what happens to assets that cannot be sold. All

these questions should be disclosed as they are critical for Farmington and perhaps other governmental entities to assess the merits of the Plan. The information is also necessary to determine whether the Plan complies with applicable law. 8. The Disclosure Statement is silent as to whether, as required by 28 U.S.C.

959, the Debtor will continue to meet its obligations under the Sarah Greenfield Agreement and as to whether it will continue to address its clean up obligations at Cardinal. If the Debtor were to abandon its efforts to meet its clean-up obligations the hazardous wastes would continue there migration to town properties unabated posing a risk to the public health and safety. The Debtor is obligated by law to continue those efforts. The Disclosure Statement should indicate the Debtor's intentions more clearly. 9. The Disclosure Statement does not indicate who will pay for the clean up

costs on and after the Effective Date. Will the cost be an obligation of the PostConsummation Trust? The Disclosure Statement should be clarified. 10. The Disclosure Statement is unclear as to what assets will be placed in the

Post-Consummation Trust. On page 48 of the Disclosure Statement, it provides: On the Effective Date . . . the Debtors will transfer to the PostConsummation Trust all of their rights, title and interests in all assets of the Debtors that are not divested prior to the Effective Date including, but not limited to, as a result of the Soft-Trim Sales Transaction or any Remaining Sales Transactions that are consummated prior to the Effective Date (the "Residual Assets"). (emphasis supplied). Disclosure Statement, p.48. The definition of Residual Assets contained in the Plan also does not shed any light on the provision because it essentially recites the same language quoted above. Obviously, any property sold prior to the Effective Date cannot

Of course, it seems unlikely that the Debtor could sell Cardinal, even if it attempted to, but the Disclosure Statement suggests otherwise. If assets of this type are not and cannot be sold it is

be transferred. However, will all other properties be transferred? Does the Debtor intend to attempt an abandonment of some properties prior to the Effective Date? Does the term "divest" mean sale and abandonment or just sale? The Debtor should clarify the term "divest". 11. Neither the Post-Consummation Trust Agreement nor the Post-

Consummation Budget is available. The definitions contained in the Plan for these documents do not shed light on their contents. See, Plan, Article I, Section A. It is

unclear whether or to what extent the Post Confirmation Trust intends to take on the clean up costs and/or environmental obligations and whether such activities are budgeted for in the Post-Consummation Trust Budget. This should be clarified. 12. If properties that remain unsold have been transferred to the Post-

Consummation Trust, the Plan is unclear what happens to these properties. Do they revert to the Debtor? Are they abandoned? The Plan is unclear whether abandonment powers will be granted to the Post-Consummation Trust or whether the PostConsummation Trust would have the ability to transfer properties that remain unsold back to the Debtor for subsequent abandonment. The Debtor's intentions should be clarified in this regard.

WHEREFORE, the Town of Farmington respectfully request that this Court:

A.

Deny approval of the Disclosure Statement; and

even more important that the issues noted in this objection be clarified.

B. circumstances. Dated:

Grant such other and further relief as may be just under the

January 18, 2007

Respectfully submitted, McLANE, GRAF, RAULERSON & MIDDLETON, PROFESSIONAL ASSOCIATION By: /s/ Joseph A. Foster Joseph A. Foster, Esq. 900 Elm Street, 11 th Floor P.O. Box 326 Manchester, New Hampshire 03105-0326 Telephone (603) 625-6464 Fax (603) 625-5650 joe.foster@mclane.com Attorneys for Town of Farmington