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

STATEMENT OF KZC SERVICES, LLC AND JOHN R. BOKEN REGARDING APPOINTMENT OF FEE EXAMINER

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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KZC Services, LLC and John R. Boken (collectively, KZCS),2 hereby submits this statement (the Statement) at the Courts request regarding the appointment of a fee examiner in these cases. In support of this Statement, KZCS respectfully states as follows: I. STATEMENT OF POSITION At the time the Debtors filed Chapter 11, they faced a severe liquidity crisis, operational dysfunction and management deficiencies. It was impossible to determine at the outset what the Debtors value was or whether they could successfully reorganize as a stand-alone enterprise. But many parties in interest including Third Avenue Value Fund (Third Avenue), now the primary proponent of a fee examiner encouraged the Debtors to try to find out. In fact, Third Avenue categorically opposed contemplating a sale of the Debtors because, as holders of bond debt, Third Avenue believed that the only way it would achieve a meaningful recovery in these cases was for Debtors to reorganize as stand-alone entities. All significant actions by the Debtors in these cases including, but not limited to, the decision to pursue the Debtors business plan and attempt to rehabilitate the Debtors plastics business were undertaken as part of a highly transparent process, with full disclosure of the risks to creditors, and consensually and with the support of the Debtors principal creditor constituencies. For example, JPMorgan Chase Bank, N.A., as administrative agent (the Agent) for the Debtors senior secured prepetition lenders (the Secured Pre-Petition Lenders), has had a team of its financial advisors on-site at
2 By Order dated June 9, 2005, the Court approved the Services Agreement dated May 17, 2006 by and between KZC Services, LLC, John R. Boken and the Debtors (the Services Agreement), under which KZCS agreed to provide to the Debtors restructuring services and, in particular, the services of John R. Boken as Chief Restructuring Officer and the services of other professional staff to serve in various positions at the Debtors.

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the Debtors facilities throughout the duration of these cases, with extraordinary, unfettered daily access to both information about the Debtors businesses and to the Debtors personnel. Ultimately, the risks associated with the Debtors stand-alone reorganization in the current industry environment became unacceptable to the Secured Pre-Petition Lenders. With KZCS assistance, the Debtors and their primary constituencies determined that a sale scenario, which affords a level of certainty, would provide the best opportunity for recovery to creditors and was therefore the preferred option. The Debtors are now rapidly approaching the conclusion of these Chapter 11 cases through the implementation of a consensual sale process and a Chapter 11 plan that is supported by all of the Debtors major constituencies: the unofficial steering committee for the Debtors Secured Pre-Petition Lenders, the official committee of unsecured creditors (the Committee), and the Debtors major customers. These constituencies, which have been actively involved in every step of the process, well understand and supported, at that time, the work that had to be undertaken in these cases. Moreover, KZCS has expended significant effort laying out in great detail in its Monthly Fee Statements and Interim Fee Applications precisely what was done in these cases and why. All parties have been fully aware, at all times, of the scope of KZCS activities and the need for and benefit of those services to the Debtors estates. KZCS is prepared to vigorously defend its activities and its fees in any forum. KZCS objects to insinuations that the Debtors professionals somehow should have possessed or

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communicated more information regarding the Debtors conditions and prospects. Given the extraordinary access enjoyed by the Agent and its professionals in these cases and the detail that KZCS has provided throughout these cases regarding the nature, scope and value of its services, these insinuations are unsupportable.3 Appointment of a fee examiner at this late stage, on the eve of confirmation of the Debtors plan, is unnecessary and unfair. See, e.g., Morganstern v. Revco D.S., Inc. (In re: Revco D.S., Inc.), 898 F.2d 498, 501 (6th Cir. 1990) (acknowledging debtors argument that needlessly prolong[ing] a case with last-minute demands for an examiner constitutes abuse). A fee examiner will increase the estates costs and administrative burden, delay the conclusion of these cases, and wrongly subject estate professionals to retroactive rules, 20/20 hindsight and results-based fee reviews. Appointment of an uninformed fee examiner, who has not had the benefit of living through the myriad challenges of these cases, will likely be more contentious, more costly, and more disruptive to the balance of the effort to maximize recoveries than the fee objection process. KZCS believes that the better approach is to allow the Court and the parties in interest who have participated at every stage of these complex cases and know them far better than a fee examiner could hope to do to continue to evaluate the professional fees in the cases through the normal fee objection process. If a particular party believes that a particular fee entry is improper, it is that partys right and responsibility to object with sufficient support to allow the professional in question to
3 KZCS understands that the U.S. Trustees motion for appointment of an examiner under 11 U.S.C. 1104 has been bifurcated from the instant issue and will be heard separately. Although the statements of position filed by Third Avenue and the Agent appear to call, improperly, for appointment of a fee examiner with the broad powers of a 1104 examiner, KZCS does not address that issue here but rather reserves its rights and objections.

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respond appropriately. Accordingly, KZCS respectfully requests that a fee examiner not be appointed in these cases.

Dated: March 5, 2007

PEPPER HAMILTON LLP /s/__Deborah Kovsky-Apap________ I. William Cohen (P12016) Deborah Kovsky-Apap (68258) Suite 3600 100 Renaissance Center Detroit, Michigan 48243 Telephone: 313.259.7110 Facsimile: 313.259.7926 Counsel for KZC Services, LLC

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