In The United States Bankruptcy Court Eastern District of Michigan Southern Division

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
MOTION OF KZC SERVICES, LLC AND JOHN R. BOKEN FOR RELIEF FROM ADMINISTRATIVE ORDER 00-04 TO ALLOW DISCOVERY ON MATTERS RELATING TO THEIR FEE REQUEST KZC Services, LLC and John R. Boken (collectively referred to as KZCS), by and through their attorneys, Nathan, Neuman, Nathan & Zousmer, P.C., for their Motion for Relief from Administrative Order 00-04 to Allow Discovery on Matters Relating to Their Fee Request (AMotion@), states as follows: 1. On May 17, 2005, the Petition Date, the Debtors filed their voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code and commenced the above-captioned Chapter 11 cases. On the Petition Date, the Court entered an order jointly administering these cases pursuant to Bankruptcy Rule 1015(b). During the pendency of these cases, Debtors operated their businesses and managed their properties as debtors-in-possession pursuant to Section 1107(a) and 1108 of the Bankruptcy Code. 2. On July 18, 2007, the Court confirmed the Debtors= Chapter 11 Plan which
1The 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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outlined how proceeds from the sale and wind down of the Debtors= operations were to be distributed to creditors. The Debtors Chapter 11 Plan became effective on October 12, 2007, after the Debtors had met all of the conditions to effectiveness of the Plan. 3. By this Courts Orders dated June 9, 2005 and July 18, 2005 (collectively the
Retention Orders), the Debtors were authorized to retain KZCS under the terms of the Services Agreement, as amended by the Retention Orders, to provide restructuring services, with Boken serving in the capacity of Chief Restructuring Officer, effective as of the Petition Date. The Retention Orders authorized the Debtors to compensate KZCS at KZCS hourly rates charge for services of the type contemplated in the Chapter 11 cases and to reimburse KZCS for actual and necessary out-of-pocket expenses and direct costs incurred, subject to application of this Court in accordance with applicable law. 4. By Order dated May 24, 2007, the Court entered an Order (the Fee Examination
Order) appointing Judy A. ONeill as fee examiner (Fee Examiner) and granting related relief. The Fee Examiner was appointed pursuant to Rule 706 of Federal Rules of Evidence and 11 U.S.C. section105. 5. The parties in interest were permitted to file a response to the Fee Examiners
final report (the Report) within thirty (30) days after its filing, which filing occurred on October 22, 2007. On November 20, 2007, KZCS filed its Response to the Report. 6. On November 12, 2007, KZCS filed its final application for compensation and
reimbursement of expenses for restructuring services provided to the Debtors for the period from May 17, 2005 through October 12, 2007 (Final Application). 7. Pursuant to Administrative Order 00-04 (Administrative Order), F.R. Bank. P.
7026, 7028-37 (as applicable to contested matters through F.R.Bank. P. 9014) shall not apply to 2
contested matters unless the Court orders otherwise in a particular case. 8. KZCS, through this Motion, seeks relief from the Administrative Order, and
requests this Court to permit KCZS to conduct discovery through depositions, documents requests and interrogatories of the Fee Examiner, any parties that assisted the Fee Examiner in the preparation of her Report, and any other parties in interest that may file objections to KZCS Final Application. The probative value of any testimony which may be offered by Ms. ONeill can only be derived from her appointment as the Courts expert under Fed. R. Evid. 706 (Rule 706). As noted in KZCS Response to the Report, the admissibility of her conclusions should be judged under the Daubert standard. The admissibility of her conclusions is further complicated by her collaboration with Fred Caruso in preparation of the Report, since it is unclear from the face of the Report which portions represent the conclusions of Ms. ONeill and which represent the conclusions of her collaborator. The Application to approve the Fee Examiners retention of Mr. Carusos firm Development Specialists, Inc. (DSI), was also based upon Rule 706 and Bankruptcy Code section 105, and the Courts Order (Docket 7695) granted that Application without, however, expressly decreeing that DSI was a Court-appointed expert under Rule 706. Rule 706 has been construed to allow a party the right to depose a Court appointed expert, based on the text of the rule itself. Gartner v. Hendrix, 1991 U.S.Dist. LEXIS 11516 (E.D.La. 1991); Smith v. Armantrout, 604 F. Supp. 840, 844 (W.D. Mo. 1984).2 9. Under the circumstances, KZCS believes it is appropriate and necessary for this
Court to allow relief from the Administrative Order and to allow discovery to proceed in this contested matter. It would be prejudicial to KZCS if it were not allowed discovery in this matter with regard to the Report, and of objectors to its fees. For the reasons set forth in KZCS
2 KZCS acknowledges that some courts have limited the right to depose a Rule 706 expert, especially when that person is not expected to testify.
Response to the Report, there are significant issues regarding the admissibility of the Report, and any testimony of the Fee Examiner or Mr. Caruso, which should be resolved prior to the Courts reliance on the Report, and discovery will assist the litigants in more efficiently framing the issues in conjunction with the admissibility of the Report and any expert testimony which may be offered. The conduct of such discovery will also streamline the presentations before the Court with respect to the Final Application. Finally, such discovery is necessary to enable KZCS to defend itself from objections which may be filed to its Final Application. WHEREFORE, KZCS respectfully request this Court grant relief from Administrative Order 00-04, and allow it to conduct discovery of the Fee Examiner, any parties that assisted the Fee Examiner in the preparation of her Report and any other parties in interest that may file objections to KZCS Final Application, pursuant to Bankruptcy Rule 7026, 7028-37 (as applicable to contested matters through F.R. Bank. P. 9014), and that the Court grant such further and other relief as it deems just under the circumstances. A proposed Order is attached hereto as Exhibit 1. Respectfully submitted, NATHAN, NEUMAN, NATHAN & ZOUSMER, P.C. /s/ Kenneth A. Nathan Kenneth A. Nathan (P39142) Attorneys for KZCS 29100 Northwestern Highway, Suite 260 Southfield, Michigan 48034 (248) 351-0099 knathan@nathanneuman.com .
Dated: November 21, 2007
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
ORDER GRANTING MOTION OF KZC SERVICES, LLC AND JOHN R. BOKEN FOR RELIEF FROM ADMINISTRATIVE ORDER 00-04 TO ALLOW DISCOVERY ON MATTERS RELATING TO THEIR FEE REQUEST THIS MATTER having come before the Court upon the Motion of KCZ Services, LLC and John R. Boken for Relief from Administrative Order 00-04 to Allow Discovery on Matters Relating to Their Fee Request (Motion) (all capitalized terms not otherwise defined herein shall have the meaning described to them in the Motion); it appearing that the Court has jurisdiction over this matter pursuant to 28 U.S.C. Sections 157 and 1334; it appearing that this Court proceeding pursuant to 28 U.S.C. Section 157(b)(2); it appearing that venue of this proceeding in this district is proper pursuant to 28 U.S.C. Sections 1408 and 1409; notice of the Motion having been provided to all parties entitled thereto; and after due deliberations and sufficient cause appearing therefore;
IT IS HEREBY ORDERED that: 1. 2. The Motion is granted in it entirety. KZCS is allowed and authorized to conduct discovery of the Fee Examiner, any
parties that assisted the Fee Examiner in the preparation of her Report and any other parties in interest that may file objections to KZCS Final Application, pursuant to Bankruptcy Rule 7026, 7028-37 (as applicable to contested matters through F.R.Bank. P. 9014). 3. KZCS is authorized and empowered to take all actions necessary to implement the
relief granted in this Order. 4. upon its entry. 5. The Court retains jurisdiction with respect to all matters arising from or related to the The terms and conditions of this Order shall be immediately effective and enforceable
implementation of this Order.
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
NOTICE AND OPPORTUNITY TO OBJECT TO MOTION OF KZC SERVICES, LLC AND JOHN R. BOKEN FOR RELIEF FROM ADMINISTRATIVE ORDER 00-04 TO ALLOW DISCOVERY ON MATTERS RELATING TO THEIR FEE REQUEST PLEASE TAKE NOTICE that KZC Services, LLC and John R. Boken, have filed their Motion for Relief from Administrative Order 00-04 to Allow Discovery on Matters Relating to their Fee Request (hereinafter referred to as the AMotion@) with the Court. The Motion seeks relief from Administrative Order 00-04. YOUR RIGHTS MAY BE AFFECTED. You should read these papers carefully and discuss them with your attorney, if you have one in this bankruptcy case. (If you do not have an attorney, you may wish to consult one.) The Motion is available for review at the office of the Clerk of the U.S. Bankruptcy Court for the Eastern District of Michigan, located at 211 W. Fort St., 21st Floor, Detroit, Michigan, or may be obtained by sending a written request to Kenneth A. Nathan, Esq., Nathan, Neuman, Nathan & Zousmer, P.C., 29100 Northwestern Hwy., Ste. 260, Southfield, MI 48034. If you do not want the Court to grant the relief sought in the Motion, or if you want the Court to consider your views on the Motion, within fifteen (15) days you or your attorney must: 1. File with the Court a written response or an answer explaining your position, at: United States Bankruptcy Court, 211 W. Fort Street, Ste. 2100, Detroit, MI 48226. If you mail your response to the Court for filing, you must mail it early enough so the Court will receive it within the 15-day period stated above.
You must also mail a copy to: Kenneth A. Nathan, Nathan, Neuman, Nathan & Zousmer, P.C., 29100 Northwestern Hwy., Ste. 260, Southfield, MI 48034. 2. If a response or answer 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 decide that you do not oppose the relief sought in the Motion and may enter an order granting the relief requested in the Motion. NATHAN, NEUMAN, NATHAN & ZOUSMER, P.C.
DATE: November 21, 2007
By: /s/ Kenneth A. Nathan . Kenneth A. Nathan (P39142) Attorneys for KCZ Services and John R. Boken 29100 Northwestern Highway, Ste. 260 Southfield, MI 48034 (248) 351-0099 knathan@nathanneuman.com

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IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ) ) COLLINS & AIKMAN CORPORATION,

Dated: November 21, 2007

implementation of this Order.

In re: COLLINS & AIKMAN CORPORATION, et al.1 Debtors.

DATE: November 21, 2007

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