UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ----------------------------------------------------------In re: x ) ) 1 ) COLLINS & AIKMAN CORPORATION,

et al. ) Debtors. ) ) ----------------------------------------------------------- x

Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) Honorable Steven W. Rhodes

STIPULATION BETWEEN THE COLLINS & AIKMAN POST-CONSUMMATION TRUST, COLLINS & AIKMAN LITIGATION TRUST AND THE STATE OF MICHIGAN DEPARTMENT OF THE TREASURY This stipulation, by and between the Collins & Aikman Post-Consummation Trust (the Post-Consummation Trust), Collins & Aikman Litigation Trust (the Litigation Trust), as successors to the above-captioned Debtors (collectively, the Debtors) pursuant to the Plan (as hereinafter defined) and the State of Michigan, Department of the Treasury, for itself and its departments, agencies, agents, employees, officers, directors, attorneys, other representatives and

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. 0555991; 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. 0555964; 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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assigns (collectively, the State of Michigan), through their undersigned counsel stipulate as follows: WHEREAS, on May 17, 2005 (the Petition Date), the Debtors filed voluntary petitions for relief (collectively, the Case) under chapter 11 of the Bankruptcy Code, 11 U.S.C. 1011330 (the Bankruptcy Code) in the United States Bankruptcy Court for the Eastern District of Michigan (the Bankruptcy Court). WHEREAS, the State of Michigan filed various claims against the Debtors in the Case, asserting (1) administrative expense claims, (2) secured claims, (3) priority tax claims and (4) unsecured non-priority claims in various amounts. WHEREAS, the State of Michigan filed Claim No. 1497 alleging a secured claim against the Debtors in the amount of $ 48,009.20 (the Alleged Secured Claim). WHEREAS, the State of Michigan filed the following alleged administrative expense claims (the Alleged Administrative Claims): CLAIM NO. 8787 8846 8847 1671 8628 8796 8788 8790 CLAIMED AMOUNT $213.94 $540.58 $664.52 $3,096.46 $3,201.29 $4,767.59 $6,127.30 $13,135.83

WHEREAS, the State of Michigan filed the following priority tax claims against the Debtors (the Alleged Priority Tax Claim): CLAIM NO. 1238 8443 8456 8793 8786 8791 8539 CLAIMED AMOUNT $2,513.89 $998.64 $2866.94 $28,043.19 $30,622.96 $31,718.60 $757,331.60

WHEREAS, the State of Michigan filed the following general unsecured non-priority claims against the Debtors (the Alleged General Unsecured Claims): CLAIM NO. 1675 8457 8792 1668 1239 1567 8445 8538 8797 8789 8391 1670 CLAIMED AMOUNT $840.00 $108.00 $517.38 $575.35 $757.86 $840.00 $868.27 $2,650.72 $13,072.14 $28,742.17 $32,380.63 $808,916.97

(the Alleged Secured Claim, Alleged Administrative Claim, Alleged Priority Tax Claim and Alleged General Unsecured Claim, collectively, the Michigan Claims). WHEREAS, on April 2, 2008 the Post-Consummation Trust filed The Collins & Aikman Post-Consummation Trusts Twenty-Third Omnibus Objection to Claims (Insufficient Books and Records) [Docket No. 9044] and objected to, among other claims, Claim No. 1671.

WHEREAS, on April 4, 2008, the Post-Consummation Trust filed The Collins & Aikman Post Consummation Trusts Twenty-Seventh Omnibus Objection to Claims (Insufficient Books and Records) [Docket No. 9054] and objected to, among other claims, Claim Nos. 1238 and 1497. WHEREAS, on April 8, 2008, the Post-Consummation Trust filed The Collins & Aikman Post Consummation Trusts Thirty-Fifth Omnibus Objection to Claims [Docket No. 9091] and objected to, among other claims, Claim Nos. 8787, 8443, 8456, and 8793. WHEREAS, on April 8, 2008, the Post-Consummation Trust filed The Collins & Aikman Post Consummation Trusts Thirty-Seventh Omnibus Objection to Claims (Insufficient Books and Records) [Docket No. 9092] and objected to, among other claims, Claim Nos. 8628, 8796, 8788, 8790, 8786, 8791, and 8539. WHEREAS, the State of Michigan has sent multiple notices to certain officers and former officers of the Debtors, advising that the State of Michigan contends that as a corporate officer(s) they each have personal liability for any amounts allegedly owed by the Debtors to the State of Michigan. NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, IT IS STIPULATED AND AGREED THAT: 1. Claim No. 1497 shall be deemed an Allowed Secured Claim (as defined in the

Plan) in the amount of $48,009.20 (the State of Michigan Allowed Secured Claim).

2.

The following claims will be deemed Allowed Administrative Claims (as defined

in the Plan) in the following amounts (the State of Michigan Allowed Administrative Claims): CLAIM NO. 8790 8788 8846 3. AMOUNT ALLOWED $15,952.59 $3,499.43 $540.58

The following claims will be deemed Allowed Priority Tax Claims (as defined in

the Plan) in the following amounts (the State of Michigan Allowed Priority Tax Claims): CLAIM NO. 8539 8791 8786 8793 8456 8443 4. AMOUNT ALLOWED $757,331.60 $31,718.60 $30,622.96 $28,043.19 $2,866.94 $998.64

The following claims will be deemed Allowed General Unsecured Claims

(as defined in the Plan) in the amounts below (the State of Michigan Allowed Unsecured Claims): CLAIM NO. 8789 8797 8538 8445 1567 1239 8792 CLAIMED AMOUNT $28,742.17 $12,554.75 $2,650.72 $868.27 $840.00 $757.86 $517.38

5. purposes:

The following claims are hereby deemed withdrawn and expunged for all

6.

EXPUNGED CLAIMS Claim No. 1671 Claim No. 8628 Claim No. 8796 Claim No. 8787 Claim No. 8847 Claim No. 8443 Claim No. 8456 Claim No. 8793 Claim No. 1675 Claim No. 8457 Claim No. 8391 Claim No. 1670 Provided that the Stipulation is approved by the Court, the Post-Consummation

Trust will pay the State of Michigan Allowed Secured Claim, State of Michigan Allowed Administrative Claims and State of Michigan Allowed Priority Tax Claims in the total aggregate amount of $919,583.73 (the Settlement Payment) on or before June 13, 2008. 7. To the extent any distributions are made on the State of Michigan Allowed

General Unsecured Claims, such distributions will be made pursuant to the terms of the First Amended Joint Plan of Collins & Aikman Corporation and its Debtor Subsidiaries, dated July 9, 2007 (the Plan), as confirmed by the Order Confirming the First Amended Joint Plan of Collins & Aikman Corporation and Its Debtor Subsidiaries, entered on July 18, 2007. 8. This Stipulation, upon approval by the Bankruptcy Court, resolves all claims

which have been, or which otherwise might be asserted by the State of Michigan, including but not limited to the Michigan Claims, in the Case or otherwise, against the Debtors, the PostConsummation Trust, the Litigation Trust and each of their respective current and former agents,

attorneys, employees, officers, directors, other representatives, affiliates, successors and assigns, including, but not limited to, Jennifer Heckman, and Gregory Tinnell and any successor trustee(s) in the Case hereinafter appointed. Notwithstanding the foregoing, nothing contained herein shall act as a release of the Debtors, the Post-Consummation Trust, the Litigation Trust or each of their respective current and former agents, attorneys, employees, officers, directors, other representatives, affiliates, successors and assigns from any liability, to the extent such liability exists, for any tax returns which the Debtors have not filed as of the date of this Stipulation. 9. Upon receipt of the Settlement Payment, the State of Michigan fully and forever

releases, acquits and discharges the Debtors, the Post-Consummation Trust, the Litigation Trust and each of their respective current and former agents, attorneys, employees, officers, directors, other representatives, affiliates successors and assigns, including, but not limited to, Jennifer Heckman and any successor trustee(s) in the Case hereafter appointed, from any and all actions, causes of action, claims, damages, liabilities, costs and expenses, of any kind or nature, whether known or unknown, accrued or unaccrued, liquidated or unliquidated, fixed or contingent, direct or indirect, which now exist or which might otherwise hereafter arise from any events, transactions or occurrences which happen at anytime, since the beginning of time up and until and including the date of this Stipulation with respect to any tax liabilities, including but not limited to the Michigan Claims. 10. The State of Michigan covenants and agrees not to assert any further or other

claims against the Debtors, the Post-Consummation Trust, the Litigation Trust and each of their respective current and former agents, attorneys, employees, officers, directors, other representatives, affiliates, successors and assigns, including, but not limited to Jennifer Heckman and Gregory Tinnell and any successor trustee(s) n the Case hereinafter appointed, and any other such claims which might otherwise exist are hereby deemed fully and forever waived, released, 7

acquitted and discharged by the State of Michigan.

Notwithstanding the foregoing, nothing

contained herein shall act as a release of the Debtors, the Post-Consummation Trust, the Litigation Trust or each of their respective current and former agents, attorneys, employees, officers, directors, other representatives, affiliates, successors and assigns from any liability, to the extent such liability exists, for any tax returns which the Debtors have not filed as of the date of this Stipulation. The State of Michigan represents and warrants that it has not heretofore assigned to any third party any claims which the State of Michigan has, had, or might otherwise have against the Debtors, the Post-Consummation Trust, the Litigation Trust and each of their respective agents, attorneys, employees, officers, directors, other representatives, affiliates, successors and assigns. 11. The parties hereto agree that the Debtors, the Post-Consummation Trust and

Kurtzman Carson Consultants, LLC are authorized to take all actions necessary to effectuate the relief agreed upon by this Stipulation. 12. The Bankruptcy Court shall retain jurisdiction (and the Post-Consummation Trust,

Litigation Trust and State of Michigan consent to such retention of jurisdiction) to resolve any disputes or controversies arising from or related to this Stipulation. 13. Each person who executes this Stipulation on behalf of a party hereto represents

that he or she is duly authorized to execute this Stipulation on behalf of such party. 14. This Stipulation may be executed in multiple counterparts, any of which may be

transmitted by facsimile, and each of which shall be deemed an original, but all of which together shall constitute one instrument. 15. This Stipulation shall not be modified, altered, amended, or vacated without

written consent of all parties hereto. Any such modification, alteration, amendment, or vacation, in whole or in part, shall be the subject to the approval of the Bankruptcy Court. 8

16.

This Stipulation constitutes the entire agreement between the parties with respect

to the subject matter hereof, and no prior or contemporaneous agreement may be used to alter the terms of the Stipulation. 17. The terms and conditions of this Stipulation shall be immediately effective and

enforceable upon the entry of the order approving the Stipulation. STIPULATED AND AGREED TO: BOYLE BURDETT STATE OF MICHIGAN

By:s/H. William Burdett, Jr. Eugene H. Boyle Jr. H. William Burdett, Jr. 14950 E. Jefferson Avenue, Suite 200 Grosse Pointe Park, Michigan 48230 (313) 344-4000 Counsel for Collins & Aikman Post-Consummation Trust and Collins & Aikman Litigation Trust

By:s/Deborah Benedict Waldmeir Deborah Benedict Waldmeir Assistant Attorney General 3030 W. Grand Blvd., Suite 10-200 Detroit, Michigan 48202 (313) 456-0140

Dated: June __, 2008

G:\Bankr\Collins & Aikman\Pleadings\Adversary Proceedings\Stip with State of Michigan.REDLINE 5-19-08.DOC