IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ----------------------------------------------------------x In re: : : 1 COLLINS & AIKMAN

CORPORATION, et al., : : Debtors. : : : : ----------------------------------------------------------x Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes

SECOND APPLICATION OF MCDONALD HOPKINS CO., LPA AS SPECIAL COUNSEL TO DEBTORS FOR ALLOWANCE OF COMPENSATION FOR SERVICES RENDERED AND REIMBURSEMENT OF EXPENSES -- FOR THE PERIOD FROM OCTOBER 1, 2005, THROUGH DECEMBER 31, 2005 Name of Applicant: Authorized to Provide Professional Services to: Date of Retention: Period for which compensation and reimbursement is sought: Amount of Compensation sought as actual, reasonable and necessary: Amount of Expense Reimbursement sought as actual, reasonable and necessary: McDonald Hopkins Co., LPA Collins & Aikman Corporation1 October 1, 2005 October 1, 2005, through December 31, 2005 $142,147.00

$59,751.87

The Debtors in the jointly administered cases include: Collins & Aikman Corporation; Amco Convertible Fabrics, Inc.; Becker Group, LLC (d/b/a Collins & Aikman Premier Mold); Brut Plastics, Inc.; Collins & Aikman (Gibraltar) Limited; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro Corporation); Collins & Aikman Asset Services, Inc.; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.); Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.); Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron Automotive Exteriors, Inc.); Collins & Aikman Automotive Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.); Collins & Aikman Automotive International, Inc.; Collins & Aikman Automotive International Services, Inc. (f/k/a Textron Automotive International Services, Inc.); Collins & Aikman Automotive Mats, LLC; Collins & Aikman Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas Investment, Inc.); Collins & Aikman Automotive Services, LLC; Collins & Aikman Canada Domestic Holding Company; Collins & Aikman Carpet & Acoustics (MI), Inc.; Collins & Aikman Carpet & Acoustics (TN), Inc.; Collins & Aikman Development Company; Collins & Aikman Europe, Inc.; Collins & Aikman Fabrics, Inc. (d/b/a Joan Automotive Industries, Inc.); Collins & Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.); Collins & Aikman Interiors, Inc.; Collins & Aikman International Corporation; Collins & Aikman Plastics, Inc.; Collins & Aikman Products Co., Collins & Aikman Properties, Inc.; Comet Acoustics, Inc.; CW Management Corporation; Dura Convertible Systems, Inc,; Gamble Development Company; JPS Automotive, Inc. (d/b/a PACJ, Inc); New Baltimore Holdings, LLC, Owosso Thermal Forming, LLC; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.); Wickes Asset Management, Inc., and Wickes Manufacturing Company.
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INTRODUCTION McDonald Hopkins Co., LPA (McDonald Hopkins), special counsel for the abovecaptioned debtors and debtors in possession (collectively, the Debtors), hereby makes this Application pursuant to sections 330 and 331 of the Bankruptcy Code, 11 U.S.C. 101-1330 (the Bankruptcy Code), Rule 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and the Local Bankruptcy Rules of the Eastern District of Michigan, Southern Division (the Local Rules), for an order (i) awarding interim compensation for professional services rendered in the amount of $142,147.00, and (ii) authorizing the reimbursement of $59,751.87 for expenses, in each case for the period of October 1, 2005, through December 31, 2005 (the Second Compensation Period). In support of this Application, McDonald Hopkins states as follows: BACKGROUND 1. On October 1, 2005 (the Petition Date), the Debtors filed their voluntary

petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in Debtors cases. On the Petition Date, the Court entered an order jointly administering the Debtors cases pursuant to Bankruptcy Rule 1015(b). JURISDICTION 2. The Court has jurisdiction over this Application pursuant to 28 U.S.C. 157 and

1334. Consideration of this Application is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue of the Debtors cases and this Application in the Eastern District of Michigan is proper under 28 U.S.C. 1408 and 1409. The statutory bases for the relief requested herein

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are sections 327, 328, 330 and 331 of the Bankruptcy Code and Rule 2014(a) of the Bankruptcy Rules. THE DEBTORS RETENTION OF MCDONALD HOPKINS 3. By Application dated June 1, 2005, Docket No. 196, the Debtors requested

authority to employ and retain McDonald Hopkins as their special counsel, pursuant to sections 327(e) and 328(a) of the Bankruptcy Code and Rules 2014, 2016 and 5002 of the Bankruptcy Rules, for the purpose of rendering legal services to the Debtors as requested by the Debtors, including, but not limited to: (a) representing the Debtors as their primary labor and employment counsel and serving as counsel on matters relating to labor neutrality agreements; (b) serving as the Debtors primary counsel with respect to real estate, executive contracts, and commercial contracts; (c) representing the Debtors in certain litigation matters, including ongoing commercial and intellectual property litigation; (d) serving as national coordinating counsel for certain of the Debtors' litigation, including asbestos cases; and (e) serving as one of the Debtors' counsel on corporate transactions. On June 9, 2005, the Court entered an order authorizing the Debtors to retain and employ McDonald Hopkins as special counsel for the Debtors, Docket No. 288, a copy of which is attached hereto as Exhibit A (the Retention Order). 4. Pursuant to the procedures set forth in the Administrative Order Establishing

Procedures for Monthly Compensation and Reimbursement of Expenses for Professionals and Official Committee Members, Docket No. 144, entered May 25, 2005 (the Compensation Order), professionals may request monthly compensation for fees and reimbursement of expenses, and interested parties may object to such requests. If no interested party objects to a professionals request within 15 days, the applicable professional may submit to the Court a

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certification of no objection and, thereafter, the Debtors are authorized to pay such professional 80% of the fees and 100% of the expenses requested in the fee application. If an objection is timely filed, the Compensation Order allows the Debtors to pay 80% of the fees and 100% of the expenses not subject to the objection. COMPENSATION PAID AND ITS SOURCE 5. Consistent with the Compensation Order, McDonald Hopkins has billed the

Debtors $147,232.00 for fees and $15,560.07 for expenses and has received payment of $117,785.60 for fees and $15,560.07 for expenses during the Second Compensation Period as follows:
Incurred Amounts Fees Expenses $51,441.50 $2,337.79 $58,851.00 $5,328.00 $36,939.50 $7,894.28 $147,232.00 $15,560.07 Amounts Paid Fees Expenses $41,153.20 $2,337.79 $47,080.80 $5,328.00 $29,551.60 $7,894.28 $117,785.60 $15,560.07

Period 10/01/05-10/31/05 11/01/05-11/30/05 12/01/05-12/31/05 TOTALS

Date of Invoice 11/18/2005 12/14/2005 01/27/2006

These payments have been applied to McDonald Hopkins fees and expenses in accordance with the Compensation Order. 6. In addition, McDonald Hopkins has billed the Debtors and received payment of

$40,440.00 for patent annuity payments as follows:

Date of Invoice 11/11/2005 12/29/2005 Total

Incurred Expenses $21,205.00 $19,235.00 $40,440.00

Amount Paid $21,205.00 $19,235.00 $40,440.00

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7.

The patent annuity payments represent amounts that the Debtors pay to

McDonald Hopkins to maintain certain patents that the Debtors hold outside the United States. The patent annuity payments do not represent payment for services provided by McDonald Hopkins. Nor do they represent reimbursement for expenses incurred by McDonald Hopkins in providing services to the Debtors. Rather, the patent annuity payments represent amounts that the Debtors must pay to governmental or quasi-governmental agencies to preserve the Debtors patents, which amounts are received, and then distributed, by McDonald Hopkins as a convenience to the Debtors. 8. Prior to filing their petitions, the Debtors did not pay McDonald Hopkins a

retainer. McDonald Hopkins has not shared any compensation with any other entity and no agreement to share compensation exists between McDonald Hopkins and any other entity. 9. All services for which McDonald Hopkins requests compensation were performed

for or on behalf of the Debtors. THE APPLICATION 10. In accordance with sections 330(a) and 331 of the Bankruptcy Code and Rule

2016 of the Bankruptcy Rules, as well as the Local Rules, and the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses, issued on January 30, 1996 (the Trustees Guidelines), McDonald Hopkins requests that the Court allow interim compensation for professional services rendered by McDonald Hopkins in the amount of $142,147.00 and authorize the reimbursement of the actual and necessary expenses incurred by McDonald Hopkins in the amount of $59,751.87 during the Second Compensation Period. If the Court grants the relief requested in this Application, the blended

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hourly billing rate for all McDonald Hopkins professionals rendering services to the Debtors during the Second Compensation Period would be approximately $179. A. Compensation 11. During the Second Compensation Period, McDonald Hopkins provided a total of

794.60 hours of services to the Debtors. A summary schedule of the hours devoted by each McDonald Hopkins professional, the hourly rate of each professional and the total dollar amount charged is attached hereto as Exhibit B. 12. Each professional providing services to the Debtors maintains daily time entries,

which are prepared contemporaneously with the rendition of services to the Debtors. These time records set forth the dates on which services were rendered, a summary description of such services and the time spent each day delivering such services. A schedule of such services is attached to this Application as Exhibit C. In addition, consistent with Rule 2016-1(b)(11) of the Local Rules, a brief biographical statement of each professional and paraprofessional rendering services to the Debtors is attached hereto as Exhibit D. 13. In addition, in accordance with the Guidelines, McDonald Hopkins has itemized

its services by major project area. The itemization of services provided, by major project area, is attached hereto as Exhibit E. 14. Set forth below is a summary description of McDonald Hopkins principal

activities during the Second Compensation Period: (a) 15. Asbestos Case Management 340.80 Hours; $40,336.00 Fees

During the Compensation Period, McDonald Hopkins assisted in matters related

to the Wickes Lumber bankruptcy case. McDonald Hopkins also addressed and assisted with the Rule 2004 motion filed by Beirne, Maynard & Parsons. In addition, McDonald Hopkins assisted 5
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the Debtors in the preparation and filing of notices of pendency in various prepetition and postpetition asbestos cases (collectively the Asbestos Notices of Pendency). McDonald

Hopkins communicated with local counsel and excess insurance carriers regarding the filing of the Asbestos Notices of Pendency. 16. McDonald Hopkins also continued to maintain an insurance recovery spreadsheet

of relevant reimbursement information. (b) 17. Executory Contracts and Unexpired Leases 36.80 Hours; $9,401.50 Fees

During the Second Compensation Period, McDonald Hopkins assisted the

Debtors with their equipment lease with Ford related to the Hermosillo, Mexico, facility. Additionally, McDonald Hopkins assisted the Debtors with the construction agreement pertaining to the Hermosillo. (c) 18. General Case Administration 13.30 Hours; $820.00 Fees

McDonald Hopkins case management services included preparing updates on

critical dates in accordance with various courts docket calendars (e.g., hearing dates and response deadlines); docketing pleadings and other documents in the Debtors cases; and maintaining service lists for service of pleadings. (d) 19. General Litigation 53.30 Hours; $15,949.00 Fees

McDonald Hopkins addressed litigation issues, including, but not limited to,

intellectual property issues in the patent infringement case brought by Melea Limited; asbestos litigation in Bonny Forge; ongoing indemnity obligations to Textron; continued litigation against co-defendants in a settlement agreement with Tal Trees, Inc.; reopening the Viacom litigation; a joint motion to vacate default order and a stipulation to dismiss without prejudice in the Rafael Valazquez Lopez matter; and environmental insurance recovery matters. McDonald Hopkins 6
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also communicated frequently with the Debtors and the Debtors bankruptcy counsel to provide historical information on Debtors litigation cases. McDonald Hopkins likewise communicated with counsel for opposing parties and outside counsel regarding all pending litigation matters and procedures and case management. 20. McDonald Hopkins continued to represent the Debtors in several prepetition

litigation matters not subject to the bankruptcy stay, including the Commercial Union matter and several Canadian litigation matters. (e) 21. General Real Estate 48.40 Hours; $14,312.00 Fees

McDonald Hopkins assisted the Debtors with the proposed purchase of certain

real estate, including the Green Street property in Baltimore, Maryland. McDonald Hopkins reviewed and negotiated the applicable purchase agreement and documents related to the proposed purchase. 22. In addition, McDonald assisted the Debtors in negotiating their supply contract McDonald Hopkins also assisted the Debtors in

with Primary Energy of North Carolina.

reviewing and negotiating leases of property at 150 and 250 Stephenson Highway, Troy, Michigan; Roxboro, North Carolina; and Travelers Tower II, Southfield, Michigan. (f) 23. Intellectual Property 41.70 Hours; $6,765.50 Fees

On behalf of the Debtors, McDonald Hopkins handled matters relating to the

Debtors patent annuity payments. In addition, McDonald Hopkins addressed numerous other issues relating to Debtors intellectual property, including, but not limited to, the stay of the Melea Limited patent infringement case and the prosecution of several U.S. patent applications.

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(g) 24.

Labor and Employment 219.80 Hours; $48,312.50 Fees

During the Second Compensation Period, McDonald Hopkins assisted the

Debtors in defending various labor arbitrations and unfair labor practice charges involving a number of the Debtors facilities in the Midwest and South as to union claims that the Debtors had violated various collective bargaining agreements. 25. McDonald Hopkins also handled a number of other matters for the Debtors,

including preparing multiple executive employments agreements and defending the Debtors in employment law cases not subject to the stay, including the Ramurez, Sachez, Lopez, Ptackel and Patterson matters. 26. In addition, McDonald, Hopkins assisted the Debtors in workers' compensation,

severance, military leave, and employment practice matters; as well as labor relations, employment law and union organizing matters. (h) 27. Preparation of Retention and Fee Applications 40.50 Hours; $6,250.50 Fees

McDonald Hopkins prepared and finalized its first fee request and began

preparing this Application. The Trustees Guidelines require specific, detailed information that is not normally included in the standard monthly invoices of McDonald Hopkins (e.g., verifying that all professionals time entries are in compliance with the Trustees Guidelines; preparing and balancing summaries detailing professionals hours, categories, and time detail). Accordingly, substantial additional preparation time and effort is necessary to comply with the Trustees Guidelines. In addition, McDonald Hopkins also prepared its monthly statements in accordance with the Compensation Order.

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B.

Actual and Necessary Expenses, Disbursement and Support Charges Incurred 28. McDonald Hopkins seeks reimbursement for actual expenses (Expenses)

incurred in the rendition of services during the Second Compensation Period in the sum of $15,560.07, plus the patent annuity payments of $44,879.10. McDonald Hopkins submits that such Expenses were reasonable and necessary in light of the services provided. 29. McDonald Hopkins utilized the following procedures with respect to the

Expenses incurred in rendering services during the Second Compensation Period: a) No amortization of the cost of any investment, equipment or capital outlay is included in the Expenses, and McDonald Hopkins does not make a profit on any Expense. In addition, for those items or services that McDonald Hopkins justifiably purchased or contracted for from a third party (such as outside copy services), McDonald Hopkins seeks reimbursement only for the exact amount billed to McDonald Hopkins by the third party vendor and paid by McDonald Hopkins to the third party vendor. McDonald Hopkins has retained documentation for all Expenses in excess of $25 and has provided such documentation as part of Exhibit F. Photocopying by McDonald Hopkins was charged at $.20 per page. To the extent practicable, McDonald Hopkins utilized less expensive, outside copying services. Telecopying by McDonald Hopkins was charged only for outgoing faxes at $.50 per page. McDonald Hopkins used overnight delivery and third party messenger services only as necessary. Computer assisted legal research was used only when time pressures rendered it impracticable to conduct such research manually or where the attorney performing such research determined that computer assisted legal research would be more cost efficient than manual research.

b) c)

d) e)

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RELEVANT STANDING A. Compensation. 30. To grant a request for compensation pursuant to section 330 of the Bankruptcy

Code, a court must find that such request is reasonable. The reasonableness of a compensation request is determined by the lodestar method: The Supreme Court has made it clear that the lodestar method of fee calculation is the method by which federal courts should determine reasonable attorney's fees under federal statutes that provide for such fees. Boddy v. United States Bankruptcy Court (In re Boddy), 950 F.2d 334, 337 (6th Cir. 1991); see also In re White Motor Credit Corp., 50 B.R. 885, 890 (Bankr. N.D. Ohio 1985). The lodestar amount is calculated by multiplying the number of hours reasonably expended by the reasonable hourly rate of a professional. White Motor, 50 B.R. at 890. There is a strong presumption that the lodestar product is reasonable under section 330 of the Bankruptcy Code. See Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986); In re Drexel Burnham Lambert Group, Inc., 133 B.R. 13, 22 (Bankr. S.D.N.Y. 1991). 31. McDonald Hopkins fees are not unusual and are commensurate with fees that

other lawyers of comparable experience and expertise charge on a regular basis in chapter 11 cases. McDonald Hopkins lodestar calculation is based upon hourly rates that are well within the range of rates that are charged by comparable firms in other bankruptcy cases. Accordingly, McDonald Hopkins lodestar calculation is reasonable under section 330 of the Bankruptcy Code. See Drexel Burnham Lambert, 33 B.R. at 22. B. Expenses. 32. Sections 330(a)(2) and 503(b)(4) of the Bankruptcy Code permit reimbursement See White Motor, 50 B.R. at 891-92. 10 As noted above,

for actual, necessary expenses.

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McDonald Hopkins has already conducted a review process and has eliminated the Expenses that it deemed duplicative. Accordingly, those Expenses for which reimbursement is sought in this Application satisfy the standards presented by section 330(a)(2) of the Bankruptcy Code and the Guidelines. ADJUSTMENTS 33. McDonald Hopkins has reduced its request by $1,333.20. This reduction is a

result of a review of the services provided and a determination that certain services were duplicative and/or were not beneficial to the Debtors. CONCLUSION 34. For all of the foregoing reasons, McDonald Hopkins believes that the fees

requested in this Application are reasonable and reflect the value of the services provided to the Debtors estates. Moreover, McDonald Hopkins has requested reimbursement only of actual and necessary expenses. In accordance with the Guidelines, Shawn M. Riley has certified that McDonald Hopkins billing practices for the Debtors and this Application conforms with the Guidelines. Such certification is attached to this Application as Exhibit G. WHEREFORE, McDonald Hopkins respectfully requests that the Court enter an order (a) granting McDonald Hopkins an interim allowance of compensation in the amount of $142,147.00 for services rendered to the Debtors in connection with the Debtors chapter 11 cases during the Second Compensation Period; (b) approving the reimbursement of expenses incurred during the Second Compensation Period in the amount of $59,751.87; (c) authorizing the Debtors to pay McDonald Hopkins the fees and reimbursable expenses authorized by the

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Court attributable to the Second Compensation Period, net of payments already made by the Debtors, but without any further holdback; and (d) granting such other and further relief as the Court may deem proper. May 3, 2006 Respectfully submitted, /s/Shawn M. Riley Shawn M. Riley (0037235) Michael J. Kaczka (0076548) McDONALD HOPKINS CO., LPA 600 Superior Avenue, E. Suite 2100 Cleveland, OH 44114 Telephone: 216.348.5400 Facsimile: 216.348.5474 E-mail: sriley@mcdonaldhopkins.com mkaczka@mcdonaldhopkins.com SPECIAL COUNSEL FOR DEBTORS AND DEBTORS IN POSSESSION

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