UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS & AIKMAN CORPORATION, et al,

Debtors.
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Chapter 11 Case No. 05-55927-R (Jointly Administered) Tax Identification No. 13-3489233 Honorable Steven W. Rhodes

OBJECTION BY BECKER PROPERTIES, LLC AND ANCHOR COURT, LLC, TO DEBTORS MOTION FOR ORDER FURTHER EXTENDING THE PERIOD WITHIN WHICH THE DEBTORS MUST ASSUME OR REJECT UNEXPIRED LEASES OF NONRESIDENTIAL REAL PROPERTY AND REQUEST FOR AN EVIDENTIARY HEARING Becker Properties, LLC and Anchor Court, LLC (collectively, Becker) object to Debtors Motion for Order Further Extending the Period within which the Debtors must Assume or Reject Unexpired Leases of Nonresidential Real Property (Motion) and request for an evidentiary hearing to determine the detriment suffered by Becker as a result of Debtors

1 The Debtors in the proposed 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

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continued delay in either assuming or rejecting the Becker Leases (defined below). In support of its objection and request for an evidentiary hearing Becker states as follows: History of Extensions Over Nearly Two Years 1. On May 17, 2005 (Petition Date), Debtors filed their voluntary petitions for

relief under chapter 11 of the Bankruptcy Code. 2. On July 8, 2005, the Court entered an Order Extending the Period During Which

the Debtors Must Assume or Reject Unexpired Leases of Nonresidential Real Property (First Order). The First Order allowed Debtors until January 16, 2006, to determine whether to assume or reject the following leases of nonresidential real property under which Becker leases real property to certain entities of Debtors (collectively, the Becker Leases): Landlord Becker Properties, LLC Premises 6600 East Fifteen Mile Road, Sterling Heights, Michigan (Sterling Heights Lease) 1601 Clark Road, Havre de Grace, Maryland (Havre de Grace Lease) Anchor Court, LLC 3. 47785 West Anchor (Plymouth Lease) Court, Plymouth, Michigan

On January 6, 2006, the Court entered an Order Further Extending the Period

During Which the Debtors Must Assume or Reject Unexpired Leases of Nonresidential Real Property (Second Order). The Second Order allowed Debtors until July 15, 2006, to determine whether to assume or reject the Becker Leases.

Southwest Fabric Laminators Inc.); Wickes Asset Management, Inc.; and Wickes Manufacturing Company.

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4.

At a hearing on July 13, 2006, the Court granted Debtors until September 27,

2006, to determine whether to assume or reject the Becker Leases. No order was entered by the Court at that time. 5. On September 27, 2006, the Court entered an Order Further Extending the Period

During Which the Debtors Must Assume or Reject Unexpired Leases of Nonresidential Real Property (Third Order). The Third Order allowed Debtors until December 15, 2006, to

determine whether to assume or reject the Becker Leases. 6. On December 14, 2006, the Court entered an Order Further Extending the Period

During Which the Debtors Must Assume or Reject Unexpired Leases of Nonresidential Real Property (Fourth Order), The Fourth Order allowed Debtors until March 14, 2007, to

determine whether to assume or reject the Becker Leases: 7. Debtors Motion its sixth request for an extension -- seeks to extend the period

during which Debtors must assume or reject the Becker Leases until plan confirmation. Even assuming Debtors Plan is confirmed at the Confirmation Hearing to be held on April 19, 2007, Debtors will have had nearly two years to decide whether to assume or reject the Becker Leases. Becker objects to Debtors Motion because (a) Debtors have not justified the grant of a further extension nor the prejudice that will be suffered by Becker if the motion is granted, (b) an openended extension is contrary to the timetable Congress provided in the Bankruptcy Code, and (c) Debtors have had sufficient time to formulate a plan of reorganization and decide whether to assume or reject the Becker Leases. 8. Prior to the 1984 amendments adopting this provision, nonresidential real 3
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property leases were treated as any other executory contract and could be assumed or rejected at any time before plan confirmation. In re Wedtech Corp., 72 BR 464, 468 (Bankr. SDNY 1987). Under the pre-1984 law, a landlord bore the burden of moving the Court to force the debtor to assume or reject a given lease before plan confirmation. Id. The 1984 amendment, by treating nonresidential leases of real property differently than other executory contracts, places the burden upon a debtor to show cause why the time to determine whether to assume or reject should be extended. Id. at 469. The granting of open-ended extensions is likely to result in the type of delay and uncertainty Congress sought to eliminate in enacting section 365(d)(4). Chapman Investment Assoc. v. American Healthcare Management (In re American Healthcare Management, Inc.), 900 F2d 827, 830 (5th Cir. 1990). As such, open-ended extensions of time for debtors to assume or reject leases can only be granted where the debtor establishes sufficient need. DeBartolo Corp. v. Child World, Inc. (In re Child World Inc.), 147 BR 854, 854 (SDNY 1992). Courts have considered the following factors in determining whether to grant a debtors request to extend the time to determine whether to assume or reject a lease: (a) the impact to the lessor of the debtors continued possession of the premises; and (b) whether the debtor has had sufficient time to formulate a plan of reorganization. South Street Seaport Limited Partnership v. Burger Boys, Inc. (In re Burger Boys, Inc.), 94 F3d 755, 761 (2nd Cir. 1996) (citing Theatre Holding Corp. v. Mauro, 681 F2d 102 (2nd Cir. 1982)); In re Columbus One Parcel Service, Inc., 138 BR 194, 195 (Bankr. S.D. Ohio 1992). 9. Debtors justification for their open-ended request is that Debtors are involved in

ongoing negotiations regarding the sale of certain of Debtors businesses that might include Debtors operations at the locations under the Sterling Heights Lease and Plymouth Lease. 4
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Debtors are asking for more time in the hope of achieving potential sales. 10. Debtors further state that they intend to reject the Havre de Grace Lease because

the facility which it supports, DaimlerChrylser Corporations Newark, Delaware Plant (Newark Plant), is scheduled to close. The closing date for the Newark Plant is currently unknown. 11. These justifications are not cause for an extension of time through confirmation of

a plan, especially considering the prejudice to Becker. 12. The Motion should be denied because Debtors continued possession of the

premises, and the attendant uncertainty as to whether Debtors will assume or reject the Sterling Heights and Plymouth Leases, negatively affects Becker. Becker will be prejudiced by an extension because it will continue to be forced to postpone seeking to sell the properties or seeking replacement tenants for the properties. Further delay is detrimental because the value of the properties continues to decline and Debtors payments do not compensate Becker for that decline. Because the date of plan confirmation is not certain and because Debtors are reserving their rights to seek further extensions, the prejudice to Becker will continue until the Court determines a firm date by which Debtors must assume or reject the Sterling Heights and Plymouth Leases. 13. Debtors have stated that they intend to reject the Havre de Grace Lease, but wish

to use the premises in their sole and unfettered discretion until it is are ready to reject the Havre de Grace Lease. This is contrary to the whole purpose of section 365 which requires Debtors to justify its need for extensions of the time to assume or reject nonresidential real property leases. 14. Further, Debtors requested extension removes the Courts oversight of the 5
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reorganization process as established by the Bankruptcy Code and shifts the burden to Becker to request a deadline by which leases must be assumed or rejected. Debtors should not be allowed to circumvent the procedures set forth in Section 365(d)(4) simply because its case involves many nonresidential real property leases. As Colliers observed, the court could grant an openended extension within the sixty-day period and provide in the order that the lease will be terminated as to a specific party in interest upon a showing of cause. Such orders would, however, defeat the whole purpose of 365(d)(4) In re Wedtech Corp., 72 BR at 470 (internal citations omitted). As another court stated: [t]his court rejects the notion that it should grant the debtor an open-ended extension to expire upon the confirmation of the Chapter 11 plan. With the enactment of 365(d)(4), Congress clearly expressed its intent that such a result is untenable. In re Musikahn Corp., 57 BR 938, n.5 (Bankr. EDNY 1986). Debtors proposed order for extension of time does not even preserve expressly the ability of Becker to move to require Debtors to assume or reject its lease(s) upon a showing of cause. 15. The sentiment against open-ended extensions under 365(d)(4) is further

evidenced by the recent amendment to 365(d)(4) under the BAPCPA, which prohibits (as to cases filed after October 17, 2005) an extension of time to assume or reject unexpired nonresidential real property leases beyond 210 days after the petition date in the absence of the written consent of the landlord. In this case, Becker believes that a general, open-ended

extension until plan confirmation of Debtors time to assume or reject under 365(d)(4) is not appropriate and should be denied. 16. Finally, the Motion should also be denied because Debtors have had sufficient

time to formulate a plan of reorganization and decide whether to assume or reject the Becker 6
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Leases. If the Motion is granted, and if the plan is confirmed on April 19, 2007, Debtors will have had over 700 days to decide whether to assume or reject the Becker Leases. By

comparison, the recent amendment to 365(d)(4) under the BAPCPA, which prohibits (as to cases filed after October 17, 2005) an extension of time to assume or reject unexpired nonresidential real property leases beyond 210 days after the petition date in the absence of the written consent of the landlord. Debtors proposed extension will, if granted, exceed the new statutory limit on extension by more than three times, and the initial period granted by the Code by more than eleven times. RELIEF REQUESTED Becker requests entry of an Order denying the Debtors Motion, granting an evidentiary hearing on the issue of the detriment suffered by Becker due to the continuing delay by Debtors in determining whether to assume or reject the Becker Leases and granting other relief as this Court determines. BODMAN LLP By: /s/ Robert J. Diehl, Jr. Robert J. Diehl, Jr. (P31264) Ralph E. McDowell (P39235) th 6 Floor at Ford Field 1901 St. Antoine Street Detroit, Michigan 48226 Telephone: (313) 259-7777 Facsimile: (313) 393-7579 rdiehl@bodmanllp.com Attorneys for Becker Properties, L.L.C. and Anchor Court, L.L.C. Dated: March 9, 2007

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