UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

In Re: COLLINS & AIKMAN CORPORATION, et al., Chapter 11 Case No. 05-55927-R Hon. Steven W. Rhodes

Debtor. _________________________________ LIMITED OBJECTION TO CONFIRMATION OF FIRST AMENDED JOINT PLAN OF COLLINS & AIKMAN CORPORATION AND ITS DEBTOR SUBSIDIARIES BY WANDA PATTERSON, ARIE SCHLEGEL, DIXIE AKERS, EDNA DAWSON, PAUL PHILLABAUM AND SHELLY CORNWELL NOW COMES Wanda Patterson, Arie Schlegel, Dixie Akers, Edna Dawson, Paul Phillabaum, and Shelly Cornwell (the "Claimants"), by and through its attorneys, Varnum, Riddering, Schmidt & Howlett LLP, and for its Limited Objection to Confirmation of the First Amended Joint Plan of Collins & Aikman Corporation and Its Debtor Subsidiaries states as follows: I. FACTS 1. On March 23, 2004, the Claimants filed a Second Amended Complaint in the case

of Wanda Patterson, et. al. v. Heartland Industrial Partners, LLP, et. al., United States District Court for the Northern District of Ohio, Eastern Division (District Court), Case No. 5:03-CV1596 (the "District Court Action"). The case was assigned to Senior District Court Judge David Dowd, Jr. 2. The District Court Action was filed against several defendants, including Collins

& Aikman Corporation, Collins & Aikman Products Co. and Collins & Aikman Accessory Mats, Inc. (the "Debtor Defendants"). The other defendants are Heartland Industrial Partners, LLP

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(Heartland), which is an investment company that has an ownership interest in the Debtor Defendants, and the United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (the USW), which is a labor organization.1 The Debtor Defendants, Heartland and USW are collectively the "Defendant." 3. Claimants are individual employees who work at a facility owned and operated by

the Defendant Debtors. 4. The District Court Action involves the legality of certain labor agreements to

which the Defendants are signatory called the Side Letter and Framework for a Constructive Collective Bargaining Relationship (the Framework). 5. The Second Amended Complaint alleges that Defendants violated Section 302 of

the Labor-Management Relations Act, 29 U.S.C. 186 ( 186) by entering into and enforcing the Side Letter and Framework Agreements. 6. Section 186(a) generally makes it unlawful for an employer to deliver money or

other thing of value to a labor organization. Section 186(b) conversely makes it unlawful for a labor organization or its agents to request or receive money or other thing of value from an employer. Section 186(e) provides a private cause of action to restrain violations of 186(a) and (b). See Local 144 Nursing Home Pension Fund v. Demisay, 508 U.S. 581 (1993). 7. With regard to the Debtor Defendants, the Second Amended Complaint alleges

that Debtor Defendants violate 186(a) by delivering and agreeing to deliver certain forms of valuable organizing assistance to the USW during union organizing campaigns at certain facilities of the Debtor Defendants. The overarching legal issue is whether certain forms of

The USW was formerly known as the United Steelworkers of America, AFL-CIO.

organizing assistance constitute a thing of value that an employer cannot provide a union under 186. 8. The District Court Action requests only declaratory and injunctive relief against

the Debtor Defendants and the other defendants for violations of 186. No monetary relief is sought in the suit. Indeed, monetary relief cannot be recovered under 186(e), which provides a private cause of action for injunctive relief only. See Sellers v. O'Connell, 701 F.2d 575, 578 (6th Cir. 1983). 9. On January 12, 2004, the District Court denied, in part, Defendants Motion to

Dismiss the Complaint. The parties then engaged in and completed extensive discovery. 10. All parties to the District Court Action filed cross motions for summary judgment

by April 25, 2005. 11. On April 21, 2006, the District Court ruled on cross-motions for summary

judgment. The Court found that there were no material facts in dispute, and ruled in favor of the Claimants with respect to jurisdictional issues. However, the Court found that Defendants were entitled to summary judgment on the merits. 12. On May 15, 2006, Claimants filed a notice of appeal that appealed the District

Courts grant of summary judgment to the Court of Appeals for the Sixth Circuit. By April 6, 2007, all parties had filed their respective briefs with the Sixth Circuit. The case is now fully briefed and pending before the Sixth Circuit. II. LIMITED OBJECTION TO PLAN 13. On February 9, 2007, the Debtors filed their First Amended Joint Plan of Collins

& Aikman Corporation and its Debtor Subsidiaries (the Plan).

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Article XII sets for settlement and release provisions effective upon confirmation

of the Plan, unless otherwise stated within the Plan. 15. Specifically, Article XII(C) provides that, as of the Effective Date,2 "each

Releasing Party will be deemed to forever release, waiver and discharge all claims (including Derivative Claims), causes of actions and any other debts, obligations, rights, suits, damages, actions, interests, remedies and liabilities . . . . that are based in whole or in part on any act, omission, transaction or other occurrence taking place on or prior to the Effective Date in any way relating to a Debtor . . . ." 16. Article XII(E)(1) provides that, as of the Effective Date, all Persons with Claims

are permanently enjoined from continuing in any manner any action against the Debtors; Article XII(E)(2) provides that all Persons that currently hold causes of actions that are released under the Plan are permanently enjoined from continuing in any manner any action against the Debtors. 17. The District Court Action is a pre-petition cause of action against the Debtor

Defendants. Thus, as of the Effective Date, the Plan currently contemplates a release and discharge of District Court Action, and a permanent injunction against continuation of the District Court Action, with respect to the Debtors. 18. The Claimants file this limited objection for the sole purpose of excepting out the

District Court Action from the provisions of Article XII of the Plan, so that the District Court Action can continue until decided by the Court of Appeals for the Sixth Circuit. 19. In granting the Claimants limited objection, Defendant Debtors will not be

hampered in their effective reorganization.

Terms not otherwise defined in this Limited Objection shall have the meaning given to them in the Plan.

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If the District Court Action is decided in favor of the Claimants, the primary

ramification will be that Debtor Defendants will be enjoined from delivering, and from agreeing to deliver, certain forms of organizing assistance to the USW during union organizing campaigns at certain facilities of the Debtor Defendants. Debtor Defendants being enjoined from assisting USW organizing campaigns does not and will not effect Debtor Defendants effective reorganization. 21. As no monetary damages are being sought, the continuance of the District Court

Action will not delay the evaluation or payment of claims under the Plan. 22. The Debtors' granted an extension to the Claimants to file an objection to the Plan

through May 14, 2007. III. CONCLUSION WHEREFORE, the Claimants requests that the Court (A) Require the Debtor to except the District Court Action from the provisions of

Article XII, such that the District Court Action can continue until a final decision is made by the 6th Circuit Court of Appeals and any additional proceedings ordered by the 6th Circuit Court of Appeals are completed; and (B) Grant such other relief as is just and proper. VARNUM, RIDDERING, SCHMIDT & HOWLETTLLP Attorneys for Claimants

Date: May 10, 2007

By:

/s/ Mary Kay Shaver Timothy J. Curtin (P-12410) Mary Kay Shaver (P-60411) Business Address: Bridgewater Place P. O. Box 352 Grand Rapids, MI 49501-0352 (616) 336-6000

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