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

et al., Debtors. _______________________________________ x : : : : : x

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

OBJECTION OF CREDITOR MOTOMAN, INC. TO PROPOSED CURE AMOUNTS IN CONNECTION WITH SALE OF ASSETS OF INTERIOR PLASTICS GROUP Motoman, Inc. (Motoman), a pre- and post-petition creditor of Collins & Aikman Corporation or its affiliates (collectively, the Debtors), by and through its undersigned counsel, hereby files its Objection (the Objection) to the proposed cure amounts set forth in the Notice of Sale of Assets of Debtors Interiors Plastics Group Free and Clear of Liens, Claims, Encumbrances (the Notice) and the Notice of Clerical Error Regarding Potential Assumed Agreement Related to the Debtors Interior Plastics Group Sale (the Error Notice). In support of this Objection, Motoman states as follows: BACKGROUND 1. Prior to the Debtors petition date, Motoman provided goods to the Debtors

pursuant to certain pre-petition purchase orders. At the time of the Debtors bankruptcy filing, Motoman was owed $6,344.94 under these pre-petition purchase orders such that Motoman timely filed a proof of claim against the Debtors estate in the amount of $6,344.94 (Exhibit A, attached)1. Each of the relevant prepetition purchase orders is attached to Motomans proof of claim.

It is Motomans understanding of the Sale Motion that it does not implicate any pre-petition Motoman purchase orders or the pre-petition proof of claim in the amount of $6,344.94 that has been filed by Motoman. To the extent

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2.

Following the petition date, the Debtors and Motoman have engaged in additional

business transactions under new purchase orders that were issued after the Debtors petition date. 3. The Sale Motion seeks, in part, to authorize the assumption and assignment of

certain executory contracts and unexpired leases of the Debtors pursuant to Section 365 of the Bankruptcy Code. 4. On April 26, 2007, the Debtors served the Notice in which Motoman was

identified as a counterparty of an Assumed Agreement that may potentially be assumed and assigned to the Proposed Purchaser as listed on Exhibit A to the Notice. Exhibit A to the Notice lists two purchase order numbers, 14641 and 50351, and a cure amount for both purchase orders as being $0.00. While Motoman has identified purchase order number 14641 as a post-petition purchase order between the Debtors and Motoman, the amount currently due to Motoman under that purchase order is $10,240.60. Motoman has been unable to identify purchase order number 50351. 5. Thereafter, on May 4, 2007, the Debtors served the Error Notice, which included

a revised list of alleged Motoman executory contracts or unexpired leases that the Debtors potentially seek to assume and assign to the Proposed Purchaser. Exhibit A to the Error Notice lists three purchase orders numbered 14641, 50351, and one identified as EJAs: Projects, Equipment. Exhibit A to the Error Notice does not list any cure amount for these three purchase orders. Again, Motoman has identified purchase order number 14641 as a post-petition purchase order between the Debtors and Motoman and the current amount due under that purchase order is $10,240.60. Motoman has been unable to identify purchase order number 50351 or the purchase order identified as EJAs: Projects, Equipment.

this proof of claim amount is implicated, Motoman objects to the assumption and assignment of any pre-petition purchase order between Motoman and the Debtors without payment of $6,344.94 in full to Motoman.

6.

A review of Motomans records indicates that the only purchase orders presently

existing as between the Debtors and Motoman are as follows: P.O. Number 14641 P.O. Number 140875 P.O. Number 21774 P.O. Number 14648 Issued February 6, 2007 Issued April 30, 2007 Issued May 3, 2007 Issued April 30, 2007

(collectively, the Post-Petition Purchase Orders). Currently, the total due to Motoman for goods provided to the Debtors under the Post-Petition Purchase Orders is $23,060.64 (See Exhibit B (detailed summary of outstanding invoices, with relevant invoices following summary), attached). 7. As set forth herein, any existing purchase orders between the Debtors and

Motoman were issued post-petition and are entitled to payment in full by the Debtors under Sections 503 and 507(a)(2) of the Bankruptcy Code. ARGUMENT A. The Debtors Cannot Assume and Assign the Post-Petition Purchase Orders Absent Payment In Full Of All Administrative Expense Claims Owed to Motoman.

8.

Section 365(a) of the Bankruptcy Code provides, in relevant part, that the

trustee, subject to court approval, may assume or reject any executory contract or unexpired lease of the debtor. Section 365 applies only to prepetition executory contracts. See, e.g., In re Cannonsburg Environmental Associates, Ltd., 72 F.3d 1260 (6th Cir. 1996). In the Sixth Circuit, courts look to the Countryman definition of an executory contract to determine whether or not a contract falls under Section 365. See In re Jolly, 574 F.2d 349 (6th Cir.1978); In re Magness, 972 F.2d 689 (6th Cir. 1992). The definition of "executory contract," proposed by Professor V. Countryman . . . is a contract under which the obligation of both the bankrupt and the other

party to the contract are so far unperformed that the failure of either to complete performance would constitute a material breach excusing the performance of the other. Id. 9. None of the purchase orders listed by the Debtors on the Notice or Error Notice

and identified by Motoman as valid purchase orders were issued prepetition. See Exhibit B. Therefore, Section 365 is inapplicable to these purchase orders and any other post-petition purchase orders issued between the Debtors and Motoman, such that the Debtors are unable to assume and assign the Post-Petition Purchase Orders under Section 365 without Motomans consent and are certainly unable to do so without providing Motoman with a cure in the amount of $23,060.64. 10. Moreover, under Sections 503 and 507(a)(2) of the Bankruptcy Code, Motoman is

entitled to payment in full on all Post-Petition Purchase Orders, currently believed to total $23,060.64. To the extent any additional post-petition purchase orders are identified, Motoman is also entitled to payment in full on goods provided pursuant to those post-petition purchase orders. Section 507(a)(2) grants priority to "administrative expenses allowed under section 503(b) of this title." Section 503(b)(1)(A) defines "the actual, necessary costs and expenses of preserving the estate" as administrative expenses. The Sixth Circuit has applied what is known as the "benefit to the estate" test to determine what constitutes an administrative expense claim. Pension Benefit Guar. Corp. v. Sunarhauserman, Inc. (In re Sunarhauserman, Inc.), 126 F.3d 811 (6th Cir.1997)). Under this test, "a debt qualifies as an 'actual, necessary' administrative expense only if: (1) it arose from a transaction with the bankruptcy estate; and (2) directly and substantially benefited the estate." Id. at 816; see also United States v. Schottenstein, Zox & Dunn (In re Unitcast, Inc.), 219 B.R. 741, 746 (BAP 6th Cir.1998) (citing 11 U.S.C. 507(a)(1)).

11.

The Post-Petition Purchase Orders arose from transactions with the bankruptcy

estate because all of the Post-Petition Purchase Orders were issued by the Debtors-in-Possession post-petition. Additionally, the goods provided under each of the Post-Petition Purchase Orders has directly and substantially benefited the Debtors estates because they have enabled the Debtors to continue operating post-petition. As such, all amounts due under the Post-Petition Purchase Orders, which total $23,060.64, are entitled to treatment as allowed administrative expense claims and, in order for the Post-Petition Purchase Orders to be assigned to a third-party by the Debtors, they must be paid in full. CONCLUSION For each of the foregoing reasons, the Sale Motion should be denied to the extent that it seeks to assume and assign any of the Post-Petition Purchase Orders between Motoman and the Debtors to any third-party without the consent of Motoman and without payment in full of Motomans administrative expense claim in the amount of $23,060.64 and, to the extent that any other post-petition purchase orders between Motoman and the Debtors are identified, the Sale Motion should likewise be denied to the extent that it seeks to assume and assign any additional post-petition purchase orders to any third-party without the consent of Motoman and without payment in full of Motomans administrative expense claims arising therefrom. Respectfully submitted, Attorneys for Motoman, Inc. Dated: May 10, 2007 Varnum, Riddering, Schmidt & HowlettLLP

By:

/s/ Mary Kay Shaver Mark L. Collins (P-34609) Mary Kay Shaver (P-60411) Business Address:

Bridgewater Place P. O. Box 352 Grand Rapids, MI 49501-0352

(616) 336-6000

TAFT, STETTINIUS & HOLLISTER, LLP 425 Walnut Street, Suite 1800 Cincinnati, Ohio 45202-3957 (513) 381-2838 /s/ W. Timothy Miller W. Timothy Miller (OH 0059952) Paige Leigh Ellerman (OH 0071561) miller@taftlaw.com/ellerman@taftlaw.com Attorneys for Motoman, Inc.
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