UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION - DETROIT IN RE COLLINS & AIKMAN

CORPORATION, Debtor. ___________________________________/

CHAPT ER 11 CASE NO. 05-55927-SWR HON . Steven W. Rhodes

BRIEF IN SUPPORT OF CITICORP DEL-LEASE, INC. D/B/A CITICORP DEALER FINANCES MOTION FOR RELIEF FROM AUTOMATIC STAY PURSUANT TO 11 U.S.C. 362(d)(1)

STATE OF FACTS

On March 12, 2002, Collins & Aikman Corporation (the Debtor) entered into a Master Equipment Lease Agreement (the Lease) with CitiCorp Del-Lease, Inc. d/b/a CitiCorp Dealer Finance (CitiCorp) whereunder the Debtor agreed to pay monthly rental payments to CitiCorp in exchange for possession and use of equipment as reflected on Equipment Schedules to be appended to and made part of the Lease on delivery of such equipment to the Debtor [a copy of the Lease is attached to the Motion filed herewith as Exhibit 1]. In addition to the other terms and conditions, the Lease requires the Debtor to maintain insurance against risk of loss, damage, theft or destruction to each item of leased equipment, requires the Debtor to pay all taxes and assessments connected with possession and operation of such equipment or to reimburse CitiCorp for the same. On March 13, 2002, CitiCorp and the Debtor entered into an Equipment Leasing Schedule (Schedule No. 1) under the Lease whereunder the Debtor leased a Caterpillar Model GC25K Lift Truck bearing serial number AT82C07162 (Lift Truck No. 1) from CitiCorp for a thirty-six (36) months in exchange for monthly rental in the amount of $412.93 due and payable by Debtor to CitiCorp on the thirteenth (13th) day of each successive month commencing on March 13, 2002 [a copy of Schedule No. 1 is attached to the Motion filed herewith as Exhibit 2]. Schedule No. 1 permits the Debtor to purchase Lift Truck No. 1 at the end of the rental term for its then fair market value [see Exhibit 2]. On March 15, 2002, CitiCorp and the Debtor entered into an Equipment Leasing Schedule (Schedule No. 2) under the Lease whereunder the Debtor leased a Caterpillar Model GC25K Lift Truck bearing serial number AT82C07158 (Lift Truck No. 2) from CitiCorp for a thirty-six (36) months in exchange for monthly rental in the amount of $412.93 due and payable by Debtor to
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CitiCorp on the thirteenth (13th ) day of each successive month commencing on March 13, 2002 [a copy of Schedule No. 2 is attached to the Motion filed herewith as Exhibit 3]. Schedule No. 2 permits the Debtor to purchase Lift Truck No. 2 at the end of the rental term for its then fair market value [see Exhibit 3]. On March 13, 2002, CitiCorp and the Debtor entered into an Equipment Leasing Schedule (Schedule No. 3) under the Lease whereunder the Debtor leased a Caterpillar Model GC30K Lift Truck bearing serial number AT83C01755 (Lift Truck No. 3) from CitiCorp for a thirty-six (36) months in exchange for monthly rental in the amount of $484.72 due and payable by Debtor to CitiCorp on the seventh (7th) day of each successive month commencing on March 7, 2002 [a copy of Schedule No. 3 is attached to the Motion filed herewith as Exhibit 4]. Schedule No. 3 permits the Debtor to purchase Lift Truck No. 3 at the end of the rental term for its then fair market value [see Exhibit 4]. On March 13, 2002, CitiCorp and the Debtor entered into an Equipment Leasing Schedule (Schedule No. 4) under the Lease whereunder the Debtor leased a Caterpillar Model GC30K Lift Truck bearing serial number AT83C01690 (Lift Truck No. 4) from CitiCorp for a thirty-six (36) months in exchange for monthly rental in the amount of $484.72 due and payable by Debtor to CitiCorp on the seventh (7th) day of each successive month commencing on March 7, 2002 [a copy of Schedule No. 4 is attached to the Motion filed herewith as Exhibit 5]. Schedule No. 4 permits the Debtor to purchase Lift Truck No. 4 at the end of the rental term for its then fair market value [see Exhibit 5]. On May 17, 2005 (the Filing Date), Debtor filed a Petition in Bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
DISCUSSION CITICORP IS ENTITLED TO RELIEF FROM THE AUTOMATIC STAY PURSUANT TO 11 U.S.C. 362 (d)(1) BECAUSE THE LEASE AND SCH EDULES HAVE EX PIRED

As of the Filing Date, Debtor was in default under the Lease and Schedule Nos. 1 through 4 (the Schedules) as a result of its failure to make rental payments in the total amount of $4,068.34, including accrued late charges. All of the Schedules commenced in March of 2002 and were for thirty-six (36) months. The terms under the Lease and Schedules have expired and Debtor
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is no longer entitled to possession of Lift Truck Nos. 1 through 4 (hereinafter collectively referred to as the Lift Trucks) at issue in this matter [see Table]. Schedule Number
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Collateral
Caterpillar Model GC25K Lift Truck bearing serial number AT82C07162

Commencement Date
March 13, 2002

Lease Term
36 M onths

Caterpillar Model GC25K Lift Truck bearing serial number AT82C07158

March 15, 2002

36 months

Caterpillar Model GC30K Lift Truck bearing serial number AT83C01755

March 13, 2002

36 months

Caterpillar Model GC30K Lift Truck bearing serial number AT83C01690

March 13, 2002

36 months

Debtor continues to use and operate the Lift Trucks in the course of business under the protection of the automatic stay imposed under 11 U.S.C. 362 (a), subjecting them to wear, tear and diminution in value. Debtor has no equity in the Lift Trucks and CitiCorp is not adequately protected as required under 11 U.S.C. 363 (e). No other party claims any interest in the Lift Trucks which are the subject matter of this Motion. As a result of Debtors Bankruptcy Petition and the automatic stay imposed under 11 U.S.C. 362 (a), CitiCorp is unable to exercise its remedies. CitiCorp is entitled to relief from the automatic stay pursuant to 11 U.S.C. 362 (d) (1).
CONCLUSION

Because the rental terms of the Schedules have expired, CitiCorp Del-Lease, Inc. d/b/a CitiCorp Dealer Finance is entitled to an Order Granting Relief from the Automatic Stay for cause pursuant to 11 U.S.C. 362 (d) (1) so that CitiCorp Del-Lease, Inc. d/b/a CitiCorp Dealer Finance can obtain possession of and foreclose upon the Lift Trucks in accordance with the default provisions of the Lease and Schedules and the Michigan Uniform Commercial Code.

DATED: October 10, 2005

RESPECTFULLY SUBMITTED,

/s/ RICHARD A. GREEN (P-36746)

Attorney for CitiCorp Del-Lease, Inc. 30150 North Telegraph, Ste. 444 Bingham Farms, MI 48025 (248) 540-7665