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

et al.1 Debtors. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes Adversary No. _____________

COLLINS & AIKMAN CORPORATION, et al., Plaintiffs, v. WACHOVIA BANK AND TRUST COMPANY N. A., AS TRUSTEE, Defendant.

COMPLAINT FOR TURNOVER OF ESTATE ASSETS AND BREACH OF CONTRACT Plaintiffs Collins & Aikman et al., the above-captioned debtors (collectively, the Debtors), allege for their Complaint against Wachovia Bank and Trust Company, N.A.

The Debtors in the jointly administered cases include: Collins & Aikman Corporation; Amco Convertible Fabrics, Inc., Case No. 05-55949; Becker Group, LLC (d/b/a/ Collins & Aikman Premier Mold), Case No. 05-55977; Brut Plastics, Inc., Case No. 05-55957; Collins & Aikman (Gibraltar) Limited, Case No. 05-55989; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro Corporation), Case No. 05-55952; Collins & Aikman Asset Services, Inc., Case No. 05-55959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.), Case No. 05-55965; Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.), Case No. 0555991; Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron Automotive Exteriors, Inc.), Case No. 05-55958; Collins & Aikman Automotive Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.), Case No. 05-55956; Collins & Aikman Automotive International, Inc., Case No. 05-55980; Collins & Aikman Automotive International Services, Inc. (f/k/a Textron Automotive International Services, Inc.), Case No. 05-55985; Collins & Aikman Automotive Mats, LLC, Case No. 05-55969; Collins & Aikman Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas Investment, Inc.), Case No. 05-55978; Collins & Aikman Automotive Services, LLC, Case No. 05-55981; Collins & Aikman Canada Domestic Holding Company, Case No. 05-55930; Collins & Aikman Carpet & Acoustics (MI), Inc., Case No. 05-55982; Collins & Aikman Carpet & Acoustics (TN), Inc., Case No. 05-55984; Collins & Aikman Development Company, Case No. 05-55943; Collins & Aikman Europe, Inc., Case No. 05-55971; Collins & Aikman Fabrics, Inc. (d/b/a Joan Automotive Industries, Inc.), Case No. 05-55963; Collins & Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.), Case No. 05-55976; Collins & Aikman Interiors, Inc., Case No. 05-55970; Collins & Aikman International Corporation, Case No. 05-55951; Collins & Aikman Plastics, Inc., Case No. 05-55960; Collins & Aikman Products Co., Case No. 05-55932; Collins & Aikman Properties, Inc., Case No. 0555964; Comet Acoustics, Inc., Case No. 05-55972; CW Management Corporation, Case No. 05-55979; Dura Convertible Systems, Inc., Case No. 05-55942; Gamble Development Company, Case No. 05-55974; JPS Automotive, Inc. (d/b/a PACJ, Inc.), Case No. 05-55935; New Baltimore Holdings, LLC, Case No. 05-55992; Owosso Thermal Forming, LLC, Case No. 05-55946; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset Management, Inc., Case No. 05-55962; and Wickes Manufacturing Company, Case No. 05-55968.

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(Wachovia) upon knowledge of their own acts and upon information and belief as to all other matters, as follows: NATURE OF THIS ACTION 1. By this action, the Debtors are seeking an order directing Wachovia to turnover

property of the Debtors that is currently being held in trust by Wachovia. In addition, because Wachovia breached the trust agreement by making certain improper payments, the Debtors are also seeking monetary damages for breach of that trust agreement. 2. More specifically, prior to the Petition Date, the Debtors established a trust for the

purpose of paying supplemental retirement benefits to Donald F. McCullough, the former Chief Executive Officer of Collins & Aikman Corporation (the C&A Rabbi Trust). Wachovia is the trustee of the C&A Rabbi Trust (the Trustee). 3. Pursuant to the express terms of the trust agreement controlling the

C&A Rabbi Trust (the Trust Agreement), a copy of which is attached hereto as Exhibit A, the trust assets held in the C&A Rabbi Trust (the Trust Assets) are the property of the Debtors and, as such, should be available for distribution to the Debtors creditors. The Trustee, however, has informed the Debtors that it will transfer the Trust Assets to the Debtors pursuant only to a judgment by a court of competent jurisdiction. 4. In response to that directive from the Trustee, the Debtors file this Complaint

seeking the entry of a judgment, issued pursuant to section 542 of the Bankruptcy Code, 11 U.S.C. 101-1330 (the Bankruptcy Code), requiring Wachovia to turnover the Trust Assets. 5. In addition, Wachovia has breached the Trust Agreement by failing to discontinue

payments to the beneficiary of the C&A Rabbi Trust after being informed of the Debtors insolvency. Accordingly, this Complaint also seeks to recover the monetary damages that the Debtors have suffered as a result of Wachovias breach of the Trust Agreement. 2
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JURISDICTION AND VENUE 6. On May 17, 2005 (the Petition Date), the Debtors filed their voluntary petitions

for relief under chapter 11 of the Bankruptcy Code. The Debtors continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 7. The Court has jurisdiction over this adversary proceeding pursuant to This adversary proceeding is a core proceeding within the meaning of

28 U.S.C. 1334.

28 U.S.C. 157(b)(2). 8. 9. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. The statutory basis for the relief requested herein is section 542(a) of the

Bankruptcy Code. 10. This adversary proceeding has been instituted in accordance with Rule 7001 of

the Federal Rules of Bankruptcy Procedure. 11. court. BACKGROUND I. The Parties 12. The Debtors and their non-debtor affiliates are leading global suppliers of No prior request for the relief requested herein has been made to this or any other

automotive components, systems and modules to all of the worlds largest vehicle manufacturers, including DaimlerChrysler AG, Ford Motor Company, General Motors Corporation, Honda Motor Company, Inc., Nissan Motor Company Unlimited, Porsche Cars GB, Renault Crateur DAutomobiles, Toyota SA and Volkswagen AG. 13. The Defendant in this Adversary Proceeding is Wachovia Bank and Trust

Company, N.A., a national banking association, with offices at 301 South College Street, Charlotte, North Carolina 28211. 3
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II.

The Trust Assets are Property of the Debtors Estates 14. On December 10, 1986, the Debtors and Wachovia, as Trustee, entered into the

Trust Agreement establishing the C&A Rabbi Trust. 15. The C&A Rabbi Trust was created to hold assets for funding the Debtors

liabilities, if any, for retirement benefits of certain of the Debtors former employees. 16. Section 10.1 of the Trust Agreement provides:2 Insolvency of the Company. As used in this Article X, the Company shall be deemed to be Insolvent if (1) the Company is unable to pay its debts as they come due, or (2) the Company is subject to a pending proceeding as a debtor under the federal Bankruptcy Code (or any successor federal statute). In the event that the Company shall be deemed Insolvent, the assets of the Trust shall be held for the benefit of the general creditors of the Company (hereinafter referred to as Bankruptcy Creditors). III. Wachovias Breaches of the Trust Agreement 17. The Trust Agreement imposes upon Wachovia certain obligations if the Debtors

become insolvent. 18. Among other things, section 10.2 of the Trust Agreement provides: Trustees Responsibilities If Company May Be Insolvent. If at any time the Company or a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall within 30 days independently determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payments of Benefits under the Plan and this Agreement, and shall hold the Trust Fund for the benefit of Bankruptcy Creditors. 19. On June 9, 2005, the Debtors served Wachovia with a written copy of the Notice

of Commencement of Bankruptcy Proceedings, informing Wachovia of the Debtors insolvency.

Capitalized terms in the excerpts from the Trust Agreement are as defined in the Trust Agreement.

4
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20.

Upon information and belief, contrary to its obligations under the Trust

Agreement, Wachovia did not independently determine whether the Debtors were in fact insolvent within 30 days of receiving notice of the Debtors insolvency from the Debtors. 21. Moreover, contrary to its obligations under the Trust Agreement, Wachovia did

not discontinue the payment of benefits under the Trust upon receipt of the Debtors notice of insolvency. 22. Instead, between June 2005 and October 2005, Wachovia continued to use or

invade the Trust Assets to pay monthly benefits to Louise V. McCullough, who is the surviving spouse of Donald F. McCullough and the sole remaining beneficiary of the Trust. 23. From the time of its receipt of the Debtors notice of insolvency through October

2005, when it finally discontinued Trust payments, Wachovia used the Trust Assets to pay to Ms. McCullough total benefits in the amount of $35,215.40. COUNT I (Accounting and Turnover of Estate Assets -- 11 U.S.C. 542(a)) 24. The Debtors incorporate by reference each of the allegations contained in

paragraphs 1 through 23 of this Complaint as though fully stated herein. 25. Section 542(a) of the Bankruptcy Code provides, in relevant part: Except as provided in subsection (c) or (d) of this section, an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title . . . shall deliver to the trustee, and account for, such property or the value of such property . . . . 11 U.S.C. 542(a). 26. Pursuant to the Trust Agreement and section 542 of the Bankruptcy Code, the

Trust Assets are property of the Debtors estates and Wachovia, as Trustee, is required to deliver all Trust Assets to the Debtors.

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27.

Pursuant to section 542 of the Bankruptcy Code, Wachovia, as Trustee, also is

required to provide an accounting to the Debtors with respect to the Trust Assets. COUNT II (Breach of Trust Agreement) 28. The Debtors incorporate by reference each of the allegations contained in

paragraphs 1 through 27 of this Complaint as though fully stated herein. 29. The Debtors and Wachovia are parties to the Trust Agreement, which is a valid

and enforceable agreement. 30. The Debtors have fulfilled all of their obligations under the Trust Agreement,

including informing Wachovia of the Debtors insolvency in writing on June 9, 2006. 31. Pursuant to the express terms of the Trust Agreement, within 30 days of receipt of

notice of the Debtors insolvency, Wachovia was obligated to determine whether the Debtors were insolvent, and, pending such determination, Wachovia was obligated to discontinue payments of benefits to Ms. McCullough. 32. insolvency. 33. In addition, contrary to the terms of the Trust Agreement, after receiving notice of Upon information and belief, Wachovia did not investigate the Debtors

the Debtors insolvency Wachovia did not discontinue payments and caused monthly distributions in the amount of $8,803.55 to be paid to Ms. McCullough for an additional four months. 34. As a result of Wachovias breach of the Trust Agreement, the Debtors have

sustained damages in an amount not less than $35,215.40, plus interest. WHEREFORE, the Debtors respectfully request the entry of a judgment as follows: (a) on Count I, ordering Wachovia, as Trustee of the C&A Rabbi Trust, to turnover and deliver all of the Trust Assets to the Debtors; 6
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(b) (c)

on Count I, ordering Wachovia, as Trustee of the C&A Rabbi Trust, to provide an accounting of the Trust Assets; on Count II, ordering Wachovia, as Trustee of the C&A Rabbi Trust, to pay to the Debtors damages in an amount not less than $35,215.40, plus interest; and granting such other further relief as is just and proper. KIRKLAND & ELLIS LLP /s/ Ray C. Schrock Richard M. Cieri (NY RC 6062) Citigroup Center 153 East 53rd Street New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 -andDavid L. Eaton (IL 3122303) Ray C. Schrock (IL 6257005) Marc J. Carmel (IL 6272032) 200 East Randolph Drive Chicago, Illinois 60601 Telephone: (312) 861-2000 Facsimile: (312) 861-2200 -andCARSON FISCHER, P.L.C. Joseph M. Fischer (P13452) 4111 West Andover Road West - Second Floor Bloomfield Hills, Michigan 48302 Telephone: (248) 644-4840 Facsimile: (248) 644-1832 Co-Counsel for the Debtors

(d)

Dated: November 3, 2006

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