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
Proposed Hearing Date (if necessary): April 19, 2007 at 2:00 p.m. Proposed Objection Deadline: April 18, 2007 at 2:00 p.m.

DEBTORS MOTION FOR THE ENTRY OF AN ORDER AUTHORIZING THE DEBTORS TO ENTER INTO AGREEMENTS WITH PENSION BENEFIT GUARANTY CORPORATION TERMINATING THE DEBTORS PENSION PLAN AND APPOINTING PENSION PLAN TRUSTEE AND SETTLING RELATED CLAIMS The above-captioned debtors (collectively, the Debtors) hereby move the Court (the Motion) for the entry of an order, substantially in the form of Exhibit A, approving and authorizing the Debtors to enter into: (i) the Settlement Agreement by and among Collins & Aikman Corporation on behalf of itself and its controlled group (as defined under the Employee Retirement

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. 05-55991; 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. 05-55964; 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. 0555946; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset Management, Inc., Case No. 0555962; and Wickes Manufacturing Company, Case No. 05-55968.

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Income Security Act of 1974, 29 U.S.C. 1301-1461 (ERISA)) (collectively, C&A)2 and Pension Benefit Guaranty Corporation (PBGC), substantially in the form of Exhibit B (the Settlement Agreement); and (ii) the Agreement for Appointment of Trustee and Termination of Plan between Collins & Aikman Products Co. and PBGC, substantially in the form of Exhibit C (the Termination & Trustee Agreement), providing for the termination of the Pension Plan (as defined below) and settlement of PBGCs claims arising therefrom. In support of the Motion, the Debtors respectfully state as follows: Jurisdiction 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334. This matter

is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. 3. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. The statutory bases for the relief requested herein is section 363 of the

Bankruptcy Code, 11 U.S.C. 101-1330 (the Bankruptcy Code) and Rule 9019 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). Background 4. On May 17, 2005 (the Petition Date), the Debtors filed their voluntary petitions for

relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these cases. On the Petition Date, the Court entered an order jointly administering these cases pursuant to Bankruptcy Rule 1015(b). 5. On May 24, 2005, the United States trustee appointed an official committee of

unsecured creditors pursuant to section 1102 of the Bankruptcy Code (the Committee).
2 All of the Debtors and certain non-debtor subsidiaries of Collins & Aikman Corporation are members of C&A.

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6.

On January 24, 2007, the Debtors filed the First Amended Joint Plan of Collins &

Aikman Corporation and Its Debtor Subsidiaries [Docket No. 3976] (as amended, the Plan). On January 26, 2007, the Court entered an order approving the Debtors amended disclosure statement related to the Plan [Docket No. 3988]. Pursuant to this order, the Debtors commenced the solicitation process in connection with the Plan. The Plan is supported by the unofficial steering committee for the Debtors senior, secured prepetition lenders, the Committee and the Debtors customers. This Court has scheduled a hearing on confirmation of the Plan for May 24, 2007. A condition precedent to confirmation of the Plan is the termination of the Debtors Pension Plan (as defined below). Termination of the Debtors Pension Plan 7. The Debtors maintained one consolidated tax-qualified United States defined benefit

pension plan sponsored by Collins & Aikman Products Co. (the Company) entitled the Collins & Aikman Pension Plan (the Pension Plan). The Pension Plan provides retirement benefits to certain of the Debtors current and former employees, many of whom are represented by labor unions, and is covered by Title IV of ERISA. The Pension Plan assets are not part of the Debtors estates. 8. On or about March 29, 2007, PBGC issued a Notice of Determination (the NOD)

regarding the Pension Plan. A copy of the NOD is attached hereto as Exhibit D. The NOD states that PBGC has determined that the Pension Plan has not met the minimum funding standards and will be unable to pay benefits when due. In addition, the NOD states that, to protect participants in the Pension Plan and PBGC, the Pension Plan must be terminated, effective March 31, 2007, and PBGC appointed as statutory trustee.3 Under ERISA, PBGC has the authority to terminate the

The Debtors ceased making minimum funding contributions to the Pension Plan in July 2006. As a result, an accumulated minimum funding deficiency of approximately $8.1 million has been incurred. In addition, the Pension Plan is underfunded, with assets of approximately $253

[Footnote continued on next page] 3

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Pension Plan and appoint a trustee of the Pension Plan without the Debtors consent. See 29 U.S.C. 1342. The Settlement Agreement 9. As the Debtors have disclosed to the Court and publicly, to maximize the value of the

Debtors estates and save jobs, the Debtors are pursuing a cooperative sale process, which the Debtors expect will culminate with the confirmation of the Plan. A condition to confirmation of the Plan is termination of the Pension Plan. 10. To effectuate the involuntary termination of the Pension Plan by PBGC and

appointment of PBGC as trustee of the Pension Plan and to resolve the administrative and unsecured claims of PBGC against the Debtors estates and certain related matters, the Debtors and PBGC have agreed to the Settlement Agreement and the Termination & Trustee Agreement. 11. The principal terms of the Settlement Agreement and Termination & Trustee

Agreement are as follows:4 a. b. Termination: PBGC will terminate the Pension Plan as of March 31, 2007. Termination & Trustee Agreement at 1-2. Trusteeship: PBGC will be appointed trustee of the Pension Plan and the Company will transfer any records, assets or other property of the Pension Plan to PBGC. Termination & Trustee Agreement at 3-4. Consideration to PBGC: PBGC will be granted: (i) an allowed administrative claim in the amount of $8,478,000 that will be paid in cash on the Effective Date (as that term is defined in the Plan); and (ii) an allowed

c.

[Footnote continued from previous page]

million available to pay benefits projected at over $430 million. (The value of future plan benefits is subject to substantial uncertainty. The value of approximately $430 million is derived from certain PBGC regulations and discounted to present value in accordance therewith. See generally 29 C.F.R. 4044.) 4 The following summary of the Settlement Agreement and the Termination & Trustee Agreement is provided for the convenience of the Court and parties in interest. To the extent that there are any discrepancies between this summary and the Settlement Agreement and the Termination & Trustee Agreement, the terms and conditions of the Settlement Agreement and the Termination & Trustee Agreement, respectively, shall govern. Capitalized terms used in the summary of the Settlement Agreement and the Termination & Trustee Agreement that are not defined herein shall have the meaning given in the Settlement Agreement or the Termination & Trustee Agreement, as applicable.

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general, unsecured claim in the amount of $87,891,000 classified in Class 6 under the Plan. d. Waivers and Releases by PBGC: PBGC will be deemed to have settled and released any and all claims on its own behalf or on behalf of the Pension Plan against C&A arising from or related to: (i) the Pension Plan; (ii) minimum funding obligations; (iii) PBGC insurance premiums; and (iv) unfunded benefits liability. Release of Liens, Setoff Rights: PBGC will be deemed to have fully and forever released any purported liens against C&A that exist (or could have been asserted) under ERISA. In addition, PBGC will not assert any setoff rights against C&A. Support of Plan: PBGC shall affirmatively support the Plan, the Settlement Agreement and the Termination & Trustee Agreement and relief sought by the Debtors related thereto to the extent that it does not limit or impair PBGC in the exercise of its fiduciary duties in its capacity as a member of the Committee. Relief Requested 12. By this Motion, the Debtors seek an order approving and authorizing the Debtors to

e.

f.

enter into: (a) the Settlement Agreement, substantially in the form of Exhibit B; and (b) the Termination & Trustee Agreement, substantially in the form of Exhibit C; providing for the termination of the Pension Plan and settlement of PBGCs claims arising therefrom. 13. Importantly, the agent to the Debtors prepetition senior, secured lenders supports the

relief requested in this Motion. Basis for Relief 14. Bankruptcy Rule 9019(a) provides, in pertinent part, that [o]n motion by the [debtor

in possession] and after notice and a hearing, the court may approve a compromise or settlement. 15. Compromises are tools for expediting the administration of the case and reducing

administrative costs and are favored in bankruptcy. See Protective Comm. of Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968) (In administering reorganization proceedings in an economic and practical matter it will often be wise to arrange the

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settlement of claims.); In re Fishell, 1995 WL 66622, at *2 (6th Cir. 1995); In re Haven, Inc., 2005 WL 927666, at *1 (6th Cir. B.A.P. 2005); In re Dow Corning Corp., 192 B.R. 415, 421 (AJS) (Bankr. E.D. Mich. 1996); see also Fogel v. Zell, 221 F.3d 955, 960 (7th Cir. 2000); In re Martin, 91 F.3d 389, 393 (3d Cir. 1996) (To minimize litigation and expedite the administration of a bankruptcy case, [c]ompromises are favored in bankruptcy.) (quoting 9 Collier on Bankruptcy 9019.03[1] (15th Ed. 1993)). Moreover, various courts have endorsed the use of

Bankruptcy Rule 9019 to resolve disputes. See, e.g., Bartel v. Bar Harbour Airways, Inc., 196 B.R. 268, 271 (S.D.N.Y. 1996); In re Check Reporting Service, Inc., 137 B.R. 653, 656 (Bankr. W.D. Mich. 1992); In re Miller, 148 B.R. 510, 516 (Bankr. N.D. Ill. 1992); In re Planned Systems, Inc., 82 B.R. 919, 921 (Bankr. S.D. Ohio 1988). 16. Generally, a settlement should be approved if it is determined to be fair and equitable

and does not fall below the lowest level of reasonableness. See Bauer v. Commerce Union Bank, 859 F.2d 438, 441 (6th Cir. 1988); Dow Corning, 192 B.R. at 421; Haven, 2005 WL 927666, at *3. In determining whether a compromise satisfies this standard, courts ordinarily consider: (a) the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity and expense of the litigation involved; and (d) the paramount interest of creditors and proper deference to their reasonable views. See, e.g., In re Bard, 49 Fed. Appx. 528, 530 (6th Cir. 2002); In re Dow Corning Corp., 2003 WL 22218449, at *1 (DPH) (Bankr. E.D. Mich. 2003); In re Dalen, 259 B.R. 586, 611-13 (Bankr. W.D. Mich. 2001); In re Stinson, Inc., 221 B.R. 726, 732 (SWR) (Bankr. E.D. Mich. 1998). 17. The Settlement Agreement, which settles the administrative and unsecured claim

amounts of PBGC, is fair, equitable and reasonable. First and foremost, the settlement allows for the involuntary termination of the Pension Plan, effective March 31, 2007, which has numerous

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benefits for the Debtors and their estates. Although the Debtors amended the Pension Plan to cease future benefit accruals for non-union participants after June 2006, union employees continue to accrue benefits under the Pension Plan. As a result, PBGCs administrative claim for minimum funding contributions relating to post-petition services would continue to increase if the Pension Plan were not terminated. See In re Sunarhauserman, Inc., 184 B.R. 273, 276-77 (Bankr. N.D. Ohio 1995) (citing In re White Motor Corp., 831 F.2d 106 (6th Cir. 1987)) (granting administrative expense priority to PBGC claim for minimum funding contributions attributable to post-petition services). To effect a termination otherwise (a voluntary termination), the Debtors would have to modify collective bargaining agreements through the process under section 1113 of the Bankruptcy Code, which would be costly to the estate. In addition, transferring trusteeship of the Pension Plan to PBGC will alleviate reporting obligations with respect to the Pension Plan and otherwise alleviate the Debtors administrative and expense burden with respect to the Pension Plan. 18. Further, the termination of the Pension Plan allows the Debtors to satisfy a condition

to confirmation of the Plan and allows the Debtors to transfer administration of the Pension Plan to PBGC to help ensure an uninterrupted flow of benefits. 19. Additionally, the Settlement Agreement and the Termination & Trustee Agreement

facilitates the Debtors consummating important upcoming asset sales given that no Buyer is willing to assume the Pension Plan. 20. The Settlement Agreement also resolves litigable issues relating to the attachment of

statutory liens asserted by PBGC. Although the filing of the Debtors chapter 11 cases prevents PBGC from perfecting a statutory lien against the Debtors for missed minimum funding contributions under 26 U.S.C. 412(n)(1), PBGC may yet be able to perfect such liens against non-Debtor members of the Companys controlled group (as defined in ERISA). Any such lien

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against these non-Debtors would reduce recoveries from inter-company receivables due to the Debtors that may be subordinate to PBGCs secured claim. Notably, the recoveries from the Debtors Canadian affiliates may be substantial in the absence of a PBGC lien. PBGC asserts that the statutory lien attaches to these foreign entities. Although the Debtors contend that the lien cannot attach, a final determination of this issue would require costly litigation that would be a distraction from the sales and confirmation processes. 21. Moreover, the Settlement Agreement resolves litigable issues relating to the priority

and amount of PBGCs claims. PBGC filed several proofs of claim against multiple Debtors asserting priority and unsecured status both in unliquidated amounts and for the amount $192,000,000. See, e.g., Claim Nos. 7956, 8211. The Debtors dispute PBGCs assertion of priority treatment. In addition, the Debtors and PBGC dispute: (a) the issue of fact regarding the amount of future benefits that will be payable by PBGC; and (b) the issue of law regarding the proper discount rate to be applied to those future payments. These contested issues would require briefing and testimony before the Bankruptcy Court and, perhaps, subsequent appeals. Even if the results were favorable to the Debtors, this would be costly to the Debtors estates. In the event this litigation were unsuccessful, the Debtors estates may face a much larger administrative claim than is agreed upon in the Settlement Agreement, which would dilute the payout to other creditors under the Plan and may stall the Plan process and delay the Debtors emergence from these cases. 22. Finally, under the Settlement Agreement, PBGC agrees to support the Plan, which

will aid in acceptance and confirmation of the Plan, thereby avoiding costs that would arise from a contested confirmation hearing involving PBGC. 23. Section 363(b) allows a trustee or debtor in possession to use property of the estate

other than in the ordinary course of business after appropriate notice and hearing.

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See 11 U.S.C. 363(b)(1). Section 363(b)(1) provides that [t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate. 11 U.S.C. 363(b)(1). Courts within the Sixth Circuit have held that transactions should be approved under section 363 when they are supported by sound business judgment. See, e.g., Stephens Indus., Inc. v. McClung, 789 F.2d 386, 390 (6th Cir. 1986) (concluding that a court can authorize a sale of a Debtors assets when a sound business purpose dictates such action); In re Embrace Sys. Corp., 178 B.R. 112, 124 (Bankr. W.D. Mich. 1995); see also In re North American Royalties, Inc., 276 B.R. 860, 866 (Bankr. E.D. Tenn. 2002). 24. The assets of the Pension Plan are not property of the estate; therefore, Court approval

is not necessary to transfer the trust assets as contemplated in the Termination & Trustee Agreement. Nevertheless, to the extent that termination of the Pension Plan and the consideration provided to PBGC under the Settlement Agreement constitute a transfer of property other than in the ordinary course of business, the Settlement Agreement and the Termination & Trustee Agreement are supported by sound business judgment for the reasons set forth above. Notice 25. The Motion and a notice thereof will be served upon the Core Group, the 2002 List

and PBGC as required by the Case Management Procedures.5 In light of the nature of the relief requested, the Debtors submit that no further notice is required. No Prior Request 26. court. No prior motion for the relief requested herein has been made to this or any other

Capitalized terms used in this paragraph 25 not otherwise defined herein shall have the meanings set forth in the First Amended Notice, Case Management and Administrative Procedures filed on June 9, 2005 [Docket No. 294].

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WHEREFORE, the Debtors respectfully request the entry of an order, substantially in the form attached hereto as Exhibit A, (a) approving and authorizing the Debtors to enter into: (i) the Settlement Agreement, substantially in the form of Exhibit B; and (ii) the Termination & Trustee Agreement, substantially in the form of Exhibit C; and (b) granting such other and further relief as is just and proper. Dated: April 13, 2007 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

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10

EXHIBIT A

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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

ORDER AUTHORIZING THE DEBTORS TO ENTER INTO AGREEMENTS WITH PENSION BENEFIT GUARANTY CORPORATION TERMINATING THE DEBTORS PENSION PLAN AND APPOINTING PENSION PLAN TRUSTEE AND SETTLING RELATED CLAIMS Upon the motion (the Motion)2 of the above-captioned debtors (collectively, the Debtors) for the entry of an order approving and authorizing the Debtors to enter into: (i) the Settlement Agreement, substantially in the form of Exhibit B to the Motion; and (ii) the Termination & Trustee Agreement, substantially in the form of Exhibit C to the Motion, providing for the termination of the Pension Plan and settlement of PBGCs claims arising therefrom

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. 05-55991; 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. 05-55964; 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. 0555946; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset Management, Inc., Case No. 0555962; and Wickes Manufacturing Company, Case No. 05-55968. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Motion.

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[Docket No.

]; it appearing that the relief requested is in the best interest of the Debtors estates,

their creditors and other parties in interest; it appearing that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; it appearing that this proceeding is a core proceeding pursuant to 28 U.S.C. 157(b)(2); it appearing that venue of this proceeding and the Motion in this District is proper pursuant to 28 U.S.C. 1408 and 1409; it appearing that notice of the Motion and the opportunity for a hearing on the Motion was appropriate under the particular circumstances and that no other or further notice need be given; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED 1. 2. 3. 4. The Motion is granted in its entirety. The Settlement Agreement is approved. The Termination & Trustee Agreement is approved. The Debtors are authorized to execute and deliver the Settlement Agreement and take

any and all actions reasonably necessary to consummate the Settlement Agreement in all respects. 5. The Debtors are authorized to execute and deliver the Termination & Trustee

Agreement and take any and all actions reasonably necessary to consummate the Termination & Trustee Agreement in all respects. 6. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Motion. 7. upon its entry. 8. The Court retains jurisdiction with respect to all matters arising from or related to the The terms and conditions of this Order shall be immediately effective and enforceable

implementation of this Order.

2
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CERTIFICATE OF SERVICE I, Ray C. Schrock, an attorney, certify that on the 13th day of April, 2007, I caused to be served, by e-mail, facsimile and by first class mail, in the manner and to the parties set forth on the attached service lists, a true and correct copy of the foregoing Debtors Motion for the Entry of an Order Authorizing the Debtors to Enter into Agreements with Pension Benefit Guaranty Corporation Terminating the Debtors Pension Plan and Appointing Pension Plan Trustee and Settling Related Claims. Dated: April 13, 2007 /s/ Ray C. Schrock Ray C. Schrock

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Served via Electronic Mail

CREDITOR NAME A Freeman Acord Inc Adrian City Hall Alice B Eaton Amalgamated Life Askounis & Borst PC Assistant Attorney General of Texas ATC Nymold Corporation Athens City Tax Collector Attorney for MDEQ Attorneys for Michigan DLEG UIA Autoliv ASP Inc Bailey & Cavalieri LLC Baker & Hostetler LLP Balch & Bingham LLP Barnes & Thornburg LLP Barnes & Thornburg LLP Bartlett Hackett Feinberg Basell USA Inc Beadle Burket Sweet & Savage PLC

CREDITOR NOTICE NAME John Livingston John Fabor Judith Greenspan Esq Thomas V Askounis Esq E Stuart Phillips Sherry Epstein Mike Keith Celeste Gill Asst Attorney General Roland Hwang Asst Attorney General Eric R Swanson Esq & Anthony J Nellis Esq Adam J Biehl & Yvette A Cox Wendy J Gibson & Brian A Bash Eric T Ray John T Gregg Patrick E Mears Frank F McGinn Scott Salerni Kevin M Smith

Benesch Friedlander Coplan & Aronoff LLP William E Schonberg & Stuart A Laven Jr Bernardi Ronayne & Glusac PC Rodney M. Glusac Bernstein Litowitz Berger & Grossman LLP Berry Moorman PC Berry Moorman PC Bird Svendsen Brothers Scheske & Pattison PC Borges & Associates LLC Bose McKinney & Evans LLP Bradley Arant Rose & White LLP Brendan G Best Brown Rudnick Berlack Israels LLP Bryan Clay Butzel Long PC Butzel Long PC Cahill Gordon & Reindel Cahill Gordon & Reindel Calhoun Di Ponio & Gaggos PLC Carlile Patchen & Murphy LLP Chambliss Bahner & Stophel PC Champaign County Collector Chris Kocinski City Of Eunice City Of Evart City Of Kitchener Finance Dept City Of Lowell City Of Muskegon City Of Port Huron City Of Rialto City Of Rochester Hills City Of Salisbury City Of Westland City Of Woonsocket Ri City Treasurer City Treasurer Steven Singer & John Browne Dante Benedettini Esq James Murphy Esq Eric J Scheske Wanda Borges Esq Jeannette Eisan Hinshaw Jay R Bender

EMAIL afreeman@akingump.com jlivingston@acordinc.com cityofadrian@iw.net aeaton@stblaw.com jgreenspan@amalgamatedlife.com taskounis@askborst.com stuart.phillips@oag.state.tx.us sepstein@atc-lighting-plastics.com finance@cityofathens.com gillcr@michigan.gov hwangr@michigan.gov eric.swanson@autoliv.com tony.nellis@autoliv.com Yvette.Cox@baileycavalieri.com Adam.Biehl@baileycavalieri.com wgibson@bakerlaw.com eray@balch.com john.gregg@btlaw.com pmears@btlaw.com ffm@bostonbusinesslaw.com scott.salerni@basell.com ksmith@bbssplc.com wschonberg@bfca.com slaven@bfca.com rodg@brgpc.com steve@blbglaw.com johnb@blbglaw.com dante@berrymoorman.com murph@berrymoorman.com bsbs@charter.net borgeslawfirm@aol.com jhinshaw@boselaw.com jbender@bradleyarant.com bbest@dykema.com rstark@brownrudnick.com ssmith@brownrudnick.com bryan_clay@ham.honda.com sharkey@butzel.com osborne@butzel.com wilkins@butzel.com jschaffzin@cahill.com rusadi@cahill.com kcc@cdg-law.com lxf@cpmlaw.com bbailey@cbslawfirm.com bneal@co.champaign.il.us christopher.j.kocinski@bofasecurities.com Eunicela@hotmail.com evartmanager@sbcglobal.net finance@city.kitchener.on.ca MYoung@ci.lowell.ma.us roberto.robles@postman.org cphdp@porthuron.org treasurer@rialtoca.gov treasury@rochesterhills.org finwebreq@salisburync.gov finance@ci.westland.mi.us webmaster@woonsocketri.org THovarter@cityofmarshall.com Ncowdrey@corunna-mi.gov skomrower@coleschotz.com mpolitan@coleschotz.com cathy.barron@constellation.com

Robert Stark & Steven Smith

Daniel N Sharkey & Paula A Osborne Matthew E Wilkins Esq Jonathan A Schaffzin Robert Usadi Kevin C Calhoun Leon Friedberg Bruce C Bailey Barb Neal The Mator at City Hall Roger Elkins City Manager Pauline Houston Lowell Regional Wastewater Bob Robles Treasurer's Office City Treasurer Kurt A Dawson City Assesor Treasurer Business License Div Pretreatment Division Tracy Horvarter

Cole Schotz Meisel Forman & Leonard PA Stuart Komrower & Mark Politan Constellation NewEnergy Inc Catherine Barron Esq

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CREDITOR NAME Crowell & Moring LLP Crowell & Moring LLP Cummings McClorey Davis & Acho PLC DaimlerChrysler DaimlerChrysler DaimlerChrysler Corporation Daniella Saltz Danning Gill Diamond & Kollitz LLP David H Freedman David Heller David Youngman Dennis C Roberts PLLC Dickinson Wright PLLC Dickinson Wright PLLC Dilworth Paxson LLP Dow Chemical Company Dow Chemical Company Duane Morris LLP DuPont Dworken & Bernstein Co LPA Dykema Gossett Rooks Pitts PLLC Earle I Erman Eastman & Smith Ltd Elias Meginnes Riffle & Seghetti PC Ellwood Group Inc Erin M Casey Erman Teicher Miller Zucker & Freedman PC Foley & Lardner LLP Frank Gorman Gail Perry Garan Lucow Miller PC Garan Lucow Miller PC Ge Capital GE Polymerland George E Schulman Gold Lange & Majoros PC Gold Lange & Majoros PC Hal Novikoff Handwork & Kerscher LLP Heather Sullivan Hewlett Packard Co Hewlett Packard Co Hunton & Williams LLP Hyman Lippitt PC InterChez Logistics Systems Inc International Union UAW Jacob & Weingarten PC Jaffe Raitt Heuer & Weiss PC Jaffe Raitt Heuer & Weiss PC James A Plemmons James C Edwards Jenner & Block LLP Jim Clough Joe LaFleur Joe Saad John A Harris John Green John J Dawson John S Sawyer Josef Athanas Joseph Delehant Esq

CREDITOR NOTICE NAME Joseph L Meadows Mark D Plevin K Kinsey

Kim R Kolb Esq George E Shulman

Dennis C Roberts Dawn R Copley Esq Michael C Hammer Anne Marie Kelley & Scott Freedman Kathleen Maxwell Lee H Sjoberg Brian W Bisignani Esq Bruce Tobiansky Howard S Rabb Esq Peter J Schmidt Matthew D Harper Brian J Meginnes & Janaki Nair Susan A Apel Esq

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Julie Teicher & Dianna Ruhlandt Judy A Oneill Esq

Kellie M Blair Esq Robert Vozza Esq Val Venable Elias T Majoros Stuart A Gold & Donna J Lehl Jeffrey M Kerscher Anne Marie Kennelly Ken Higman John D Burns Brian D Okeefe Mark Chesnes Niraj R Ganatra Robert K Siegel Alicia S Schehr Louis P Rochkind

Paul V Possinger & Peter A Siddiqui

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CREDITOR NAME Joseph M Fischer Esq K Crumbo K Schultz Kelley Drye & Warren LLP

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James S Carr Denver Edwards

EMAIL jfischer@carsonfischer.com kcrumbo@kraftscpas.com kschultz@tmmna.com jcarr@kelleydrye.com robert.bassel@kkue.com kim.stagg@nmm.nissan-usa.com Kimberly.Rodriguez@gt.com tah@kompc.com patrick.healy@lawdeb.com daniel.fisher@lawdeb.com stzouvelekas@lwtm.com lwalzer@angelogordon.com veronica.fennie@lfr.com dallas.bankruptcy@publicans.com houston_bankruptcy@publicans.com tim@litespeedpartners.com metkin@lowenstein.com ilevee@lowenstein.com vdagostino@lowenstein.com mcrosby@akingump.com jill.smith@macombcountymi.gov webmaster@misd.net mcarmel@kirkland.com mark.w.fischer@gm.com dhoopes@mayocrowe.com JRG@msblaw.com palucey@michaelbest.com mpaslay@wallerlaw.com mstamer@akingump.com treasReg@michigan.gov dmgbeachlaw@hawaii.rr.com Michael.Orourke@colaik.com mike.paslay@wallerlaw.com pborenstein@milesstockbridge.com fusco@millercanfield.com brucemiller@millercohen.com sarbt@millerjohnson.com tdunn@mindengross.com info@electionsquebec.qc.ca mied@dor.mo.gov jmorganroth@morganrothlaw.com maire@st-zotique.com rrios@munsch.com jbruinsma@mnds-pllc.com kschneider@niccausa.com Nick.Shah@cit.com nina.m.rosete@bofasecurities.com pbaylor@nutter.com rcolasuonno@orlaw.com ssoll@oshr.com phoffman@bofasecurities.com ksummers@psedlaw.com eagle.sara@pbgc.gov efile@pbgc.gov cfilardi@pepehazard.com lawallf@pepperlaw.com kistlerb@pepperlaw.com millerj@pepperlaw.com zuckerk@pepperlaw.com

Kemp Klein Umphrey Endelman & May PC Robert N Bassel Esq Kim Stagg Kimberly Davis Rodriguez Paul Magy Terrance Hiller Jr & Matthew Kupelian Ormond & Magy PC Thompson Law Debenture Trust Company of New York Patrick Healy & Daniel Fisher Leatherwood Walker Todd & Mann PC Seann Gray Tzouvelekas Leigh Walzer Levine Fricke Inc Linebarger Goggan Blair & Sampson LLP Linebarger Goggan Blair & Sampson LLP Litespeed Partners Lowenstein Sandler PC Lowenstein Sandler PC M Crosby Macomb County MI Macomb Intermediate School Marc J Carmel Mark Fischer Mayo Crowe LLC McShane & Bowie PLC Michael Best & Friedrich LLP Michael R Paslay Michael Stamer Michigan Department Of Treasury Mighty Enterprises Inc Mike O'Rourke Mike Paslay Miles & Stockbridge PC Miller Canfield Paddock & Stone PLC Miller Cohen Miller Johnson Minden Gross LLP Ministry Of Finance Corp Tax Branch Missouri Dept Of Revenue Morganroth & Morganroth PLLC Municipalite Du Village De Munsch Hardt Kopf & Harr PC Myers Nelson Dillon & Shierk PLLC NICCA USA Inc Nick Shah Nina Rosete Nutter McClennen & Fish LLP O Reilly Rancilio PC Otterbourg Steindler Houston & Rosen PC Paul Hoffman Pear Sperling Eggan & Daniels PC Pension Benefit Guaranty Corporation Pension Benefit Guaranty Corporation Pepe & Hazard LLP Pepper Hamilton LLP Pepper Hamilton LLP Pepper Hamilton LLP Elizabeth Weller John P Dillman Timothy Chen Michael S Etkin & Ira M Levee Vincent A DAgostino Esq Jill K Smith Asst Corp Counsel

David S Hoopes John R Grant Paul A Lucey

David M Gurewitz

Patricia A Borenstein Esq Timothy A Fusco Esq Bruce A Miller Thomas P Sarb & Robert D Wolford Timothy Dunn 15663507 Jeffrey Morganroth Lacolle Randall A Rios James R Bruinsma Karen Schneider

Peter Nils Baylor Esq Ralph Colasuonno & Craig S Schoenherr Sr Steven B Soll Esq Kevin N Summers Sara Eagle & Gail Perry Sara Eagle & Gail Perry Charles J Filardi Jr Francis J Lawall & Bonnie MacDougal Kistler J Gregg Miller & Linda J Casey Kenneth H Zucker

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CREDITOR NAME Peter Schmidt Peter V Pantaleo Phh Canada Inc Philip Dublin Phoenix Contracting Company Pillsbury Winthrop Shaw Pittman LLP Pillsbury Winthrop Shaw Pittman LLP Pillsbury Winthrop Shaw Pittman LLP Pillsbury Winthrop Shaw Pittman LLP Pitts Hay & Hugenschmidt PA Plunkett & Cooney PC Post & Schell PC Quadrangle Group LLC Quadrangle Group LLC R Aurand R J Sidman Ralph E McDowell Ravich Meyer Kirkman McGrath & Nauman PA Ray C Schrock Rex D Rainach Rhoades McKee Rick Feinstein Ricoh Canada Inc Riker Danzig Scherer Hyland & Perretti LLP RLI Insurance Company Robert J Diehl Jr Robert Weiss Robin Spigel Ronald A Leggett Ronald R Rose Sarah Eagle SC DHEC Schreeder Wheller & Flint LLP Sean P Corcoran Seiller Waterman LLC Seyburn Kahn Ginn Bess & Serlin PC Seyfarth Shaw LLP Sheehan Phinney Bass & Green PA Sheryl Toby Shumaker Loop & Kendrick LLP Sidley Austin Brown & Wood LLP Sills Cummis Epstein & Gross PC Spengler Nathanson PLL St Paul Travelers Stark County Treasurer State Of Michigan

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Tricia Sommers Craig A Barbarosh Patrick J Potter Esq Rick Antonoff Esq Lara Sheikh Esq Josh J May Esq William B Freeman Esq Robert P Pitts Esq Douglas C Bernstein Brian W Bisignani Esq Andrew Herenstein Patrick Bartels

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State Of Michigan State Of Michigan Steinberg Shapiro & Clark Stephen E Spence Stephen S LaPlante Stephen Tetro Steven A Siman PC Stevens & Lee PC

mfmcgrath@ravichmeyer.com rschrock@kirkland.com A Professional Law Corporation rainach@msn.com Dan E Bylenga Jr dbylenga@rhoadesmckee.com rick.feinstein@ubs.com legal@ricoh.ca Dennis J OGrady Joseph L Schwartz & Curtis M jschwartz@riker.com Plaza cplaza@riker.com Roy Die Roy_Die@rlicorp.com rdiehl@bodmanllp.com rweiss@honigman.com rspigel@willkie.com Collector Of Revenue leggettr@stlouiscity.com rrose@dykema.com eagle.sarah@pbgc.com whitehme@dhec.sc.gov Evander Whitehead chandlls@dhec.sc.gov J Carole Thompson Hord chord@swfllp.com sean.p.corcoran@delphi.com Richard M Rubenstein rubenstein@derbycitylaw.com Leslie Stein lstein@seyburn.com David C. Christian II dchristian@seyfarth.com Bruce Harwood bharwood@sheehan.com stoby@dykema.com David H Conaway dconaway@slk-law.com bguzina@sidley.com Bojan Guzina & Brian J Lohan blohan@sidley.com asherman@sillscummis.com Andrew H Sherman & Boris I Mankovetskiy bmankovetskiy@sillscummis.com Michael W Bragg Esq MBragg@SpenglerNathanson.com Vatana Rose vrosa@stp.com PA Powers PAPowers@co.stark.oh.us Michigan Dept Of Environmental Quality Environmental Assistance Div deq-ead-env-assist@michigan.gov Michigan Dept Of Treasury Collection Div Office of Financial Mgmt Cashiers Office treasReg@michigan.gov Michigan Unemployment Insurance Agency shuttkimberlyj@michigan.gov Mark Shapiro shapiro@steinbergshapiro.com US Trustee steve.e.spence@usdoj.gov laplante@millercanfield.com stephen.tetro@lw.com Steven A Siman sas@simanlaw.net Leonard P Goldberger Esq & John C Kilgannon Esq jck@stevenslee.com

Michael F McGrath Esq

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Stradley Ronon Stevens & Young LLP T Pryce Tax Administrator Textron Inc The Bank of New York Thomas Radom Tricia Sherick Troy R Taylor PLLC Tyco Capital Inc United Rentals Of Canada Inc United Steelworkers Varnum Riddering Schmidt & Howlett LLP Ville De Farnham Vinson & Elkins LLP Von Briesen & Roper SC Voridian Canada Company Warner Norcross & Judd LLP Warner Stevens LLP Wienner & Gould PC Wickes Manufacturing Co William C Andrews William G Diehl William J Byrne Willkie Farr & Gallagher LLP Wilmer Cutler Pickering Hale and Dorr LLP WL Ross & Co Womble Carlyle Sandridge & Rice PLLC Zeichner Ellman & Krause LLP

Paul Patterson Esq Jim Cambio Gary S Bush

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EMAIL ppatterson@stradley.com mdorval@stradley.com jtrotter@stradley.com tpryce@ford.com jcambio@tax.ri.gov afriedman@textron.com gbush@bankofny.com radom@butzel.com tsherick@honigman.com troytaylor@comcast.net Frank.Chaffiotte@cit.com e-rental@ur.com djury@usw.org mkshaver@varnumlaw.com msaintdenis@ville.farnham.qc.ca jwest@velaw.com rcrocker@vonbriesen.com blanderson@eastman.com mcruse@wnj.com mwarner@warnerstevens.com sgould@wiennergould.com dellenbogen@wiennergould.com stacy.fox@colaik.com kandrews@e-bbk.com wdiehl@e-bbk.com bbyrne@e-bbk.com alipkin@willkie.com rspigel@willkie.com andrew.goldman@wilmerhale.com pmachir@wlross.com RWhelehan@wcsr.com pjanovsky@zeklaw.com

Alan Lipkin & Robin Spigel Andrew N Goldman Esq Patrick Machir Rory D Whelehan Esq Peter Janovsky & Stuart Krause

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(no valid e-mail) CREDITOR NAME American General Finance Attorney General of MI Barclays Bank PLC Bayer Material Sciences BNY Midwest Trust Company BNY Midwest Trust Company Brown Corporation Burr & Forman LLP City Of Albemarle City Of Battle Creek City Of Longview City Of Marshall City Of Sterling Heights Clark Hill PLC Colbert & Winstead PC Colbond Inc Contrarian Capital Management LLC Coolidge Wall Womsley & Lombard Dayton Bag & Burlap Co El Paso Natural Gas Company Enerflex Solutions LLC Exxon Chemicals Intertex World Resources Trintex Corp Kilpatrick & Associates PC Lake Erie Products Lambert Leser Isackson Cook & Giunta PC McLane Graf Raulerson & Middleton PA Meridian Magnesium Miller Canfield Paddock & Stone PLC Missouri Dept of Revenue Office of Finance of Los Angeles Office of the US Attorney Paul Weiss Rifkind Wharton & Garrison LLP Pension Benefit Guaranty Corporation Pine River Plastics Inc Plastech Progressive Moulded Products Revenue Canada Riverfront Plastic Products Inc Select Industries Corp South Carolina Dept Of Revenue Southco Standard Federal Bank Stark Reagan PC State Of Michigan Teknor Financial Corporation TG North America Third Avenue Trust Town Of Lincoln Finance Office Treasurer Of State UBS Investment Bank Unique Fabricating Inc CREDITOR NOTICE NAME Matthew H Rick Mr David Bullock Linda Vesci Mary Callahan Roxane Ellwalleger Mark Ferderber Shannon E Hoff Utilities Department Income Tax Division Water Utilities Maurice S Evans City Manager James P Bulhinger City Treasurer E Todd Sable Amy Wood Malone Don Brown Seth Lax Steven M Wachstein Esq Jeff Rutter Michael J McGinnis Todd McCallum Law Dept Bill Weeks Richardo Kilpatrick Leonora Baughman Lilia Roman Susan M Cook Joseph A Foster Jose J Bartolomei Steven A Ginther Bankruptcy Auditor Julia Pidgeon Asst US Atty Stephen J Shimshak & Netanella T Zahavi Sara Eagle & Gail Perry Barb Krzywiecki Kelvin W Scott Esq Dan Thiffault George Tabry Christine Brown Sales & Use Tax Division Lorraine Zinar Holly Matthews Joseph A Ahern Linda King Bruce B Galletly Raymond Soucie W James Hall Joseph T Deters Rick Feinstein Tom Tekieke FAX 217-356-5469 517-373-2060 212-412-1706 412-777-4736 312-827-8542 312-827-8542 616-527-3385 205-458-5100 704-984-9445 269-966-3629 903-237-1004 269-781-3835 586-276-4077 313-965-8252 615-321-9555 828-665-5005 203-629-1977 937-223-6705 937-258-0029 713-420-5669 248-430-0134 281-588-4606 770-258-3901 248-377-0800 630-595-0336 989-894-2232 603-625-5650 517-663-2714 313-496-8452 573-751-7232 213-368-7076 313-226-3800 212-757-3990 202-326-4112 810-329-9388 313-792-2729 905-760-3371 902-432-6287 734-281-4483 937-233-7640 803-898-5147 610-361-6082 248-816-4376 248-641-9921 517-241-8077 401-725-5160 248-280-2110 212-735-0003 401-333-3648 614-644-7313 203-719-1090 248-853-8422

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(no valid e-mail) CREDITOR NAME Valiant Tool & Mold Inc Vericorr Packaging fka CorrFlex Packaging Viacom Inc William R Garchow CREDITOR NOTICE NAME General Fax Adriana Avila JoAnn Haller FAX 519-944-7748 586-939-4216 412-642-5614 989-832-0077

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Mike Keith Charlie Burrill Harry W Miller III Jay Truty Ms Amy Evans Thomas B Radom Attn Receiver General International Tax Service

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ADDRESS1 1062 S 4th Ave 590 Madison Ave PO Box 16253 PO Box 849 1609 Biddle Ave 709 Taylor St 3 1st National Plaza Ste 3300 Law Dept 100 Bloomfield Hills Pkwy Ste 100 1 5 Notre Ave 2204 Walkley Rd PO Box 8040 104 3rd St NW PO Box 9951 484 Middle Rd PO Box 818 200 South Main St 303 W Commonwealth Ave 711 Pennington Ave

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City of Kalamazoo City Of Los Angeles City Of Phoenix City Of Roxboro City Of St Joseph City Of Williamston City Treasurer Collector Of Revenue Collins & Aikman Corp Legal Dept Columbia Center 10th Fl 321 Settlers Rd 4500 Dorr St 885 Third Ave Ste 3300 7000 N Green Bay Ave Kellie Schone Jayson Macyda DuPont Legal D 7156 400 Renaissance Center One SeaGate 24th Fl 4611 North 32nd St 1084 Doris Rd 47690 E Anchor Ct PO Box 105499 PO Box 890691

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Cox Hodgman & Giarmarco PC Cunningham Dalman PC Dana Corp Davidson Kempner Capital Management LLC Dennis Reis LLC

William H Horton Esq & Sean M Walsh Esq Jeffrey K Helder Lisa A Wurster Esq

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Dold Spath McKelvie & DeLuca PC DuPont Dykema Gossett PLLC Eastman & Smith Ltd ER Wagner Manufacturing Fisher Automotive Systems Fisher America Inc Freudenberg Nok Inc

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Attn Civil Division Jerry Dittrich Terry Nardone Blue Point Capital Bpv Lowell LLC

Visteon Climate Control

Detroit Auburn Hills Warren Greenwichn PO Box 113 Holmesville Rantoul Van Buren Ste PO RFQ Office Township

In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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Served via Overnight Mail

(no valid e-mail or fax)

CREDITOR NAME

CREDITOR NOTICE NAME

ADDRESS1

ADDRESS2

CITY

STATE

ZIP

COUNTRY

W9 Lws Real Estate Limited Wachtell Lipton Rosen & Katz Wellington Green LLC Young & Susser PC

co Lincoln Harris Llc Hal Novikoff

Steven Susser P52940

10101 Claude Freeman Dr Ste 200 N 51 W 52nd St 31100 Telegraph Rd Ste 200 26200 American Dr Ste 305

Charlotte New York Bingham Farms Southfield

NC NY MI MI

28262-2337 10019 48025 48034

In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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EXHIBIT B

K&E 11750644.2

SETTLEMENT AGREEMENT BY AND AMONG COLLINS & AIKMAN CORPORATION AND ALL DIRECT AND INDIRECT SUBSIDIARIES AND PENSION BENEFIT GUARANTY CORPORATION This Settlement Agreement (this Agreement) made on April ___, 2007 (the Effective Date), by and among (i) Collins & Aikman Corporation, a Delaware corporation, and all of the members of its controlled group, as defined under the Employee Retirement Income Security Act of 1974 (as amended, ERISA) (collectively, C&A); and (ii) Pension Benefit Guaranty Corporation (PBGC) (together with C&A, each a Party, and collectively, the Parties). WHEREAS, on May 17, 2005, Collins & Aikman Corporation and certain of its subsidiaries (the Debtors) filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code, 11 U.S.C. 101-1330 (the Bankruptcy Code), in the United States Bankruptcy Court for the Eastern District of Michigan (the Bankruptcy Court) (jointly administered under Case No. 05-55927 (SWR)) (collectively, the Chapter 11 Cases) and are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code; WHEREAS, on December 22, 2006, the Debtors filed their First Amended Joint Plan (as amended, modified or superseded by any subsequent plan proposed in the Chapter 11 Cases, the Plan) and related disclosure statement (the Disclosure Statement); WHEREAS, on or about January 26, 2007, the Bankruptcy Court approved the Disclosure Statement with certain modifications and the Plan subsequently has been sent to creditors for their approval; WHEREAS, PBGC has determined, under 29 U.S.C. 1342, that the consolidated taxqualified United States defined benefit pension plan entitled the Collins & Aikman Pension Plan, sponsored by Collins & Aikman Products Co. (the Pension Plan) must be terminated and that the date of the Pension Plans termination shall be March 31, 2007; WHEREAS, on or about March 31, 2007, the PBGC delivered to C&A that certain: (i) Notice of Determination that the Pension Plan shall be terminated, a copy of which is attached hereto as Exhibit A; and, (ii) Agreement for Appointment of Trustee and Termination of Plan (the Termination & Trustee Agreement), a copy of which is attached hereto as Exhibit B; and,

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WHEREAS, the Plan classifies PBGC Claims in Class 6 and defines such claims as any and all Claims of the [PBGC] relating to the [Pension Plan], including any and all Claims arising from the termination of such pension plan; provided that PBGC Claims will not include any Administrative Claims or Priority Claims that may be held by the [PBGC]; WHEREAS, the Parties have reached a settlement and compromise with respect to their various disputes and controversies in connection with the Pension Plan; and this Agreement sets forth the principal terms and conditions under which C&A and PBGC will agree to a settlement and compromise of such disputes, all on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby mutually acknowledged, and intending to be legally bound hereby, the Parties do hereby agree as follows. 1. Consideration to PBGC. a. PBGC shall have an allowed administrative claim in the Chapter 11 Cases (the PBGC Administrative Claim) under Bankruptcy Code 503(b)(1) in the amount of $8,478,000, which amount represents all of the missed minimum funding contributions during the Chapter 11 Cases. The PBGC Administrative Claim shall be an Administrative Claim, as that term is defined in the Plan, which claim shall be paid on the Plans Effective Date (as that term is defined in the Plan) and shall not be included in the PBGC Claims classified in Class 6 under the Plan. PBGC shall have an allowed general, unsecured claim in the Chapter 11 Cases in the amount of $87,891,000 (the PBGC Unsecured Claim). The PBGC Unsecured Claim shall be an Unsecured Claim, as that term is defined in the Plan, and the amount of the PBGC Claims classified in Class 6 under the Plan shall be $87,891,000. The Plan shall state that "Notwithstanding anything in the Plan or any ballot cast by PBGC in support of the Plan, no claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities whatsoever against any entity other than the Debtors, the Debtors controlled group members and the Trusts with respect to the Pension Plan shall be released, exculpated, discharged, enjoined, or otherwise affected by the Plan, nor shall the entry of the Confirmation Order constitute the approval of any release, exculpation, discharge, injunction, or other impairment of any claims obligations, suits, judgments, damages, demands, debts, rights, cause of action or liabilities whatsoever against any entity other than the Debtors, the Debtors controlled group members and the Trusts with respect to the Pension Plan," and include any additional language necessary to give full force and effect to this language.

b.

c.

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2.

Waivers and Releases by PBGC. a. Minimum Funding Claims. PBGC shall be deemed to have settled and released any and all claims on its own behalf or on behalf of the Pension Plan against C&A arising from or related to any minimum funding obligations, including without limitation, any and all unpaid minimum funding contribution claims and claims for interest and penalties. Insurance Premiums. PBGC shall be deemed to have settled and released any claims against C&A for any PBGC insurance premiums, including, without limitation, any claims for interest and penalties arising from such liability. Unfunded Benefits Liability Claims. PBGC shall be deemed to have settled and released any and all claims on its own behalf or on behalf of the Pension Plan against C&A arising from or related to any unfunded benefits liability that may exist upon termination of the Pension Plan, including, without limitation, any claims for interest and penalties arising from such liability. Waiver of Other Claims. PBGC shall be deemed to have settled and released any and all claims on its own behalf or on behalf of the Pension Plan against C&A arising from or relating in any way to the Pension Plan. Release of Liens. PBGC shall be deemed to have fully, finally and forever released any purported liens against C&A that exist (or could have been asserted) under ERISA. Setoff Rights. PBGC shall not assert any alleged setoff rights against C&A in the Chapter 11 Cases.

b.

c.

d.

e.

f. 3.

Termination of Pension Plan. Subject to Paragraph 1: Upon the effective date of and in accordance with the Termination and Trusteeship Agreement: 1. The date of termination for the Pension Plan shall be March 31, 2007; and 2. PBGC shall become statutory trustee of the Pension Plan, C&A shall no longer have any plan administrator or similar powers, rights, duties or obligations in connection with the Pension Plan, and C&A will cooperate fully in conveying all records, assets, and property of the Pension Plan to PBGC, and providing PBGC with any other requested Pension Plan information.

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4. Restructuring Activities and Plan. Upon approval of this Agreement and the inclusion of language required by this Agreement in the Plan, PBGC shall affirmatively support, in a manner not inconsistent with this Agreement or the Bankruptcy Code, including, without limitation, Section 1125 of the Bankruptcy Code, (a) the Plan and (b) any of the Debtors' motions or other requests for relief from the Bankruptcy Court related to the approval and performance of (i) this Agreement or (ii) the Termination & Trusteeship Agreement. Nothing herein shall limit or impair PBGC in the exercise of its fiduciary duties in its capacity as a member of the Official Committee of Unsecured Creditors. Nothing herein shall limit or impair PBGCs rights to object to the claims of other creditors. 5. Professional Fees and Expenses. Each Party shall be responsible for any and all professional fees and expenses incurred in connection with the termination of the Pension Plan and the preparation of this Agreement, the Termination & Trustee Agreement and the performance of the obligations thereunder. 6. Conditions Precedent. This Agreement is subject to and contingent upon the approval of the Bankruptcy Court. In the event the Bankruptcy Court does not approve the Agreement, the Agreement and the actions taken by any party pursuant to the Agreement shall be void ab initio. The Parties shall use commercially reasonable efforts to obtain the Bankruptcy Courts approval of the Agreement. 7. Further Assurances. From time to time, as and when requested by either Party hereto, the other Party hereto shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions (subject to any limitations set forth in this Agreement), as such other Party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement. 8. Disputes. a. No Litigation. Except as otherwise provided herein, each Party hereto agrees that it shall not commence or proceed with any litigation against the other Party or take any action inconsistent with the terms of this Agreement. Jurisdiction Over Disputes. All disputes arising between the Parties under this Agreement, shall, prior to the issuance of a final decree from the Bankruptcy Court closing the Chapter 11 Cases, be resolved by the United States Bankruptcy Court for the Eastern District of Michigan. Termination Notice. This Agreement may be terminated by either Party, on written notice, upon the occurrence of any material breach of the other Partys obligations under this Agreement or of any failure of any condition under this Agreement, unless such breach or failure of condition is cured to the reasonable satisfaction of the other Party within ten (10) days of such notice. In the event of such termination, this Agreement shall

b.

c.

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become null and void in its entirety, and the Parties shall thereafter be governed by the status quo ante without regard to this Agreement. 9. Miscellaneous. a. Authority. Subject to Bankruptcy Court approval in the Chapter 11 Cases, C&A represents that it has the authority to enter into this Agreement and to enter into the transactions contemplated thereby. Waiver. Except with respect to the requirement for Bankruptcy Court approval or judicial determination, each Party may waive in writing the benefit of the other Partys compliance with any particular provision of this Agreement. No waiver by a Party with respect to any breach or default or of any right or remedy, and no course of dealing or performance, will be deemed to constitute a continuing waiver of any other breach or default or of any other right or remedy, unless such waiver is expressed in writing signed by the Party to be bound. Failure of a Party to exercise any right will not be deemed a waiver of such right or rights in the future. Non-Severability. Each of the terms of this Agreement are a material and integral part hereof. Should any provision of this Agreement be held unenforceable or contrary to law, the entire Agreement shall be deemed null and void. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given upon the earlier of receipt and (i) three (3) business days after deposit in the United States mail, registered or certified mail, postage prepaid, return receipt requested, (ii) one (1) business day after deposit with Federal Express or similar overnight courier or (iii) same day if delivered by hand, and addressed as provided below or such other address as either Party may, from time to time, specify in writing to the other. (i) If to C&A: COLLINS & AIKMAN CORPORATION 26533 Evergreen Road, Suite 900 Southfield, MI 48076 Attention: John Boken Fax: (248) 728-2112 With a copy to: Kirkland & Ellis 200 East Randolph Drive Chicago, IL 60601 Fax: (312) 861-2200
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b.

c.

d.

Attention: David Eaton Ray Schrock Marc Carmel (ii) If to PBGC: PENSION BENEFIT GUARANTY CORPORATION Office of the Chief Counsel 1200 K Street, NW, Suite 340 Fax: (202) 326-4112 Attention: Sara Eagle e. Governing Law. Federal law shall govern this agreement, and to the extent applicable and not inconsistent therewith, the law of the State of Michigan shall apply. Amendments. The Parties may amend or modify this Agreement in a writing executed by both Parties. Counterparts. This Agreement may be executed in one or more counterparts, each of which together or separately shall constitute an original, and when taken together, shall be considered one and the same binding agreement. Acceptance of Facsimile Signatures. Delivery of an executed signature page of this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart hereof.

f. g.

h.

(signature pages to follow)

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IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the date first written above.

COLLINS & AIKMAN CORPORATION, on behalf of itself and C&A (as defined above) By: Its Duly Authorized Agent Name:______________________________ Title:_______________________________ Dated: _____________________________ PENSION BENEFIT GUARANTY CORPORATION By: Its Duly Authorized Agent Name:______________________________ Title:_______________________________ Dated: _____________________________

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EXHIBIT C

K&E 11750644.2

EXHIBIT D

K&E 11750644.2