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

Debtors. ) ) ) ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) Honorable Steven W. Rhodes

OBJECTION AND RESERVATION OF RIGHTS OF POLYONE CORPORATION AND CERTAIN OF ITS AFFILIATES TO THE DEBTORS' ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS IN CONNECTION WITH THE PROPOSED INTERIOR PLASTICS GROUP SALE PolyOne Corporation and certain of its affiliates1 (collectively "PolyOne"), through its undersigned counsel, hereby files this objection and reservation of rights (the "Objection") pursuant to section 365 of title 11 of the United States Code (the Bankruptcy Code), to the proposed assumption and assigment of certain Executory Contracts (defined below) of PolyOne, as requested in the Debtors' Motion for Entry of Orders Approving Bidding Procedures, Sale of Certain of the Assets of Debtors' Interior Plastics Group Free and Clear of Liens, Claims, Encumbrances and Interests and Related Relief (Docket No. 4408, the "Sale Motion"). In support of the Objection, PolyOne respectfully states the following: BACKGROUND 1. 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

The PolyOne entities include: PolyOne Colors Group, PolyOne de Mexico SA de CV, PolyOne Distribution, PolyOne Engineered Films, Inc., and PolyOne Polymer Coating Systems. Additionally, PolyOne files this objection on behalf of O'Sullivan Films, Inc. ("O'Sullivan"), as PolyOne holds a substantial interest in the claims that O'Sullivan has against the Debtors' estates.
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and managing their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 2. Prior to the Petition Date, various PolyOne entities supplied the Debtors with

certain component parts that the Debtors integrated into automotive instrument panels and other systems for the eventual sale to automobile manufacturers. This commercial relationship has continued postpetition and is governed by various long-term supply programs and other Executory Contracts. A number of the agreements that PolyOne has in place relate to the Debtors' Interior Plastics Group, which group is the subject of the Sale Motion. 3. In connection with the Debtors' Sale Motion, on or about April 26, 2007, the

Debtors' served their Notice of Sale of Assets of Debtors' Interior Plastics Group Free and Clear of Liens, Claims, Encumbrances and Interests (the "Cure Notice"). Each individual Cure Notice contained, attached as an exhibit, a listing of alleged executory contracts (the "Executory Contracts")2 of the particular PolyOne entity, with certain cure amounts representing the monetary defaults that the Debtors believed they must cure in order to assume and assign the executory contracts. A correct and true chart listing all of the Cure Notices that PolyOne received3 is attached hereto as Exhibit A. 4. Notwithstanding PolyOne's combined prepetition claim for $2,194,301,4 each

Executory Contract has a cure amount listed at zero. Additionally, the description of the

PolyOne neither admits nor denies the characterization of the agreements listed in the Cure Notices as "executory" as contemplated in 11 U.S.C. 365. 3 PolyOne was able to receive a complete set of Cure Notices through direct contact with Debtors' counsel. PolyOne's counsel received the Cure Notices on May 7, 2007. Each Cure Notice is addressed generally to "Officer and/or General Counsel" and it is not entirely clear at this point whether the address information is accurate, and whether adequate due process is being afforded to PolyOne. 4 Such amount is based on the aggregate proof of claim amounts for PolyOne Corporation, PolyOne Colors Group, PolyOne Distribution and PolyOne Engineered Films, Inc.

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Executory Contracts in the Cure Notices varies in detail and in certain circumstances is insufficient.5 5. Including O'Sullivan, there are 7 different corporate entities that may be affected

by the Sale Motion and accompanying Cure Notices. Typically, PolyOne has various long term supply agreements and programs that may govern the Executory Contracts. PolyOne is currently in the process of reviewing its books and records to identify if defaults exist with respect to the Executory Contracts listed in the Cure Notices, and whether such Executory Contracts are part of a larger contract or program with PolyOne that must be assumed as a whole, as opposed to "cherry picking" the favorable portions of such Executory Contracts. 6. In light of the pending objection deadline, PolyOne hereby objects and reserves

its rights with respect to the Sale Motion and Cure Notices. PolyOne does not believe that the Debtors have satisfied the mandatory provisions of 11 U.S.C. 365(b)(1). After PolyOne's review of its books and records, which review PolyOne is undertaking on an expedited basis, PolyOne reserves the right to withdraw this Objection or portions thereof. 7. Section 365(b)(1) of the Bankruptcy Code governs the ability of the Debtors to

assume and assign contracts and leases. Section 365(b)(1) provides: If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee(A) cures, or provides adequate assurance that the trustee will promptly cure, such default...; (B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default; and (C) provides adequate assurance of future performance under such contract or lease. 11 U.S.C. 365(b)(1).

See Exhibit A and multiple references to "Repetitive Supplier POs," which is not a meaningful description that enables PolyOne to efficiently locate the Executory Contract in question.

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8.

Through this Objection, PolyOne requests that the Court deny the Debtors' Sale

Motion as it relates to the purported attempt to cure the Executory Contracts with PolyOne. It is quite possible, if not likely, that the Executory Contracts listed are merely a small piece of a larger program or agreement that the Debtors must assume as a whole. Moreover, PolyOne objects on the basis that the proposed purchaser, Cadence Innovation LLC, has not provided adequate assurance of future performance with respect to the Executory Contracts. Lastly, PolyOne requests that until it has adequately reviewed its books and records, that its rights be preserved in connection with the Sale Motion and Cure Notices. WHEREFORE, PolyOne respectfully requests that the Court (i) deny the Debtors' Sale Motion as it relates to the purported attempt to cure, assume and assign the Executory Contracts with PolyOne, (ii) preserve PolyOne's rights in connection with the assumption aspect of the Sale Motion and Cure Notices, and (iii) grant such other and further relief as is just and appropriate. Respectfully submitted, Dated: May 11, 2007 /s/ Robert C. Folland Robert C. Folland (Ohio Bar # 0065728)6 Jeremy M. Campana (Ohio Bar # 0074541) THOMPSON HINE LLP 3900 Key Center 127 Public Square Cleveland, Ohio 44114-1291 (216) 566-5500 (216) 566-5800 (facsimile) rob.folland@thompsonhine.com jeremy.campana@thompsonhine.com Counsel for PolyOne Corporation and Certain of its Affiliates

Mr. Folland is a member in good standing of the bar of the United States District Court for the Eastern District of Michigan.

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CERTIFICATE OF SERVICE I hereby certify that on this 11th day of May 2007, a true and correct copy of the Objection and Reservation of Rights of PolyOne Corporation and Certain of its Affiliates to the Debtors' Assumption and Assignment of Executory Contracts in Connection with the Proposed Interior Plastics Group Sale was served via the Court's ECF system upon those parties registered to receive notice thereby and via regular mail on the following parties: Kirkland & Ellis LLP Attn: David L. Eaton Ray C. Schrock Marc J. Carmel 200 East Randolph Drive Chicago, IL 60601 Carson Fischer, PLC Attn: Joseph M. Fischer 4111 West Andover Road West Second Floor Bloomfield Hills, MI 48302 Wachtell, Lipton, Rosen & Katz Attn: Harold S. Novikoff 51 West 52nd Street New York, NY 10019 Dykema Gossett PLLC Attn: Ronald L. Rose 400 Renaissance Center Detroit, MI 48423

/s/ Robert C. Folland One of the Attorneys for PolyOne Corporation and its Affiliates

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EXHIBIT A

COLLINS & AIKMAN CURE NOTICES

Cadence ID# Counterparty PolyOne PolyOne Colors Group PolyOne Colors Group PolyOne Corporation PolyOne Corporation PolyOne Corporation PolyOne Corporation PolyOne Corporation PolyOne Corporation PolyOne de Mexico SA de CV Repetitive Supplier PO NDA Nondisclosure agreement NDA Nondisclosure agreement NDA Nondisclosure agreement C&A Tooling PO to Vendor 61805 Description of Agreement

Cure Amount $0 $0 $0 $0 $0 $0 $0 $0

534

5950

Plant Level Supplier PO PO #B00015 Repetitive Supplier PO

9258

3249

3250

3251

4168

Plant Level Supplier PO PO #27260 Discrete Supplier PO Plant Level Supplier PO PO #B00013 Repetitive Supplier PO Repetitive Supplier PO Sched - 1142900AA1T3 CC PP C719-35NHP

5948

9259

$0 $0

11583

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Cadence ID# Counterparty PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV Sched - 1142900AA6X0 - CC PP C719-35NHP Sched - 1142900AAJA6 - CC PP C719-35NHP Sched - 1142940AA1T5 - CC PC ABS 2000EZ Sched - 1142940AA1TB - CC PC ABS 2000EZ Sched - 1142940AA4T3 - CC PC ABS 2000EZ Sched - 1142940AA5B8 - CC PC ABS 2000EZ Sched - 1142940AA6X0 - CC PC ABS 2000EZ Sched - 1142940AAJA6 - CC PC ABS 2000EZ Sched - 1142960AA1T3 - CC HH ABS 3325MT Sched - 1142960AA1T5 - CC HH ABS 3325MT Sched - 1142960AA1TB - CC HH ABS 3325MT Sched - 1142960AA4T1 - CC HH ABS 3325MT Sched - 1142900AA5B8 - CC PP C719-35NHP Sched - 1142900AA4T3 - CC PP C719-35NHP Sched - 1142900AA4T1 - CC PP C719-35NHP Sched - 1142900AA1TB CC PP C719-35NHP $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Description of Agreement Cure Amount

11584

11585

11586

11587

11588

11589

11590

11591

11592

11593

11594

11595

11596

11597

11598

11599

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Cadence ID# Counterparty PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV Sched - 1143070AAJA6 - CC ABS 342Z Sched - 1129080AA1T3 - CC PP AP 7810-HS MED LT Sched - 1129080AA1TB - CC PP AP 7810-HS LT STON Sched - 1129080AA4T1 - CC PP AP 7810-HS CAMEL Sched - 1129080AA4T3 - CC PP AP 7810-HS MED CAM Sched - 1129080AA6X0 - CC PP AP 7810-HS SAND Sched - 1129080AA5B8 - CC PP AP 7810-HS CHARCOA Sched - 1151120AA - ADDITIVE 2% POLYONE Sched - 1142940AA1T3 - CC PC ABS 2000EZ Discrete Supplier PO - *1 - Pigmento Genrico Black 2447 Prov. POlione Sched - 1143070AA5B8 - CC ABS 342Z Sched - 1143070AA1T5 - CC ABS 342Z Sched - 1142960AA6X0 - CC HH ABS 3325MT Sched - 1142960AA5B8 - CC HH ABS 3325MT Sched - 1142960AA4T3 - CC HH ABS 3325MT $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Description of Agreement Cure Amount

11600

11601

11602

11603

11604

11605

11606

11607

11608

11609

11610

11611

11612

11613

11614

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Cadence ID# Counterparty PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne de Mexico SA de CV PolyOne Distribution PolyOne Distribution PolyOne Distribution Plant Level Supplier PO - PO #: 2427 Sched Plant Level Supplier PO - PO #: 9586 - Discrete Supplier PO Plant Level Supplier PO - PO #: 28299 - Discrete Supplier PO Plant Level Supplier PO - PO #: 28938 - Discrete Supplier PO Plant Level Supplier PO - PO #: 29027 - Discrete Supplier PO Plant Level Supplier PO - PO #: 29208 Sched Plant Level Supplier PO - PO #: 25907-02 Sched Rantoul Repetitive PO - PO #: 14235 - RESINS: ABS Counsel Repetitive Supplier PO Repetitive Supplier PO - RESINS: ABS Sched - 20008043 - PolyOne - Med Graph PP Sched - 20004142 - PolyOne - PR Tan PP AYCW Sched - 20004136 - PolyOne - Ebony PP ZHE4 Sched - 20001800 - POLYONE BLACK PP JA6A $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Description of Agreement Cure Amount

14644

14645

14646

14647

3415

3735

4320

4397

4406

4436

5863

7778

13038

13039

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Cadence ID# Counterparty PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne Engineered Films, Inc. PolyOne POlymer Coating Systems PolyOne POlymer Coating Systems PolyOne POlymer Coating Systems PolyOne POlymer Coating Systems C&A Tooling PO to Vendor 41013 C&A Tooling PO to Vendor 39932 Plant Level Supplier PO - PO #: 1779 Sched Repetitive Supplier PO Plant Level Supplier PO - PO #: 70816 Repetitive Supplier PO Plant Level Supplier PO - PO #: 71274 Repetitive Supplier PO Plant Level Supplier PO - PO #: 84263 Repetitive Supplier PO C&A Tooling PO to Vendor 42352 C&A Tooling PO to Vendor 43536 C&A Tooling PO to Vendor 45584 C&A Tooling PO to Vendor 55954 C&A Tooling PO to Vendor 60164 C&A Tooling PO to Vendor 62823 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Description of Agreement Cure Amount

487

617

837

1222

1291

1372

1409

1439

3408

13040

5030

5306

5399

8812

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Cadence ID# Counterparty PolyOne POlymer Coating Systems PolyOne POlymer Coating Systems PolyOne POlymer Coating Systems PolyOne POlymer Coating Systems O'Sullivan Films O'Sullivan Films O'Sullivan Films O'Sullivan Films O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. Repetitive Supplier PO Plant Level Supplier PO - PO #: 5772 Sched Sched - 1101360AA - VINIL BOLSTER GMT GRAY Sched - 1101370AA - VINIL BOLSTER GMT Sched - 1150680AA - VINIL BOLSTER GMT Plant Level Supplier PO - PO #: 70932 Repetitive Supplier PO Plant Level Supplier PO - PO #: 71008 Repetitive Supplier PO Plant Level Supplier PO - PO #: 83880 Repetitive Supplier PO Repetitive Supplier PO 6 Repetitive Supplier PO Repetitive Supplier PO Repetitive Supplier PO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Description of Agreement Cure Amount

8813

8814

8815

8816

3463

11540

11541

11542

5088

5127

5357

8769

8770

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Cadence ID# Counterparty O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. Repetitive Supplier PO Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Counsel Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier PO Repetitive Supplier PO Repetitive Supplier PO Repetitive Supplier PO Repetitive Supplier PO Repetitive Supplier PO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Description of Agreement Cure Amount

8771

8772

8773

8774

8775

8776

8777

10530

10531

10532

10533

10534

10535

10536

10537

10538

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Cadence ID# Counterparty O'Sullivan Films Inc. O'Sullivan Films Inc. O'Sullivan Films Inc. Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED Repetitive Supplier POs - VINYL: ROLLED $0 $0 $0 Description of Agreement Cure Amount

10539

10540

10541

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