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

et al. ) ) Debtors, ) __________________________________________) ) GEORGIA POWER COMPANY, ) ) Movant ) ) v. ) ) COLLINS & AIKMAN CORPORATION, et al., ) ) Respondents. ) __________________________________________)

Case No. 05-55927 (SWR) Chapter 11

REQUEST FOR ALLOWANCE AND PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM OF GEORGIA POWER COMPANY
Georgia Power Company ("Georgia Power"), in support of its Request for Allowance and Payment of Administrative Expense Claim (the "Application"), states as follows: BACKGROUND AND RELIEF REQUESTED 1. On May 17, 2005 (the "Petition Date"), Collins & Aikman Corporation and

those of its subsidiaries that were debtors and debtors-in-possession in these proceedings (collectively the "Reorganized Debtors") each filed a voluntary petition for relief under Chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). 2. On July 18, 2007, the Court entered an order (the "Confirmation Order")

confirming the First Amended Joint Plan of Collins & Aikman Corporation and Its Debtor Subsidiaries (the "Plan"). The Plan became effective on October 12, 2007.

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3.

Prior to the Petition Date, Georgia Power and the Reorganized Debtors entered

into a master contract for electric utility service (the "Master Contract," a copy of which is attached hereto as Exhibit "B") governing one service location, thus establishing a Special Service Account (the "Account") for this location. Pursuant to the Master Contract, the

Account was billed at a special rate known as Fixed Pricing Alternative ("FPA"). The Master Contract was an executory contract capable of assumption. 4. Subsequent to the bankruptcy filing, Georgia Power continued to provide electric

utility services to the Reorganized Debtors at the Account's location. Georgia Power billed the Account using the FPA rate for the period from May 17, 2005 to June 5, 2007, the date on which the Reorganized Debtors sold substantially all of the facility's assets at the Account's location (the "Post-petition Period"). 5. Pursuant to the Plan, the Reorganized Debtors rejected the Master Contract. Had

the Account not been governed by the Master Contract, and thus been ineligible for the FPA rate, the electric service consumed at the Account's location would have been billed at a standard Power and Light - Large ("PLL") rate. When compared with the amounts billed on the Account at the FPA rate, the amounts that would have been billed at the PLL rate are $473,833.92 higher. 6. Attached hereto as Exhibit "C" is the Affidavit of James Maynard attaching (a)

true and correct copies of the bills (or in the instance where an actual image of the customer bill is unavailable, a company document representative of the bill sent to the Reorganized Debtors) for the Account (and certifying the accuracy thereof); and (b) a spreadsheet comparing the amounts billed on the Account during the Post-petition Period using the FPA rate with the amounts that would have been billed using the PLL rate.

7.

Georgia Power now seeks the allowance of an administrative expense claim

pursuant to 11 U.S.C. 503(b)(1)(A) in the amount of $473,833.92, which amount represents the difference between the amounts billed on the Account at the FPA rate and the amounts that would have been billed at the PLL rate during the Post-petition Period (the "Difference"). As set forth below, the Difference is entitled to administrative expense priority treatment. BASIS FOR RELIEF REQUESTED 8. Pursuant to Section 503(b)(1)(A), there shall be allowed, as an administrative

expense claim, the "actual, necessary costs and expenses of preserving the estate." 11 U.S.C. 503(b)(1)(A). The Difference represents the Reorganized Debtors' unpaid portion of the

amounts due for services provided by Georgia Power, which services were "actual, necessary costs and expenses of preserving the estate." 9. Pursuant to Section 365 of the Bankruptcy Code, a debtor "may assume or reject

any executory contract." 11 U.S.C. 365. A debtor is afforded until the time of confirmation of a plan of reorganization to assume or reject unless a court orders otherwise on request of a party to the contract. In re Globe Metallurgical, Inc., 312 B.R. 34, 38 (Bankr. S.D.N.Y. 2004) (citing 11 U.S.C. 365(d)(2)). Section 365(g) provides that rejection of an executory contract

constitutes a breach of such contract immediately prior to the filing of a petition for relief. Id. "Although the right of assumption or rejection exists, when a debtor makes use of the subject of the executory contract prior to its rejection, the parties to the executory contract may be entitled to an administrative claim pursuant to 11 U.S.C. 503." Id. (citing 11 U.S.C. 503(b)(1)(A)); see also In re Thatcher Glass Corp., 59 B.R. 797 (Bankr. Conn. 1986). The contract claim for damages may be given administrative priority upon a showing by the claimant of entitlement to an administrative claim, i.e., that the services provided benefit to the estate and that the expense

was an actual and necessary expense of preserving the estate as required by Section 503(b)(1)(A) of the Bankruptcy Code. See Globe Metallurgical, 312 B.R. at 39. 10. Pursuant to the Reorganized Debtors' Plan, the Master Contract was rejected.

However, the Reorganized Debtors "[made] use of the subject of the [Master Contract] prior to its rejection," and consequently throughout the entire Post-petition Period. Further, the services provided under the Master Contract, i.e., the provision of electricity, provided a benefit to the Reorganized Debtors' bankruptcy estates. Specifically, the post-petition electric service provided by Georgia Power pursuant to the Master Contract allowed the Reorganized Debtors to continue business operations, generate revenue for the benefit of their estates and preserve assets located on the premises where services were provided by Georgia Power. Georgia Power is entitled to an administrative expense claim for such services, which services represent "actual, necessary costs and expenses of preserving the estate," with the sole remaining inquiry being the amount of such claim. 11. As stated earlier, Georgia Power's administrative expense claim should be

allowed in an amount equal to the Difference of $473,833.92. Support for allowance of an administrative expense claim in the amount of the Difference can be found in In re Thatcher Glass Corp., 59 B.R. 797, 800 (Bankr. D. Conn. 1986) (holding that post-petition utility service for a business debtor who rejects a utility contract may be billed retroactively during the postpetition period at the non-contract rate for industrial customers, specifically stating the following: "In a sense, Thatcher seeks to assume the IS rate and reject the rest of the contract, a practice which has been disallowed by other courts and will not be permitted here."); accord, Sharon Steel Corp. v. National Fuel Distribution Corp., 872 F.2d 36 (3d Cir. 1989). Georgia Power's non-contract rates for industrial customers include the PLL rate. Thus, the Difference

(i.e., the difference between the FPA rate under the Master Contract and the PLL rate) is the proper measure of Georgia Power's administrative expense claim. WHEREFORE, Georgia Power Company respectfully requests that this Court enter an Order allowing a Chapter 11 administrative expense claim in the amount of $473,833.92 and directing the Reorganized Debtors to pay such amount to Georgia Power, and granting such other relief as the Court deems equitable and proper. Respectfully submitted, VARNUM, RIDDERING, SCHMIDT & HOWLETT LLP Attorneys for Georgia Power Company Date: November 9, 2007 By: s/ Bryan R. Walters Bryan R. Walters (P58050) Mary Kay Shaver (P60411) Business Address and Telephone: Bridgewater Place, P.O. Box 352 Grand Rapids, MI 49501-0352 (616) 336-6000 brwalters@varnumlaw.com mkshaver@varnumlaw.com

TROUTMAN SANDERS LLP Attorneys for Georgia Power Company Thomas R. Walker (GA Bar No. 732755) Kelly E. Culpin (GA Bar No. 142677) Business Address and Telephone: 600 Peachtree Street, NE, Suite 5200 Atlanta, GA 30308 (404) 885-3000
1531463_1.DOC

EXHIBIT "A"

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION - DETROIT In re: ) ) COLLINS & AIKMAN CORPORATION, et al. ) ) Debtors, ) __________________________________________) ) GEORGIA POWER COMPANY, ) ) Movant ) ) v. ) ) COLLINS & AIKMAN CORPORATION, et al., ) ) Respondents. ) __________________________________________)

Case No. 05-55927 (SWR) Chapter 11

ORDER GRANTING REQUEST FOR ALLOWANCE AND PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM OF GEORGIA POWER COMPANY Georgia Power Company ("Georgia Power") having filed its Request for Allowance and Payment of Administrative Claim, notice having been provided pursuant to L.B.R. 9014-1, the Reorganized Debtors having asserted no objection to the relief requested, and no one else objecting; it is hereby ORDERED that Georgia Power is allowed a Chapter 11 administrative expense claim in the amount of $473,833.92; and it is further ORDERED that the Reorganized Debtors are authorized and directed to remit the $473,833.92 allowed herein to Georgia Power within fifteen (15) days of the date of entry of this Order; and it is further

ORDERED that a copy of this Order shall be sent by the Clerk of Court to all persons shown on the Certificate of Service attached to the Application. IT IS SO ORDERED this _____ of ______________, 2007.

____________________________________ STEVEN W. RHODES CHIEF JUDGE UNITED STATES BANKRUPTCY COURT Prepared and presented by: VARNUM, RIDDERING, SCHMIDT & HOWLETT LLP Attorneys for Georgia Power Company Bryan R. Walters (P58050) Mary Kay Shaver (P60411) Business Address and Telephone: Bridgewater Place, P.O. Box 352 Grand Rapids, MI 49501-0352 (616) 336-6000

TROUTMAN SANDERS LLP Attorneys for Georgia Power Company Thomas R. Walker (GA Bar No. 732755) Kelly E. Culpin (GA Bar No. 142677) Business Address and Telephone: 600 Peachtree Street, NE, Suite 5200 Atlanta, Georgia 30308 (404) 885-3000
1532601_1.DOC