Nunc Pro Tunc: Hearing Date (If Necessary) : July 13, 2006 at 2:00 P.M Objection Deadline: July 10, 2006 at 4:00 P.M

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
Hearing Date (if necessary): July 13, 2006 at 2:00 p.m Objection Deadline: July 10, 2006 at 4:00 p.m.
DEBTORS SUPPLEMENTAL APPLICATION AUTHORIZING THE DEBTORS TO EXPAND THE SCOPE OF THEIR RETENTION OF DELOITTE TAX LLP NUNC PRO TUNC TO MAY 16, 2006 The above-captioned debtors (collectively, the Debtors) hereby apply to the Court (the Supplemental Application) for the entry of an order, substantially in the form attached hereto as Exhibit A, authorizing the Debtors to expand the scope of their retention of Deloitte Tax LLP (Deloitte Tax) nunc pro tunc to May 16, 2006. In support of this Supplemental Application, the Debtors respectfully represent as follows:
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. 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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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 are sections 105(a), 327(a) and 328
of the Bankruptcy Code, 11 U.S.C. 101-1330 (the Bankruptcy Code) and Rules 2014, 2016 and 5002 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and Rule 2014-1 of the Local Rules of the Bankruptcy Court for the Eastern District of Michigan (the Local 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 Sates Trustee appointed an official committee of
unsecured creditors pursuant to section 1102 of the Bankruptcy Code (the Committee). 6. The Debtors and their non-debtor affiliates are leading global suppliers of
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 D Automobiles, Toyota SA and Volkswagen AG. 7. On November 10, 2005, the Court approved the Debtors application to retain and
employ Deloitte Tax as the Debtors tax service providers nunc pro tunc to September 1, 2005
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[Docket No. 1653]. Since its retention, Deloitte Tax has provided tax services including, without limitation, assistance with federal tax effects of bankruptcy filing, general corporate tax advisory assistance, IRS examination services, assistance with state tax post-bankruptcy emergence planning, contingent fee strategic property tax review services, international assignment services advisory assistance and other related or similar tax services. 8. In connection with the Debtors preparation of their 2005 tax returns, the Debtors
have sought the advice and services of Deloitte Tax. The Debtors management believes that Deloitte Tax is well qualified to provide these particular tax return preparation services on their behalf, given its extensive knowledge and expertise in tax services as well as its familiarity with the Debtors operations. 9. In order to facilitate compliance with 2005 tax return deadlines, Deloitte Tax has
been responsive to the Debtors requests and, to protect the Debtors interests, Deloitte Tax has commenced performing such services since May 16, 2006. Nunc pro tunc retention effective as of May 16, 2006 will assure Deloitte Tax that it is not penalized for the necessary delay in the filing of this Supplemental Application. Relief Requested 10. By this Supplemental Application, the Debtors request authority to retain and
employ Deloitte Tax for an expanded scope of its retention pursuant to sections 327 and 328 of the Bankruptcy Code, Bankruptcy Rules 2014, 2016 and 5002 and Local Rule 2014-1 nunc pro tunc to May 16, 2006. The Debtors have requested that Deloitte Tax provide it with tax co-sourcing services, including but not limited to the preparation of the Debtors 2005 federal income tax returns. 11. Supplemental In support of this Supplemental Application, the Debtors submit (a) the Verified Statement of Scott L. Shekell, a member of Deloitte Tax (the
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Supplemental Statement), a copy of which is attached hereto as Exhibit B; and (b) the 2005 federal tax return preparation services addendum (the Addendum) (Scope of Tax Services Exhibit H) to the engagement letter of September 1, 2005 (the Engagement Letter) between Deloitte Tax and the Debtors, a copy of which, together with a copy of the Addendum, is attached hereto as Exhibit C. The Supplemental Statement and the Addendum to the Engagement Letter describe in detail the various tax services that Deloitte Tax anticipates performing for the Debtors and the applicable hourly rates. Deloitte Taxs rates may be adjusted to reflect additional complexity or issues associated with items specified herein or for other reasons. 12. Such tax compliance and other tax services will be valuable to the Debtors in its
efforts to reorganize. Deloitte Tax has indicated a willingness to provide such services as are described in this Addendum to the scope of services in the Engagement Letter (or in such subsequent engagement letters as may be entered into by the Debtors and Deloitte Tax). The Debtors and Deloitte Tax believe that this expanded scope of services to have been reasonably subsumed within the scope of the Debtors original Application for Authority to Retain and Employ Deloitte Tax LLP as Tax Service Providers and Tax Consultants to the Debtors Nunc Pro Tunc to September 1, 2005, which was granted by the Court in an Order entered on November 10, 2005. However, in an excess of caution and in the interests of clear and comprehensive disclosure, the Debtors are filing this Supplemental Application with the detailed description of the services to be provided with respect to the co-sourcing and tax return preparation services. The tax services for which Deloitte Tax was originally retained include, without limitation, assistance with Federal tax effects of bankruptcy filing, general corporate tax advisory assistance, IRS examination services, assistance with state tax post-bankruptcy emergence planning, contingent fee strategic property tax review services, international assignment services advisory assistance, and other related or similar tax services.
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A. 13.
Deloitte Taxs Qualifications and Disinterestedness Deloitte Tax has significant qualifications and experience in performing the scope of
work described herein or in the exhibits hereto. The firms experience in tax matters is widely recognized, and it regularly provides such services to large and complex business entities. Deloitte Tax has extensive experience in delivering tax consulting services in chapter 11 cases. The
Supplemental Statement incorporates Deloitte Tax prior disclosure in the Verified Statement of Scott Shekell dated September 30, 2005 and its supporting schedule(s) concerning it or its affiliates connections with the Debtors or parties-in-interest in these chapter 11 cases. 14. To the best of Deloitte Taxs knowledge, information and belief, expect as disclosed
in the Supplemental Statement Deloitte Tax: (a) does not have any connection with the Debtors, their affiliates, this Court, the United States Trustee, or to the Debtors attorneys, except as set forth in the Supplemental Statement and any attachments thereto; and (b) does not represent or hold any interest adverse to the Debtors or to their estates with respect to the matters for which it is to be employed. B. 15. Services to be Rendered As noted above, Deloitte Tax has indicated a willingness to provide the tax co-
sourcing and tax return preparation services that are described in the Addendum to the Engagement Letter to the Debtors or in the Supplemental Statement. This includes a number of federal income tax forms for specified Debtors or their affiliates. 16. Deloitte Tax, at the request of the Debtors and as may be agreed to by Deloitte Tax,
also may render such additional related tax services related to the foregoing services as deemed appropriate and necessary to benefit the Debtors estates or pursuant to any subsequent engagement letters as may be entered into between the Debtors and Deloitte Tax consistent with the scope of services as is described in the Addendum or in the Supplemental Statement. The Debtors believe
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that Deloitte Taxs tax consulting, tax return preparation and tax compliance services will not duplicate the services that, subject to this Court entering or having entered appropriate orders, other professionals may provide to the Debtors in these cases. C. 17. Proposed Compensation The Debtors understand that Deloitte Tax intends to apply to the Court for
allowances of compensation and reimbursement of expenses for all of its tax services in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, orders of this Court and guidelines established by the United States Trustee. The applicable hourly rates charged by Deloitte Tax personnel for this engagement are as follows: fees will be billed at an hourly rate of $175 per hour based on time incurred consistent with the terms and conditions of the Engagement Letter as specified at the Addendum at its Exhibit H. The Engagement Letter provides that hourly rates and any applicable hourly rates as may be agreed to by the Debtors and Deloitte Tax are subject to periodic adjustments to reflect economic and other conditions. Basis for Relief 18. Section 327 of the Bankruptcy Code governs a debtors employment of professional
persons to represent the debtor in possession in carrying out its duties under the Bankruptcy Code. See 11 U.S.C. 327(a). 19. The Debtors seek approval of the Addendum to the Engagement Letter pursuant to
section 328(a) of the Bankruptcy Code, which provides, in relevant part, that the Debtors with the courts approval, may employ or authorize the employment of a professional person under section 327 . . . on any reasonable terms and conditions of employment. . . . 11 U.S.C. 328(a).
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20.
Section 328 permits the compensation of professionals on flexible terms that reflect
the nature of their services and market conditions. As the United States Court of Appeals for the Fifth Circuit recognized in In re National Gypsum Co.: Prior to 1978, the most able professionals were often unwilling to work for bankruptcy estates where their compensation would be subject to the uncertainties of what a judge thought the work was worth after it had been done. The uncertainty continues under the present 330 of the Bankruptcy Code, which provides that the court award to professional consultants reasonable compensation based on relevant factors of time and comparable costs, etc. Under present 328 the professionals may avoid that uncertainty by obtaining court approval of compensation agreed to with the trustee (or debtor or committee). 123 F.3d 861, 862 (5th Cir. 1997) (citations omitted). 21. Notwithstanding approval of their engagement under section 328 of the Bankruptcy
Code, Deloitte Tax intends to apply to the Court for allowance of compensation and reimbursement of expenses pursuant to the procedures described in paragraph 17 herein and otherwise in accordance with the procedures set forth in the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and any applicable orders of the Court. 22. Deloitte Tax has significant experience provide tax co-sourcing services and
preparing tax returns. The Debtors believe that Deloitte Tax is well-qualified and able to provide the services to the Debtors in a cost-effective, efficient and timely manner. Deloitte Tax has indicated a willingness to act on behalf of the Debtors with respect to the services and to subject themselves to the jurisdiction and supervision of the Court. 23. The Addendum appropriately reflects the nature and scope of the services and the
Deloitte Taxs substantial experience with respect to the services. Accordingly, the Debtors are requesting that the Court allow the Debtors to expand the scope of their retention of Deloitte Tax.
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Notice 24. Notice of this Motion has been given to the Core Group as required by the Case
Management Procedures. In light of the nature of the relief requested, the Debtors submit that no further notice is required. No Prior Request 25. court. No prior application for the relief requested herein has been made to this or any other
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WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit A: (a) authorizing the Debtors to expand the scope of their retention of Deloitte Tax to provide tax co-sourcing and 2005 tax return preparation services to the Debtors as tax service providers and tax consultants in their chapter 11 cases, pursuant to sections 327(a) and 328 of the Bankruptcy Code, Bankruptcy Rules 2014, 2016 and 5002 and Local Rule 2014-1 pursuant to this Supplemental Application nunc pro tunc to May 16, 2006; and (b) granting such other and further relief as the Court may deem proper. Dated: June 30, 2006 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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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
SUPPLEMENTAL ORDER AUTHORIZING THE DEBTORS TO EXPAND THE SCOPE OF THEIR RETENTION OF DELOITTE TAX LLP NUNC PRO TUNC TO MAY 16, 2006 Upon the supplemental application (the Supplemental Application)2 of the above-captioned debtors (collectively, the Debtors) for entry of an order authorizing the Debtors to expand the scope of their retention of Deloitte Tax LLP (Deloitte Tax) nunc pro tunc to May 16, 2006, it appearing that the relief requested is in the best interest of the Debtors
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. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Supplemental Application and the Supplemental Statement.
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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 this Supplemental Application in this District is proper pursuant to 28 U.S.C. 1408 and 1409; notice of this Supplemental Application and the opportunity for a hearing on this Supplemental Application was appropriate under the particular circumstances and that no other or further notice need by given; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED 1. 2. The Supplemental Application is granted in its entirety. The Debtors are authorized to further retain and employ Deloitte Tax as tax
service providers and tax consultants for the Debtors in their chapter 11 cases, pursuant to sections 327(a) and 328 of the Bankruptcy Code, Bankruptcy Rules 2014, 2016 and 5002, Local Rule 2014-1 and the terms set forth in the Supplemental Application (including the Engagement Letter attached thereto and its Addendum at Scope of Tax Services Exhibit H), and consistent with the Supplemental Statement nunc pro tunc to May 16, 2006. 3. Deloitte Tax shall be compensated for such services and reimbursed for any
related expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules and any other applicable orders of this Court. All fees requested by Deloitte Tax will be subject to the review and approval of the Bankruptcy Court pursuant to the applicable provisions of the Bankruptcy Code. The provisions of this Courts Order Authorizing the Debtors to Retain and Employ Deloitte Tax LLP as Tax Service Providers and Tax Consultants to the Debtors Nunc Pro Tunc to September 1, 2005 at paragraphs 5-10 shall also apply to this Supplemental Application.
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4.
The Debtors are authorized to take all actions necessary to effectuate the relief
granted pursuant to this Order in accordance with the Motion. 5. The terms and conditions of this Order shall be immediately effective and
enforceable upon its entry. 6. The Court retains jurisdiction with respect to all matters arising from or related to
the implementation of this Order.
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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
NOTICE AND OPPORTUNITY TO RESPOND TO DEBTORS SUPPLEMENTAL APPLICATION AUTHORIZING THE DEBTORS TO EXPAND THE SCOPE OF THEIR RETENTION OF DELOITTE TAX LLP NUNC PRO TUNC TO MAY 16, 2006 PLEASE TAKE NOTICE THAT the above-captioned debtors (collectively, the Debtors) have filed their Supplemental Application Authorizing the Debtors to Expand the Scope of Their Retention of Deloitte Tax LLP Nunc Pro Tunc to May 16, 2006 (the Supplemental Application).
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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PLEASE TAKE FURTHER NOTICE THAT your rights may be affected. You may wish to review the Supplemental Application and discuss it with your attorney, if you have one in these cases. (If you do not have any attorney, you may wish to consult one.) PLEASE TAKE FURTHER NOTICE THAT in accordance with the First Amended Notice, Case Management and Administrative Procedures filed on June 9, 2005 [Docket No. 294] (the Case Management Procedures), if you wish to object to the Court granting the relief sought in the Supplemental Application, or if you want the Court to otherwise consider your views on the Supplemental Application, no later than July 10, 2006 at 4:00 p.m. prevailing Eastern Time, or such shorter time as the Court may hereafter order and of which you may receive subsequent notice, you or your attorney must file with the Court a written response, explaining your position at:2 United States Bankruptcy Court 211 West Fort Street, Suite 2100 Detroit, Michigan 48226 PLEASE TAKE FURTHER NOTICE THAT if you mail your response to the Court for filing, you must mail it early enough so the court will receive it on or before the date above. PLEASE TAKE FURTHER NOTICE THAT you must also serve the documents so that they are received on or before July 10, 2006 at 4:00 p.m. prevailing Eastern Time, in accordance with the Case Management Procedures, including to:
Response or answer must comply with Rule 8(b), (c) and (e) of the Federal Rules of Civil Procedure.
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Kirkland & Ellis LLP Attn: Richard M. Cieri Citigroup Center 153 East 53rd Street New York, New York 10022 Facsimile: (212) 446-4900 E-mail: rcieri@kirkland.com -andKirkland & Ellis LLP Attn: David L. Eaton Ray C. Schrock Marc J. Carmel 200 East Randolph Drive Chicago, Illinois 60601 Facsimile: (312) 861-2200 E-mail: deaton@kirkland.com rschrock@kirkland.com mcarmel@kirkland.com -andCarson Fischer, P.L.C. Attn: Joseph M. Fischer 4111 West Andover Road West - Second Floor Bloomfield Hills, Michigan 48302 Facsimile: (248) 644-1832 E-mail: jfischer@carsonfischer.com PLEASE TAKE FURTHER NOTICE THAT if no responses to the Supplemental Application are timely filed and served, the Court may grant the
Supplemental Application and enter the order without a hearing as set forth in Rules 2014-1(b) and 9014-1 of the Local Rules for the United States Bankruptcy Court for the Eastern District of Michigan.
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Dated: June 30, 2006
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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CERTIFICATE OF SERVICE I, Ray C. Schrock, an attorney, certify that on the 30th day of June, 2006, I caused to be served, by e-mail, facsimile and by overnight delivery, in the manner and to the parties set forth on the attached service lists, a true and correct copy of the foregoing Debtors Supplemental Application Authorizing the Debtors to Expand the Scope of Their Retention of Deloitte Tax LLP Nunc Pro Tunc to May 16, 2006. Dated: June 30, 2006 /s/ Ray C. Schrock Ray C. Schrock
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Served via Electronic Mail
CREDITOR NAME A Freeman Adrian City Hall Alice B Eaton Athens City Tax Collector Brendan G Best Bryan Clay Champaign County Collector Chris Kocinski City Of Eunice City Of Evart City Of Kitchener Finance Dept City Of Lowell City Of Marshall 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 DaimlerChrysler DaimlerChrysler Daniella Saltz Danielle Kemp David H Freedman David Heller David Youngman DuPont Earle I Erman Erin M Casey Frank Gorman Gail Perry Ge Capital GE Polymerland George E Schulman Hal Novikoff Heather Sullivan James A Plemmons Jim Clough Joe LaFleur Joe Saad John A Harris John Green John J Dawson John S Sawyer Josef Athanas Joseph Delehant Esq Joseph M Fischer Esq K Crumbo K Schultz Kim Stagg Kimberly Davis Rodriguez Leigh Walzer Levine Fricke Inc M Crosby Macomb Intermediate School Marc J Carmel Mark Fischer Michael R Paslay Michael Stamer Michigan Department Of Mike O'Rourke
CREDITOR NOTICE NAME John Fabor Mike Keith
Barb Neal The Mayor at City Hall Roger Elkins City Manager Pauline Houston Lowell Regional Wastewater Maurice S Evans City Manager Derrick Smith Treasurer's Office City Treasurer Kurt A Dawson City Assesor Treasurer Business License Div Pretreatment Division Tracy Horvarter
Bruce Tobiansky
Val Venable
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In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)
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(no valid e-mail) CREDITOR NAME Acord Inc American General Finance Bayer Material Sciences BNY Midwest Trust Company BNY Midwest Trust Company Brown Corporation City Of Albemarle City Of Battle Creek City Of Longview City Of Sterling Heights City Of Stockton Colbond Inc Dayton Bag & Burlap Co Dow Chemical Co Enerflex Solutions LLC Exxon Chemicals Intertex World Resources Trintex Corp Kentucky Revenue Cabinet Lake Erie Products Meridian Magnesium Office of Finance of Los Angeles Orlando Corporation Pension Benefit Guaranty Corporation Pine River Plastics Inc Progressive Moulded Products Revenue Canada Riverfront Plastic Products Inc Select Industries Corp South Carolina Dept Of Revenue Southco Standard Federal Bank State Of Michigan Teknor Financial Corporation TG North America Town Of Lincoln Finance Office Unique Fabricating Inc Valiant Tool & Mold Inc Vari Form Inc Vericorr Packaging fka CorrFlex Packaging CREDITOR NOTICE NAME John Livingston Linda Vesci Mary Callahan Roxane Ellwalleger Mark Ferderber Utilities Department Income Tax Division Water Utilities James P Bulhinger City Treasurer Economic Development Don Brown Jeff Rutter David Brasseur Todd McCallum Law Dept Bill Weeks Lilia Roman Bankruptcy Auditor Sara Eagle & Gail Perry Barb Krzywiecki Dan Thiffault George Tabry Christine Brown Sales & Use Tax Division Lorraine Zinar Holly Matthews Linda King Bruce B Galletly Raymond Soucie Tom Tekieke General Fax Terry Nardone Adriana Avila FAX 248-852-6074 217-356-5469 412-777-4736 312-827-8542 312-827-8542 616-527-3385 704-984-9445 269-966-3629 903-237-1004 586-276-4077 209-937-5099 828-665-5005 937-258-0029 989-638-9852 248-430-0134 281-588-4606 770-258-3901 502-564-3875 630-595-0336 517-663-2714 213-368-7076 905-677-1851 202-326-4112 810-329-9388 905-760-3371 902-432-6287 734-281-4483 937-233-7640 803-898-5147 610-361-6082 248-816-4376 517-241-8077 401-725-5160 248-280-2110 401-333-3648 248-853-8422 519-944-7748 586-755-8988 586-939-4216
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EXHIBIT B
IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS & AIKMAN CORPORATION, et al. Debtors.
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) ) ) ) ) ) ) )
Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes
DISCLOSURE OF COMPENSATION AND SUPPLEMENTAL VERIFIED STATEMENT OF SCOTT L. SHEKELL Scott L. Shekell states as follows: 1. I am a partner of Deloitte Tax LLP (Deloitte Tax), an office of which is located at I make this
600 Renaissance Center, Suite 900, Detroit, Michigan 48243-1895.
Supplemental Verified Statement (the Supplemental Statement): (a) in support of the Debtors supplemental application (the Supplemental Application) filed herewith for retention and employment of Deloitte Tax as tax service providers and tax consultants for the above-captioned debtors and debtors in possession (collectively, the Debtors) Nunc Pro Tunc to May 16, 2006; and (b) in accordance with sections 327 and 328 of title 11 of the
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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. 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.
Error! Unknown document property name.
United States Code, 11 U.S.C. 101-1330 (the Bankruptcy Code) and Rule 2014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). 2. Consistent with the scope of services as described herein and the terms and
conditions of the engagement letter (including its General Business Terms, addenda, and exhibits, the Engagement Letter) dated as of September 1, 2005, between Deloitte Tax and Collins & Aikman Corporation, a copy of which is attached to the Application as Exhibit C and incorporated herein by reference (and any subsequent engagement letter as may be entered into between the Debtor and Deloitte Tax), Deloitte Tax is willing to serve as tax service providers and tax consultants for the Debtors in their chapter 11 cases and to accept compensation for professional services rendered and reimbursement of expenses incurred in accordance with the provisions of sections 328, 330, and 331 of the Bankruptcy Code, the applicable Bankruptcy Rules, and the General Orders in effect in this District. The Debtors now have requested Deloitte Tax to expand the services for which it was retained pursuant to the Courts Order entered November 1, 2005 to include 2005 federal income tax preparation and co-sourcing tax services (the Supplemental Tax Return Services) specifically as described at the Addendum scope of Services Exhibit H of the Engagement Letter. As noted above, a copy of the Engagement Letter with the Addendum is attached to the Supplemental Application as Exhibit C and is also incorporated by reference herein. 3. Deloitte Tax intends to charge for its Supplemental Tax Return Services in
accordance with its usual and customary billing practices. For hourly rate additional work that is requested by the Debtors and as may be agreed to by Deloitte Tax, Deloitte will charge consistent with its customary hourly rates or the terms and conditions of the applicable Engagement Letter(s). Specifically, Deloitte Taxs applicable hourly rates for its professionals for the Supplemental Tax Return Services will be $175 per hour based on the
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time incurred consistent with the terms and conditions of the Engagement Letter as specified in the Addendum. 4. To the best of my knowledge after reasonable inquiry, Deloitte Tax, insofar as I have
been able to ascertain, has no connection with the above-captioned Debtors, their major creditors, other significant parties-in-interest (as identified to us) or to the Debtors attorneys, except as disclosed or otherwise described herein or in my prior Verified Statement dated September 30, 2005 or the attachment(s) thereto (together, the Verified Statement). Accordingly, in so far as I am aware, Deloitte Tax does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which it is to be employed. 5. As noted above, Deloitte Tax provides, among other services, tax compliance
services for the Debtors on an hourly fee basis. These services consist of assisting the Debtors in the preparation of federal tax returns, among other things. A portion of the tax compliance services will be performed, at Deloitte Taxs direction, by its indirect whollyowned subsidiary, Deloitte Tax Services India Private Limited (Deloitte Tax India). A specifically assigned team of personnel from Deloitte Tax India will assist in the preparation of tax returns under the supervision, and with the input, of personnel of Deloitte Tax. The time of the personnel of Deloitte Tax India will be included in the fee applications filed by Deloitte Tax. The hourly rates charged to clients by Deloitte Tax for services performed by Deloitte Tax India personnel are comparable to the market rates charges for similar services by Deloitte Tax, but do not directly correlate with the hourly rates attributed to such services by Deloitte Tax India. The connections of Deloitte Tax India (along with the connections of Deloitte Tax and its other affiliates) to the parties in interest searched by Deloitte Tax are set forth in Deloitte Tax prior disclosure or in the supplemental disclosure contained herein.
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Additional parties-in-interest for whom Deloitte Tax or its affiliates have provided, currently provide, or may in the future provide services in matters unrelated to this Chapter 11 case are: HENKEL, Honda or affiliates, HSBC or affiliates, IBM or affiliates, and Toyota Motor Company or affiliates. 6. No promises have been received by Deloitte Tax, as to compensation or
reimbursement of expenses in connection with the Debtors' chapter 11 cases. Except with an affiliated entity or as is otherwise described in the Verified Statement, Deloitte Tax has no agreement with any entity to share with such entity any compensation received, nor will any be made, except as permitted under section 504(b)(1) of the Bankruptcy Code. 7. Deloitte Tax intends to apply to the Court for payment of compensation and
reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, and the Local Bankruptcy Rules of this Court and pursuant to any additional procedures that may be established by the Court in these cases. 8. Deloitte Tax and the professionals it employs are qualified to provide services to the
Debtors in the matters for which Deloitte Tax is proposed to be employed.
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I declare under penalty of perjury that the foregoing is true and correct. Executed on this 30th day of June, 2006.
/s/ Scott L. Shekell Scott L. Shekell
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EXHIBIT C
September 1, 2005 Ms. Jennifer W. Heckman Director, International Tax Collins & Aikman Corporation Global Headquarters 250 Stephenson Hwy. Troy, MI 48083
Dear Ms. Heckman: Thank you for engaging Deloitte Tax LLP (Deloitte Tax) to assist Collins & Aikman Corporation (C&A) and its affiliates (collectively, C&A or Client) with certain tax services as more fully described below in the Scope of Tax Services section, and in the Scope of Tax Services Exhibits attached hereto and incorporated herein (the Exhibits). On May 17, 2005, C&A filed in the United States Bankruptcy Court for the Eastern District of Michigan (the Bankruptcy Court) a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. As a result, C&A is now operating as Debtor-in-Possession in In re: Collins & Aikman Corporation et al. (Case No. 05-55927) (the Case). C&A has requested that Deloitte Tax perform the tax services set forth herein under the Scope of Tax Services and as is set forth in the Exhibits and Deloitte Tax has agreed to perform such services, subject to the terms and conditions of this engagement letter. This engagement letter, and Deloitte Taxs obligations and responsibilities relating to this engagement, shall be effective as of September 1, 2005 (the date of filing of the retention application for this proposed engagement), subject to obtaining Bankruptcy Court approval in the Case; provided, however, that, in addition to Deloitte Taxs other rights or remedies, Deloitte Tax may, in its sole discretion and without any liability arising therefrom, terminate this engagement in the event that (a) a third party objects or threatens to object, or Deloitte Tax reasonably believes that a third party may object, in the form of an objection or otherwise, to Deloitte Taxs retention by C&A in the Case on the terms and conditions set forth in this engagement letter, or (b) a final order authorizing the employment of Deloitte Tax as tax service providers and tax consultants for C&A is not issued by the Bankruptcy Court in the Case on or before sixty (60) days from the date hereof on the terms and conditions set forth herein or on such other terms and conditions as are satisfactory to Deloitte Tax, or (c) the application of C&A seeking such order is denied by the Bankruptcy Court in the Case. In such event, C&A hereby agrees to withdraw or amend, promptly upon Deloitte Taxs request, any application filed or to be filed with the Bankruptcy Court to retain Deloitte Taxs services in the Case. Scope of Tax Services Deloitte Tax has agreed to perform the services as described in the attached Exhibits. Such Exhibits represent tax services that will be subjected to Bankruptcy Court approval and will be authorized by C&A management as of the effective date as indicated thereon.
From time to time additional Deloitte Tax services may be requested by C&A, at which point, and to the extent agreed to by Deloitte Tax, an additional Exhibit setting forth the scope of such services and the effective date of the performance thereof shall be annexed to this engagement letter. All such Exhibits shall be executed by authorized representatives of C&A and Deloitte Tax and shall become a part of this engagement letter. In the event of any inconsistency in the terms set forth in this engagement letter and the terms of any Exhibits hereto, the terms of this engagement letter shall control. Fee Arrangement Unless other compensation arrangements are set forth in the applicable Exhibit, we will bill you for work performed based on actual hours incurred in performing such work at the following standard hourly rates for the engagement, by level, as documented in the Addendum for each type of service to be provided. The range of billing rates reflects, among other things, differences in experience levels within classifications, geographic differentials and differences between types of services being provided by such personnel. The rates above will remain effective for a period of one year. Future rate increases are subject to approval by C&A. The professional fees charged for Deloitte Taxs services are calculated either 1) from the actual hours expended in providing the services multiplied by the hourly billing rates for specific personnel involved or 2) as a percentage of the tax savings generated from the project, if applicable. In addition, reasonable expenses, including travel, report production, delivery services, and other expenses incurred in providing the services, will be included in the total billed. Invoices will be sent monthly and payment on such invoices is due consistent with and as allowed per any applicable order of the Bankruptcy Court in connection with the Case. This engagement letter, together with the General Business Terms attached hereto, constitute the entire agreement between C&A and Deloitte Tax with respect to this engagement, and may not be amended except by the mutual written agreement of C&A and Deloitte Tax. All other oral and written representations, understandings or agreements relating to this engagement are superseded. Please indicate your acceptance of this agreement by signing in the space provided below and returning a copy of this engagement letter to us. Once again, thank you for giving us the opportunity to discuss our services with you. If you have any questions, please do not hesitate to call me at (313) 396-3297. Very truly yours, Deloitte Tax LLP AGREED AND ACCEPTED: Collins & Aikman, Inc.
By:___________________________ Scott L. Shekell Tax Partner Date: _________________________ Attachments Enclosure
By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________
DELOITTE TAX LLP GENERAL BUSINESS TERMS

A. Services. It is understood and agreed that Deloitte Tax LLPs (Deloitte Tax) services (the Services) under the engagement letter to which these terms are attached (the Engagement Letter) may include advice and recommendations, but all decisions in connection with the implementation of such advice and recommendations shall be the responsibility of, and made by, the Client. For purposes of these terms and the Engagement Letter, the Client shall mean Collins & Aikman Inc. and its subsidiaries and/or affiliates. Collins & Aikman Inc. represents and warrants that it has the power and authority to execute this agreement on behalf of, and to bind, itself and its subsidiaries and/or its affiliates. B. Payment of Invoices. Deloitte Taxs invoices are due within thirty (30) days of the invoice date. Without limiting its rights or remedies, Deloitte Tax shall have the right to halt or terminate the Services entirely if payment is not received within (30) days of the invoice date. The Client shall be responsible for all taxes imposed on the Services or on the transaction, other than Deloitte Taxs income taxes imposed on a net basis or by employment withholding, and other than taxes imposed on Deloitte Taxs property. C. Term. Unless terminated sooner in accordance with its terms, this engagement shall terminate on the completion of the Services. This engagement may be terminated by either party at any time, with or without cause, by giving written notice to the other party not less than thirty (30) days before the effective date of termination, provided that, in the event of a termination for cause, the breaching party shall have the right to cure the breach within the notice period. Deloitte Tax may terminate this engagement upon written notice to the Client if Deloitte Tax determines that (a) a governmental, regulatory, or professional entity (including, without limitation, the American Institute of Certified Public Accountants (AICPA), the Public Company Accounting Oversight Board (PCAOB), or the Securities and Exchange Commission), or an entity having the force of law has introduced a new, or modified an existing, law, rule, regulation, interpretation, or decision, the result of which would render Deloitte Taxs performance of any part of the engagement illegal or otherwise unlawful or in conflict with independence or professional rules, or (b) circumstances change (including, without limitation, changes in ownership of the Client or any of its affiliates) such that Deloitte Taxs performance of any part of the engagement would be illegal or otherwise unlawful or in conflict with independence or professional rules. Upon termination of the engagement, the Client will compensate Deloitte Tax under the terms of the Engagement Letter for the Services performed and expenses incurred through the effective date of termination. D. Ownership of Deloitte Tax Property. To the extent that Deloitte Tax utilizes any of its property (whether tangible or intangible) in connection with this engagement, such property shall remain the property of Deloitte Tax, and the Client shall not acquire any right or interest in such property. Deloitte Tax shall have ownership (including, without limitation, copyright ownership) and all rights to use and disclose its ideas, concepts, know-how, methods, techniques, processes and skills, and adaptations thereof in conducting its business, and the Client shall not assert or cause to be asserted against Deloitte Tax or its personnel any prohibition or restraint from so doing. E. Limitation on Warranties. THIS IS A SERVICES ENGAGEMENT. DELOITTE TAX WARRANTS THAT IT SHALL PERFORM THE SERVICES IN GOOD FAITH AND WITH DUE PROFESSIONAL CARE. DELOITTE TAX DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE CLIENTS EXCLUSIVE REMEDY FOR ANY BREACH OF THIS WARRANTY SHALL BE FOR DELOITTE TAX, UPON RECEIPT OF WRITTEN NOTICE, TO USE DILIGENT EFFORTS TO CURE SUCH BREACH, OR, FAILING ANY CURE IN A REASONABLE PERIOD OF TIME, THE RETURN OF PROFESSIONAL FEES PAID TO DELOITTE TAX HEREUNDER WITH RESPECT TO THE SERVICES GIVING RISE TO SUCH BREACH. F. Client Responsibilities, Acknowledgements and Agreements. The Client shall cooperate with Deloitte Tax in the performance by Deloitte Tax of the Services, including, without limitation, providing Deloitte Tax with reasonable facilities and timely access to data, information and personnel of the Client. The Client shall
be responsible for the performance of its personnel and agents and for the accuracy and completeness of all data and information provided to Deloitte Tax for purposes of the performance by Deloitte Tax of the Services. The Client acknowledges and agrees that Deloitte Taxs performance is dependent upon the timely and effective satisfaction of the Clients responsibilities hereunder and timely decisions and approvals of the Client in connection with the Services. Deloitte Tax shall be entitled to rely on all decisions and approvals of the Client. The Client shall be solely responsible for, among other things: (a) making all management decisions and performing all management functions; (b) designating a competent management member to oversee the Services; (c) evaluating the adequacy and results of the Services; (d) accepting responsibility for the results of the Services; and (e) establishing and maintaining internal controls, including, without limitation, monitoring ongoing activities. In addition, Client specifically acknowledges and agrees to the following: Any assistance provided or comments made by Deloitte Tax relating to Statement of Financial Accounting Standards No. 109 will not constitute an agreement to provide audit, compilation, review, or attest services in accordance with standards or rules established by the AICPA, the PCAOB, or other regulatory body, and, therefore, we will not express an opinion or any other form of assurance with respect to the results of these services (including, without limitation, the tax provision, deferred taxes, valuation allowances and any related disclosures). The Client will solely be responsible for providing accurate and complete information requested by Deloitte Tax. Deloitte Tax has no responsibility for the accuracy or completeness of the information provided by or on behalf of the Client. G. Limitation on Damages. The Client agrees that Deloitte Tax, its subcontractors and their respective personnel shall not be liable to Client for any claims, liabilities, or expenses relating to this engagement (Claims) for an aggregate amount in excess of the fees paid by the Client to Deloitte Tax pursuant to this engagement, except to the extent finally judicially determined to have resulted primarily from the bad faith or intentional misconduct of Deloitte Tax or its subcontractors. In no event shall Deloitte Tax, its subcontractors or their respective personnel be liable for any loss of use, data, goodwill, revenues or profits (whether or not deemed to constitute direct Claims) or any consequential, special, indirect, incidental, punitive or exemplary loss, damage, or expense relating to this engagement. In circumstances where all or any portion of the provisions of this paragraph are finally judicially determined to be unavailable, the aggregate liability of Deloitte Tax, its subcontractors and their respective personnel for any Claim shall not exceed an amount which is proportional to the relative fault that their conduct bears to all other conduct giving rise to such Claim. H. Indemnification. The Client shall indemnify and hold harmless Deloitte Tax, its subcontractors and their respective personnel from all Claims, except to the extent finally judicially determined to have resulted primarily from the bad faith or intentional misconduct of Deloitte Tax or its subcontractors. In circumstances where all or any portion of the provisions of this paragraph are finally judicially determined to be unavailable, the aggregate liability of Deloitte Tax, its subcontractors and their respective personnel for any Claim shall not exceed an amount which is proportional to the relative fault that their conduct bears to all other conduct giving rise to such Claim. I. Force Majeure. Except for the payment of money, neither party shall be liable for any delays or nonperformance resulting from circumstances or causes beyond its reasonable control, including, without limitation, acts or omissions or the failure to cooperate by the other party (including, without limitation, entities or individuals under its control, or any of their respective officers, directors, employees, other personnel and agents), acts or omissions or the failure to cooperate by any third party, fire or other casualty, act of God, strike or labor dispute, war or other violence, or any law, order, or requirement of any governmental agency or authority. J. Limitation on Actions. No action, regardless of form, relating to this engagement, may be brought by either party more than one year after the cause of action has accrued, except that an action for nonpayment may be brought by a party not later than one year following the date of the last payment due to the party bringing such action. K. Independent Contractor. It is understood and agreed that each party hereto is an independent contractor and that neither party is, nor shall be considered to be, the others agent, distributor, partner, fiduciary, joint venturer, co-owner, or representative. Neither party shall act or represent itself, directly or by implication, in any such capacity or in any manner assume or create any obligation on behalf of, or in the name of, the other.
L. Confidentiality. To the extent that, in connection with this engagement, Deloitte Tax comes into possession of any trade secrets or other proprietary or confidential information of the Client, Deloitte Tax will not disclose such information to any third party without the Clients consent. The Client hereby consents to Deloitte Tax disclosing such information (a) to subcontractors, whether located within or outside of the United States, that are providing services in connection with this engagement and that have agreed to be bound by confidentiality obligations similar to those in this paragraph L; (b) as may be required by law, regulation, judicial or administrative process, or in accordance with applicable professional standards, or in connection with litigation pertaining hereto, or (c) to the extent such information (i) shall have otherwise become publicly available (including, without limitation, any information filed with any governmental agency and available to the public) other than as the result of a disclosure by Deloitte Tax in breach hereof, (ii) is disclosed by the Client to a third party without substantially the same restrictions as set forth herein, (iii) becomes available to Deloitte Tax on a nonconfidential basis from a source other than the Client which Deloitte Tax believes is not prohibited from disclosing such information to Deloitte Tax by obligation to the Client, (iv) is known by Deloitte Tax prior to its receipt from the Client without any obligation of confidentiality with respect thereto, or (v) is developed by Deloitte Tax independently of any disclosures made by the Client to Deloitte Tax of such information. In satisfying its obligations under this paragraph, Deloitte Tax shall maintain the Clients trade secrets and proprietary or confidential information in confidence using at least the same degree of care as it employs in maintaining in confidence its own trade secrets and proprietary or confidential information, but in no event less than a reasonable degree of care. M. Survival and Interpretation. The agreements and undertakings of the Client contained in the Engagement Letter, together with all paragraphs herein relating to payment of invoices, limitation on damages, waiver of jury trial, information and data, survival and interpretation, assignment, governing law, indemnification, limitations on actions and limitations on warranties shall survive the expiration or termination of this engagement. The Client acknowledges and agrees that no affiliated or related entity of Deloitte Tax, whether or not acting as a subcontractor, shall have any liability hereunder to the Client or any other person and the Client will not bring any action against any such affiliated or related entity of Deloitte Tax in connection with this engagement. Without limiting the foregoing, affiliated and related entities of Deloitte Tax are intended thirdparty beneficiaries of these terms. Any affiliated or related entity of Deloitte Tax may in its own right enforce such terms, agreements and undertakings. N. Assignment and Subcontracting. Except as provided below, neither party may assign, transfer or delegate any of its rights or obligations hereunder (including, without limitation, interests or Claims) without the prior written consent of the other party. The Client hereby consents to Deloitte Tax assigning or subcontracting any of Deloitte Taxs rights or obligations hereunder to (a) any affiliate or related entity, whether located within or outside of the United States, or (b) any entity which acquires all or a substantial part of the assets or business of Deloitte Tax. Services performed by Deloitte Tax subcontractors shall be invoiced as professional fees on the same basis as Services performed by Deloitte Tax personnel, unless otherwise agreed. O. Waiver of Jury Trial. DELOITTE TAX AND THE CLIENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATING TO THIS ENGAGEMENT.
Scope of Tax Services Exhibit A This Exhibit A is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax LLP. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. The following tax services have been approved by C&As management and agreed to by Deloitte Tax. Assistance with Federal Tax Effects of Bankruptcy Filing We will provide tax advisory services related to debt discharge and other reorganization issues arising in connection with the Case. Such services shall include, but not limited to, the following: (i) Assist C&A in its calculation of the tax asset and stock basis in order to assist C&As management in evaluating the income from the cancellation/discharge of indebtedness (COD income) and its effects under Internal Revenue Code (IRC or Code) Sections 108 and 1017 pertaining to tax attributes (tax basis in assets, tax basis in stock, and tax net operating loss carryovers). Such services will include a computation of cumulative earnings and profits of C&A (taking into account the effects of bankruptcy debt discharge income) in order to assist C&As management in developing its support regarding the tax effect of post-bankruptcy distributions to new equity holders;
(ii) Advise C&A in evaluating and modeling alternative tax methodologies in order to assist C&As management in understanding post-bankruptcy tax attributes (tax basis in assets and net operating loss carryovers) available under the applicable newly issued tax regulations and the absorption of such attributes based on C&As operating projections; including a technical analysis of the effects of Treasury Regulation (Treas. Reg.) Section 1.1502-28 and the interplay with IRC Section 108/1017; (iii) Advise C&A in evaluating and modeling the potential effect of the Alternative Minimum Tax in various post-emergence scenarios; (iv) Assist C&A in analyzing the effects of tax rules under Code Sections 382(l)(5) and (l)(6) pertaining to the post-bankruptcy net operating loss carryovers and limitations on their utilization; (v) Advise C&A in analyzing Net Built-in Gain or Loss position at date of bankruptcy in order to assist C&As management in understanding any limitations on use of tax losses generated from post-bankruptcy asset or stock sales; (vi) Assist C&A by working with creditors counsel, C&As counsel, and C&As financial advisors on cash tax effects of bankruptcy and in understanding the post-bankruptcy tax profile; (vii) Advise as to the proper tax treatment of post-petition interest; (viii) Advise as to the proper tax treatment of pre-petition and post-petition reorganization costs;
(ix) Assist C&A in its determination of the state tax consequences of the income from the discharge of indebtedness and any ownership changes, including their resulting impact on the amount and use of state net operating losses; (x) Advise C&A on the state tax aspects of the post-bankruptcy environment with a focus on optimizing the post-bankruptcy tax structure for state tax purposes. Strategies that are both general and specific will be developed and discussed with C&A management. These strategies will concentrate on the potential reduction of state income and franchise, sales and use, payroll and unemployment, property, excise and gross receipts taxes, and other state taxes; (xi) Assist C&A in evaluating and modeling the effects of liquidating, merging, or converting entities as part of the post-emergence plan, including the effects on federal and state tax attributes, state incentives, apportionment, and other tax planning; (xii) Assist C&A in reviewing the potential effects of the FAS 109 deferred tax and valuation allowances for potential tax basis in asset reductions as a result of the bankruptcy; the Client specifically acknowledges and agrees to the following: 1. Any comments made by Deloitte Tax relating to Statement of Financial Accounting Standards No. 109 will not constitute an engagement to provide audit, compilation, review or attest services in accordance with standards or rules established by the AICPA, the PCAOB, or other regulatory body, and, therefore, we will not express an opinion or any other form of assurance with respect to the results of these services (including, without limitation, the tax provision, deferred taxes, valuation allowances and any related disclosures). 2. The Client will be solely responsible for providing accurate and complete information requested by Deloitte Tax. Deloitte Tax has no responsibility for the accuracy or completeness of the information provided by or on behalf of the Client. (xiii) Assist C&A in the review and analysis of tax treatment of items adjusted for GAAP purposes as a result of fresh start accounting as required for the emergence date of the US GAAP balance sheet in an effort to identify the appropriate tax treatment of adjustments to equity (including issuance of new equity, options, and/or warrants); and other adjustments to assets and liabilities recorded; and (xiv) Document, as appropriate, our tax analysis, opinions, recommendation, observations, and correspondences for any proposed restructuring alternative tax issue or other tax matter described above. We will bill you for work performed based on actual hours incurred in performing such work at the following standard hourly rates for the engagement, by level: Local National Partner Senior Manager Manager Senior Associate $575 $475 $390 $290 $675 $550 $475 $375
The range of billing rates reflects, among other things, differences in experience levels within classifications, geographic differentials and differences between types of services being provided by such personnel. The rates above will remain effective for a period of one year. Future rate increases are subject to approval by C&A.
Effective as of September 1, 2005, agreed to and accepted by:
Deloitte Tax LLP
Collins & Aikman, Inc.
By:___________________________ Scott L. Shekell Tax Partner Date: _________________________
Scope of Tax Services Exhibit B
This Exhibit B is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. The following tax services have been approved by C&As management and agreed to by Deloitte Tax. General Corporate Tax Advisory Assistance We will provide general consultative assistance with day-to-day federal, state tax and local country questions, as requested by C&As internal tax department, and as may be agreed to by Deloitte Tax, in an effort to assist C&A with ordinary ongoing tax needs not able to be satisfied with its existing internal resources. Please note that the above services do not include rendering of tax opinions, review of required tax disclosures, review of sale agreements, or discussions with accounting advisors, legal counsel, or target buyers. We will bill you for work performed based on actual hours incurred in performing such work at the following standard hourly rates for the engagement, by level: Local Partner Senior Manager Manager Senior Associate Staff $540 $450 $360 $270 $200 National $675 $550 $475 $375
The range of billing rates reflects, among other things, differences in experience levels within classifications, geographic differentials and differences between types of services being provided by such personnel. The rates above will remain effective for a period of one year. Future rate increases are subject to approval by C&A. Effective as of September 1, 2005, agreed to and accepted by:
Deloitte Tax LLP
Scope of Tax Services Exhibit C This Exhibit C is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. The following tax services have been approved by C&As management and agreed to by Deloitte Tax. Tax Examination Services We will provide advisory services related to the challenge or potential challenge of C&As positions in tax and regulatory filings by the federal, state and local country authorities with responsibility over these filings. We will bill you for work performed based on actual hours incurred in performing such work at the following standard hourly rates for the engagement, by level: Local Partner Senior Manager Manager Senior Associate Staff $540 $450 $360 $270 $200 National $675 $550 $475 $375
The range of billing rates reflects, among other things, differences in experience levels within classifications, geographic differentials and differences between types of services being provided by such personnel. The rates above will remain effective for a period of one year. Future rate increases are subject to approval by C&A. Please note that the above services do not include rendering of tax opinions, review of required tax disclosures, review of sale agreements, or discussions with accounting advisors, legal counsel, or target buyers. Effective as of September 1, 2005, agreed to and accepted by:
Deloitte Tax LLP
Scope of Tax Services Exhibit D
This Exhibit D is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. The following tax services have been approved by C&As management and agreed to by Deloitte Tax. Assistance with State Tax Effects of Bankruptcy Filing We will assist C&A in its effort to identify tax issues and planning opportunities related to bankruptcy from a state and local perspective, including, but not limited to, advising C&A on state adoption of IRC Sec 108, state tax effects of IRS Code Section 346 (including maximizing net operating loss carryovers), and state positions with respect to state tax attribute utilization limitations post-bankruptcy (IRC Sec 382 limitations). We will research relevant state tax laws and apply them to C&As specific facts. Deloitte Tax will document its recommendations in a memorandum for use solely by C&As management. We will bill you for work performed based on actual hours incurred in performing such work at the following standard hourly rates for the engagement, by level:
Local Partner Senior Manager Manager Senior Associate $575 $475 $390 $290
National $675 $550 $475 $375
The range of billing rates reflects, among other things, differences in experience levels within classifications, geographic differentials and differences between types of services being provided by such personnel. The rates above will remain effective for a period of one year. Future rate increases are subject to approval by C&A.
Deloitte Tax LLP
Scope of Tax Services Exhibit E
This Exhibit E is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. The following tax services have been approved by C&As management and agreed to by Deloitte Tax. State Tax Post-bankruptcy Emergence Planning Deloitte Tax will assist C&A in its efforts to identify tax issues and state and local planning opportunities related to post-bankruptcy including, but not limited to, evaluating structural strategies to assist C&A in attempting to minimize state income taxes, property taxes, sales & use taxes, and other state and local taxes as appropriate. We expect to undertake the state tax post-bankruptcy review in two phases. In Phase I, we will assemble an engagement team of qualified and experienced tax professionals. This team, working together with C&A personnel, will review mutually selected tax information in order to consider the application of potential state tax planning strategies, which apply to C&A. The Phase 1 will review will address the post-bankruptcy environment with a focus on post-bankruptcy tax structure strategies, property tax planning and other state tax planning. This review will cover both general and specific tax strategies, and will concentrate on the potential reduction of state income and franchise, sales and use, payroll and unemployment, property, excise and gross receipts taxes, and other state taxes. At the end of Phase I we expect to identify potential strategies, quantify the expected tax savings or range of savings, and present recommendations to C&As management. We will then assist, upon the mutual agreement of the parties, C&As management as they prioritize and implement these strategies. During Phase II we expect to help C&A complete the analysis and documentation in an effort to support, were possible, the strategies selected by C&As management, and provide assistance in connection with the implementation thereof. We will work with C&As management to assist them in understanding implementation issues. We will help prepare technical support, related computational analyses, and other supporting documentation for use solely by C&As management in connection with their selected strategies. We will bill you for work performed based on actual hours incurred in performing such work at the following standard hourly rates for the engagement, by level:
Local Partner Senior Manager Manager Senior Associate $575 $475 $390 $290
National $675 $550 $475 $375
The range of billing rates reflects, among other things, differences in experience levels within classifications, geographic differentials and differences between types of services being provided by
such personnel. The rates above will remain effective for a period of one year. Future rate increases are subject to approval by C&A.
Deloitte Tax LLP
Scope of Tax Services Exhibit F
This Exhibit F is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. Deloitte Taxs property tax service consists of two (2) phases: a strategic property tax review phase and an implementation phase. Phase I Strategic Property Tax Review The strategic property tax review phase involves an initial review of C&As financial records and property tax filings, as well as a review of the taxing authorities work papers for both the current and previous years assessments. This strategic property tax review phase is intended to assist C&A in identifying both immediate tax refund opportunities and potential tax savings through C&As implementation of specific strategies, including the following, but not limited to: Reviewing the information provided by Client, and secured through research, including a review of tax authority records where appropriate, and developing a value position. A value position is the research and consideration of relevant property data, records, observations, operations, and market in the development of an estimated value for a particular property. Reviewing current C&A procedures in compliance to determine if alternative methodologies, including a review of C&As asset classifications and its quantification of its intangible assets and the impact that such classifications and quantifications may have on reducing C&As property tax liabilities. Reviewing C&As tax assessments assigned by assessing authorities to the Properties and evaluating such tax assessments in effort to determine whether any such assessments are excessive based on applicable valuation techniques, industry standards, and market conditions. Conduct a ghost asset study in an effort to confirm significant assets on C&As books, as appropriate. Reviewing the assets with C&A and determining whether there are physical, functional, and/or economic obsolescence issues associated with the assets. Assessing C&As classification of real versus personal property. Estimating the value of tangible assets, by vintage or by individual asset.. Assessing the overall value of C&As assets through the application of various methodologies including replacement cost new less depreciation approach and income approach to value. Reviewing the value position with Client to mutually develop a Target Value, as appropriate. Target Value means an agreed upon range of values developed for settlement purposes. A value position is the research and consideration of relevant property data, records, observations, operations, and market in the development of an estimated value for a particular property.
Submitting recommendations for positioning of property taxes based on the impact from potential future restructurings.
Fees for Phase I Services Strategic Property Tax Review Phase I services will be performed at no charge to C&A.
Phase II Implementation Phase Deloitte Tax is willing to invest significant time and expense in Phase I of the project. Our investment is made with the understanding that C&A will move forward at the agreed upon fee, providing our ideas and approach have merit and savings potential to C&A, and that there are no known barriers. If after the strategic property tax review, C&A decides to go forward with the tax saving strategies identified, C&A will engage Deloitte Tax for the following: (i) Deloitte Tax will prepare and present formal protests on behalf of C&A before relevant Appraisal Review Boards / Boards of Appeal. Appeal efforts may include, but are not limited to, filing written protests, assisting in the filing of any necessary amended returns, discussions and negotiations on behalf of C&A with assessment authorities after filing formal protests, and preparing for and attending informal hearings on behalf of C&A with assessment officials. Deloitte Tax will prepare valuation report(s) and develop positions supporting the reduced value. Advise C&A on the outcome of such actions as described above. Provide a summary of findings of the assessed values and estimated or actual ad valorem taxes on the Properties, including a summary of the results of Deloitte Taxs efforts. Fees for Phase II Services Implementation Phase For Phase II: In the event that that C&A engages Deloitte Tax to perform the services that are the subject of this Exhibit with respect to all of C&As real and personal property holdings for the 2004 and 2005 tax years as well as all other open tax years, C&A shall pay Deloitte Tax twenty five percent (25%) of the real and personal property tax savings received by C&A as result of the Deloitte Tax services performed pursuant to this Exhibit. In the event that that C&A engages Deloitte Tax to perform the services that are the subject of this Exhibit with respect to specific properties as identified by C&A (as opposed to all of C&As properties), then C&A shall pay Deloitte Tax thirty (30%) of the real and personal property tax savings resulting from Deloitte Tax services provided pursuant to this Exhibit and received by C&A on the specified property. In either case, tax savings fees are due and payable upon provision of proof of reduction. For purposes of this Exhibit, the services rendered and the resulting fees to Deloitte Tax, Tax savings shall be defined as the previous years final assessment, plus or minus the net change in plant and equipment balance, or the preliminary assessment, whichever is greater, less the current years final
(ii) (iii)
assessment, as negotiated by Deloitte Tax, times the applicable tax rate. To the extent that amended returns or refund claims are filed by Deloitte Tax, the tax savings resulting from the amended returns or refund claims are also subject to the contingent fee provisions as detailed above. Appeals will only be pursued for those properties as mutually agreed upon by C&A and Deloitte Tax. All third party engagement-related expenses such as filing fees, appraiser, and attorney fees, etc. will be the responsibility of C&A and will be billed in addition to the fees quoted above. Under AICPA and state accountancy rules and our own professional standards, we will charge a contingent based performance fee for our services wherever appropriate. We anticipate that refund claims and amended returns and certain ideas and strategies we recommend will qualify for a contingent fee structure. If during the course of this engagement Deloitte Tax identifies a strategy for which it is unable to charge a performance fee for personal property tax issues, we will bring that item to your attention and an hourly fee will be billed at 75% of Deloitte Taxs standard hourly rates for services approved by C&A. If litigation is required, Deloitte Tax will assist C&As legal counsel, as directed, for an additional negotiated fee and expenses. Please note that the above services do not include rendering of tax opinions, review of required tax disclosures, review of sale agreements, or discussions with accounting advisors, legal counsel, or target buyers. Effective as of September 1, 2005, agreed to and accepted by:
Deloitte Tax LLP
Scope of Tax Services Exhibit F(1)
It is agreed that Deloitte Tax shall represent C&A for real and personal property as listed below:
PROPERTY LISTING
To be Provided by C&A Will Include all Physical Locations
Scope of Tax Services Exhibit G
This Exhibit G is attached to and made a part of that certain engagement letter dated September 1, 2005 entered into between C&A and Deloitte Tax. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in such engagement letter. The following tax services have been approved by C&As management and agreed to by Deloitte Tax. SCOPE OF SERVICES International Assignment Tax Services U.S. Federal and State Income Tax Returns Deloitte Tax will prepare Federal and state income tax returns pertaining to all eligible employees of the C&As (hereinafter referred to as assignees). It is C&As responsibility to confirm to Deloitte tax the list of eligible assignees. Deloitte Tax will provide confirmed assignees with an electronic income tax organizer to assist them in accumulating the information necessary for Deloitte Tax to prepare the returns. Deloitte Tax is not responsible for the preparation of any non-income tax returns for the assignees, whether the legal responsibility of C&A or the employees, unless separately arranged with Deloitte Tax. Examples of non-covered returns include, but are not limited to, sales and use returns, valueadded returns, local property tax returns, payroll tax returns, foreign bank account filings, trust or gift tax returns, foreign trust reporting or information returns for employee benefit plans. Client Organizer Deloitte Tax will provide C&As assignees with a US Client Organizer (Organizer) by January 23, 2006 to those assignees for whom authorization for services is received by Deloitte Tax by January 9th. Other country organizers will be provided within 6 weeks of the tax year end. The completed US Organizer should be returned to Deloitte Tax no later than March 3, 2006, to allow Deloitte Tax to finalize the tax return(s) in a timely manner and minimize exposure to interest and/or penalties. Deloitte Tax will keep you informed of any circumstances that otherwise affect the scope of Deloitte Taxs work, the timetable or Deloitte Taxs level of participation. If Deloitte Tax encounters circumstances that cause Deloitte Taxs fees to exceed Deloitte Taxs estimate as set forth in the Application, Deloitte Tax will consult with C&A regarding the additional cost before proceeding with the tasks involved. As always, Deloitte Tax will make every effort to keep Deloitte Taxs fees and expenses as low as possible, commensurate with Deloitte Taxs responsibilities. Foreign Income Tax Returns Deloitte Tax-related entities will prepare home/host country income tax returns for eligible assignees. In addition, tax professionals in Deloitte Tax-related entities offices may meet with eligible assignees, where reasonable, to discuss local tax issues. The fees for those returns are included in the attached service matrix.
Exit and Entrance Tax Orientations Deloitte Tax will provide tax briefings to eligible assignees in their home country before they depart for their international assignments. The topics covered will include C&As international assignment policies, U.S. and foreign tax requirements and assignee-specific tax matters. Deloitte Tax-related entities will also provide a tax briefing in the host location for eligible assignees upon their arrival in the host country to discuss host country tax issues. Foreign Tax Payment and Refund Advice Deloitte Tax will review and analyze all foreign tax assessments and refunds to determine whether funds should be advanced by the Company or refunded to the Company. Tax Equalization Calculations Deloitte Tax will prepare tax equalization calculations for all eligible assignees, pursuant to C&As policy/policies, and will forward the results of these calculations to C&A in a manner that will protect the assignees confidential tax return information. Tax Audits and Notices Deloitte Tax will respond to any Federal, state or foreign tax notice on the assignees behalf for all years in which the assignee is/was eligible for Deloitte Tax services. Please note that to the extent extensive representation is required we will contact you in advance of providing that representation. To be cost effective, Tax Notices for unpaid taxes of less than $200 in most cases will not be examined or challenged, and a request for payment will be sent directly to you. Miscellaneous Compliance Services Deloitte Tax will provide services for miscellaneous compliance matters which may arise throughout the year, such as state estimated tax payments, amended returns, etc. in accordance with the fee schedule attached or with your approval.
General Advisory Services Deloitte Tax will provide general advisory tax consulting services to the C&A upon request. Such services usually consist of providing our assistance to C&As Human Resource, Finance, or International Tax professionals in developing the overall program and policies, as well as out-of-scope consultation regarding foreign tax compliance and planning, tax equalization and international assignment program or assignee issues. Services not described specifically in the fee schedules will be billed at our standard hourly rates for the tax specialists providing the services. Where appropriate, Deloitte Tax will provide a separate exhibit setting forth the appropriate scope of services along with the related fees.
Professional Fees Deloitte Tax anticipates that it will incur $75,000 in fees in connection with the preparation of the tax returns for C&A employees on international assignment based on a population of fifteen (15) employees. Additionally, Deloitte Tax anticipates $45,000 in fees in connection with the provision of various other tax services to the C&A in association with the prepared tax returns. Additional services will be provided only upon authorization by C&A. Tax Services Subject to any Bankruptcy Court orders, generally, Deloitte Tax anticipates billing on a monthly basis for consulting services performed under this engagement. Deloitte Taxs arrangement with you provides that Deloitte Tax sends progress bills for compliance services that we expect to deliver. On this basis, Deloitte Tax will issue progress bills as follows: February May 80% of budgeted annual compliance fee to be billed 20% of budgeted annual compliance fee to be billed
A final year-end compliance reconciliation bill will be provided to confirm both assignees served and services provided. Expenses and Coordination Travel expenses will be billed for the actual amount incurred except as agreed. Deloitte Tax expect to develop a mutually agreeable travel and expense approval process with C&A that will limit travel expenses to those ordinary and necessary under the circumstances. Effective as of September 1, 2005, agreed to and accepted by:
Deloitte Tax LLP

Nunc Pro Tunc: Hearing Date (If Necessary) : July 13, 2006 at 2:00 P.M Objection Deadline: July 10, 2006 at 4:00 P.M

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Nunc Pro Tunc: Hearing Date (If Necessary) : July 13, 2006 at 2:00 P.M Objection Deadline: July 10, 2006 at 4:00 P.M

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

the implementation of this Order.

Dated: June 30, 2006

Served via Electronic Mail

CREDITOR NOTICE NAME John Fabor Mike Keith

Served via Electronic Mail

CREDITOR NOTICE NAME

William Kinley President

Jim Cambio Of Ingersoll Joseph T. Deters

Served via Facsimile

Served via Overnight Mail

Ste 900 1007 N Market St

Director's Office for Taxpayer Services Division

co Highwoods Properties Llc co Highwoods Properties Llc co Rudolph libbe Properties

of the City of Montgomery

Served via Overnight Mail

CREDITOR NOTICE NAME

SBSE Insolvency Unit Tim Gorman Laura Kelly

co Beer Wells Real Estate Woody Ban

Canada Canada Canada Canada Canada

Farmville Downtown Partnership

Served via Overnight Mail

CITY Greensboro Warren

co Lincoln Harris Llc Hal Novikoff

600 Renaissance Center, Suite 900, Detroit, Michigan 48243-1895.

Error! Unknown document property name.

Debtors in the matters for which Deloitte Tax is proposed to be employed.

/s/ Scott L. Shekell Scott L. Shekell

By:___________________________ Scott L. Shekell Tax Partner Date: _________________________ Attachments Enclosure

By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________

DELOITTE TAX LLP GENERAL BUSINESS TERMS

Effective as of September 1, 2005, agreed to and accepted by:

Deloitte Tax LLP

Collins & Aikman, Inc.

By:___________________________ Scott L. Shekell Tax Partner Date: _________________________

By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________

Scope of Tax Services Exhibit B

Deloitte Tax LLP

Collins & Aikman, Inc.

By:___________________________ Scott L. Shekell Tax Partner Date: _________________________

By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________

Deloitte Tax LLP

Collins & Aikman, Inc.

By:___________________________ Scott L. Shekell Tax Partner Date: _________________________

By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________

Scope of Tax Services Exhibit D

National $675 $550 $475 $375

Effective as of September 1, 2005, agreed to and accepted by:

Deloitte Tax LLP

Collins & Aikman, Inc.

By:___________________________ Scott L. Shekell Tax Partner Date: _________________________

By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________

Scope of Tax Services Exhibit E

National $675 $550 $475 $375

Effective as of September 1, 2005, agreed to and accepted by:

Deloitte Tax LLP

Collins & Aikman, Inc.

By:___________________________ Scott L. Shekell Tax Partner Date: _________________________

By:___________________________ Jennifer W. Heckman Director, International Tax Date: _________________________

Scope of Tax Services Exhibit F

Deloitte Tax LLP

Collins & Aikman, Inc.

By:___ Scott L. Shekell Tax Partner Date: _ Attachments Enclosure

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _

By:___ Scott L. Shekell Tax Partner Date: _

By:___ Jennifer W. Heckman Director, International Tax Date: _