Collins & Aikman asks for court approval of equipment sales at facilities to be closed

By Reshmi Basu

New York, June 7 - Collins & Aikman Corp. asked for approval of procedures to sell equipment at facilities where the company is winding down operations, either immediately or in the future, according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of Michigan.

Collins & Aikman has agreed with major customers and its pre-bankruptcy bank lenders that it will close down some facilities where it has been unable to find a buyer.

According to the court document, Collins & Aikman is asking the court to allow it to sell assets at the facilities without further approval from the court or notice to its creditors.

The debtor noted that a lengthy approval process would "likely will chill the potential market for the assets and thereby reduce the value that the debtors would derive from the assets."

In addition, the continued maintenance of the facilities "is a cost to the debtors' estate."

As part of the proposed sale procedure, Collins & Aikman would file a final sale notice at least 10 days before the scheduled sale. The company would also serve a final sale notice by overnight delivery to relevant parties.

The objection deadline is scheduled for June 18. A hearing, if necessary, is scheduled for June 21.

As previously reported, Collins & Aikman Corp. asked the court to postpone its plan of reorganization confirmation hearing to July 12 from June 5 to seek approval of a settlement with General Electric Capital Corp. and an agreement on retiree benefits with the United Auto Workers.

The company said the hearing postponement would also allow it to finalize agreements related to the sale of its plastics business.

Collins & Aikman, a Troy, Mich.-based automotive company, filed for Chapter 11 on May 17, 2005. Its case number is 05-55927.

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