Collins & Aikman files complaint after GECC threatens to foreclose on non-debtor affiliate assets or stock

By Caroline Salls

Pittsburgh, May 31 - Collins & Aikman Corp. filed a complaint against General Electric Capital Corp. and GE Capital de Mexico, S de RL de CV in connection with GECC's recent threats that it plans to foreclose on the assets or stock of Collins & Aikman Automotive Hermosillo, SA de CV on June 2, according to a Wednesday filing with the U.S. Bankruptcy Court for the Eastern District of Michigan.

According to the complaint, while the threats are technically aimed at a Collins & Aikman non-debtor affiliate, "if the defendants are permitted to carry through on their threats, the impact and results would surely be felt by, and would be extremely harmful to, [Collins & Aikman] and its reorganization efforts."

Collins & Aikman said it owns and operates Collins & Aikman Hermosillo, and it is the newest, most unique and single largest revenue-producing plant in Collins & Aikman's entire family of companies.

Collins & Aikman said it is seeking an order declaring that any attempt by the defendants during the company's bankruptcy case to foreclose on the assets, stock or other property interests constitutes a violation of the automatic stay under bankruptcy law.

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

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