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et al.1 Debtors. ) ) ) ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes
OBJECTION OF JSP MOLD LLC TO DEBTORS MOTION TO APPROVE SALE OF CERTAIN ASSETS OF DEBTORS INTERIORS PLASTICS GROUP AND DEMAND FOR ADEQUATE PROTECTION JSP Mold, LLC (JSP Mold), by an through its counsel, objects to the Debtors Motion for Entry of Orders Approving Bidding Procedures, Sale of Certain of the Assets of the Debtors Interior Plastics Group Free and Clear of Liens, Claims, Encumbrances and Interests and Related
1 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. 0555976; 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. 0555932; 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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Relief (the Motion) and demands adequate protection of its interest in certain property on the following bases: BACKGROUND 1. On May 17, 2005 (the C&A Petition Date), each of the above-captioned
debtors (the Debtors) filed a voluntary petition for relief under chapter 11 of Title 11 of the United States Code (the Bankruptcy Code). The Debtors chapter 11 cases are being jointly administered. 2. Prior to and since the C&A Petition Date, Lorro, Inc. (Lorro) placed purchase
orders (the Lorro/ Meridian POs) with Meridian Automotive Systems Detroit Operations, Inc. (Meridian Detroit) pursuant to which Meridian Detroit was to manufacture and sell bumper energy absorbers, fascia supports and other EPP automotive parts (the Parts) to Lorro. 3. Prior to and since the C&A Petition Date, Lorro also placed purchase orders (the
Lorro/JSP Mold POs) with JSP Mold pursuant to which JSP Mold was to manufacture certain tooling (the Tooling) needed by Meridian Detroit in order to manufacture the Parts. 4. Prior to and since the C&A Petition Date, pursuant to the Lorro/JSP Mold POs,
JSP Mold shipped the Tooling to Meridian Detroit at its facility in Detroit, Michigan. JSP Mold remains unpaid for certain of the Tooling (the Unpaid Tooling). 5. On April 28, 2006 (the Lorro Petition Date), Lorro filed a petition for relief
under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Michigan at docket #06-45353 and went out of business. 6. Subsequent to the Lorro Petition Date, JSP Mold obtained replacement purchase
orders (the C&A Replacement POs) from one or more of the Debtors for certain of the Unpaid Tooling. A list of the Unpaid Tooling subject to the C&A Replacement POs (the C&A
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Replacement PO Tooling) is attached as Exhibit A. Subsequent to issuance of the C&A Replacement POs, at the direction of one or more of the Debtors, Meridian Detroit re-shipped certain of the C&A Replacement PO Tooling to Createc, Inc. 7. Prior to shipment of the Tooling (including the C&A Replacement PO Tooling),
JSP Mold permanently recorded its name, street address, city and state on of all of the tools. In addition, JSP Mold has filed financing statements covering the C&A Replacement PO Tooling (with the exception of the 2006 PM49 Rear Upper, Plus 9 Cavities (10 Total), T2 x 1000 Vertical) in accordance with the requirements of section 9502 of the Uniform Commercial Code, as adopted in the State of Michigan. As a result, JSP Mold has taken all steps necessary under applicable Michigan law (MCLA 445.611 et seq.) to obtain and perfect a moldbuilders lien on the C&A Replacement PO Tooling(with the exception of the 2006 PM49 Rear Upper, Plus 9 Cavities (10 Total), T2 x 1000 Vertical). 8. Upon information and belief, none of the C&A Replacement PO Tooling is
property of the estate of any of the Debtors. Rather, all such tooling is owned by others, including various original equipment manufacturers. However, to the knowledge of JSP Mold, the Debtors have never acknowledged, in their Plan, their Disclosure Statement or otherwise, that the C&A Replacement PO Tooling is not property of the estate. 9. On April 2, 2007, the Debtors filed the Motion, which seeks authority to sell
certain of the assets of the Debtors interior plastics business free and clear of liens and other encumbrances. OBJECTION TO SALE 10. While the C&A Replacement PO Tooling is not specifically referenced as an asset
to be sold, as the Motion seeks authority to sell all tools, dies, jigs, molds and patterns . . ., JSP
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Mold believes that the C&A Replacement PO Tooling may be included in the universe of the assets the Debtors wish to sell. 11. While, under certain circumstances, debtors are permitted to sell property free of
interests pursuant to Section 363(f) of the Bankruptcy Code, such power does not extend to property which is not property of the debtors estate. JSP Mold objects to the sale of the C&A Replacement PO Tooling to the extent it is determined that the C&A Replacement PO Tooling is not property of the Debtors estates. 12. To the extent it is determined that any of the C&A Replacement PO Tooling is
property of the Debtors estates, JSP Mold does not consent to the sale of such property free and clear of its liens. As a result, in order to sell such property free and clear of JSP Molds liens, the Debtors are required to demonstrate that at least one of the conditions listed in Section 363(f)(1), (3), (4) or (5) of the Bankruptcy Code applies to JSP Molds liens on the C&A Replacement PO Tooling. However, none of the conditions stated in Section 363(f)(1), (3), (4) or (5) of the Bankruptcy Code applies to JSP Molds liens on the C&A Replacement PO Tooling. As a result, the Debtors may not sell the C&A Replacement PO Tooling free and clear of JSP Molds liens. 13. It does not appear to JSP Mold that the Motion seeks to treat the C&A
Replacement POs as executory contracts which would be assumed and assigned to a buyer. However, to the extent the Motion does seek such relief, JSP Mold objects to such assumption and assignment unless and until all defaults under such C&A Replacement POs are cured, as required by Section 365(f) of the Bankruptcy Code. The amount required to cure defaults under the C&A Replacement POs is $248,326.
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DEMAND FOR ADEQUATE PROTECTION 14. Section 363(e) of the Bankruptcy Code requires the court to condition the use,
sale or lease of property of an estate which is subject to an interest held by a third party on provision of adequate protection of such interest to such third party. To the extent the C&A Replacement PO Tooling is determined to be property of the Debtors estates, JSP Mold hereby demands that the Debtors use, sale (including sale pursuant to the Motion) or lease of such property be conditioned on the provision of adequate protection of JSP Molds interest in such property. WHEREFORE, JSP Mold LLC respectfully requests that this Court (a) exclude the C&A Replacement PO Tooling from the sale for which the Debtors request authorization in the Motion, or (b) in the alternative, condition the sale of the C&A Replacement PO Tooling on the provision to JSP Mold of adequate protection of JSP Molds interest in the C&A Replacement Tooling, and (c) for such other and further relief as this Court deems necessary and appropriate. Dated: May 11, 2007 Respectfully submitted, PEPPER HAMILTON LLP /s/ Hannah Mufson McCollum Francis J. Lawall Hannah Mufson McCollum (P67171) 100 Renaissance Center, 36th Floor Detroit, Michigan 48243 Telephone: (313) 259-7110 Facsimile: (313) 259-7926 and STEVENS & LEE P.C. Robert Lapowsky 1818 Market Street, 29th Floor Philadelphia, PA 19130 Telephone: (215) 751-1946 5
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Facsimile: 610-371-7958 Attorney to JSP Mold LLC Attorneys for JSP Mold LLC
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2007 MK BUX Front Checking Fixture 2006 PM 49 Front, Plus 8 Cavities (9 Total), T2 x 1000
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