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): January 5, 2006 at 2:00 p.m. Objection Deadline: December 30, 2005 at 4:00 p.m.

FIRST SUPPLEMENTAL APPLICATION OF THE DEBTORS FOR AN ORDER AUTHORIZING THE AUDIT COMMITTEE OF COLLINS & AIKMAN CORPORATION TO EXPAND THE SCOPE OF ITS RETENTION OF DAVIS POLK & WARDWELL AS SPECIAL COUNSEL TO THE AUDIT COMMITTEE TO INCLUDE SERVICES RELATED TO A GRAND JURY SUBPOENA RECEIVED BY COLLINS & AIKMAN FROM THE UNITED STATES ATTORNEYS OFFICE FOR THE SOUTHERN DISTRICT OF NEW YORK, A RELATED INQUIRY FROM THE UNITED STATES SECURITIES & EXCHANGE COMMISSION, AND OTHER MATTERS INVOLVING GOVERNMENT REGULATORS AND LAW ENFORCEMENT OFFICIALS AS MAY ARISE

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. 0555957; 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. 0555992; 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.

K&E 10872353.1

0W[;%,5

0555927051221000000000012

,c

The above-captioned debtors (collectively, the Debtors) hereby submit this application (the First Supplemental Retention Application) pursuant to Rules 2014(a) and 2016(b) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and Rule 2014-1 of the Local Bankruptcy Rules for United States Bankruptcy Court in the Eastern District of Michigan (the Local Rules) for entry of an order (the First Supplemental Retention Order), in substantially the form attached hereto as Exhibit A, under section 327(e) of title 11 of the United States Code, 11 U.S.C. 101 1330 (the Bankruptcy Code), authorizing (1) the Audit Committee 2 of Collins & Aikman Corporation (C&A or the Company) to expand the scope of its retention of Davis Polk & Wardwell (DPW) as special counsel to the Audit Committee to include services related to a grand jury subpoena received by C&A from the United States Attorneys Office for the Southern District of New York (the U.S. Attorneys Office), a related inquiry from the United States Securities and Exchange Commission (the SEC) and other matters involving government regulators and law enforcement officials as may arise (collectively, the Government Inquiries), and (2) the Debtors to pay the fees and expenses charged and incurred by DPW in connection with this expanded representation of the Audit Committee. In making this First Supplemental Retention Application,

Debtors rely upon the Second Supplemental Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell in Support of the First Supplemental Application of the Debtors for an Order Authorizing the Audit Committee of Collins &

Capitalized terms not defined herein have the meaning ascribed to them in the Application of the Debtors for an Order Authorizing the Audit Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered into by Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters, and Other Matters that Have Arisen in the Course of the Investigation, which was filed on June 3, 2005 (Docket No. 226) (the Retention Application).

4
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Aikman Corporation to Expand the Scope of its Retention of Davis Polk & Wardwell as Special Counsel to the Audit Committee to Include Services Related to a Grand Jury Subpoena Received by Collins & Aikman from the United States Attorneys Office for the Southern District of New York, a Related Inquiry from the United States Securities and Exchange Commission, and Other Matters Involving Government Regulators and Law Enforcement Officials As May Arise, which is attached hereto as Exhibit B (the Second Supplemental DPW Declaration). In support of this First Supplemental

Retention Application, the Debtors respectfully state as follows: Jurisdiction 1. The Court has jurisdiction over this Application pursuant to 28 U.S.C.

157 and 1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue of this proceeding and the Application in this District is proper under 28 U.S.C. 1408 and 1409. 2. The statutory bases for the relief requested herein are section 327(e) of the

Bankruptcy Code and Bankruptcy Rules 2014 and 2016. Background 3. 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
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4.

On May 24, 2005, the United States trustee appointed an official

committee of unsecured creditors pursuant to section 1102 of the Bankruptcy Code (the Creditors Committee). 5. 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 DAutomobiles, Toyota SA and Volkswagen AG. 6. On June 3, 2005, the Debtors submitted to this Court their Application of

the Debtors for an Order Authorizing the Audit Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered into by Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters, and Other Matters that Have Arisen in the Course of the Investigation (Docket No. 226) (the Retention Application). On that same date, in support of and in conjunction with the Retention Application, DPW filed with this Court its Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell in Support of the Application of the Debtors for an Order Authorizing the Audit Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered Into By Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters,

6
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and Other Matters That Have Arisen in the Course of the Investigation (Docket No. 226) (the Original DPW Declaration). 7. On June 9, 2005, this Court entered an Order Authorizing the Audit

Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered into by Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters and Other Matters That Have Arisen in the Course of the Investigation (Docket No. 287) (the Retention Order) 8. On November 11, 2005, DPW submitted its First Supplemental

Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell Pursuant to Bankruptcy Rule 2014 (Docket No. 1686) (the First Supplemental DPW Declaration) to provide additional disclosures required under Bankruptcy Rule 2014(a). Relationship of Debtors and DPW 9. On or about March 17, 2005, C&A publicly announced that during the

course of finalizing its financial statements for its fiscal year ended December 31, 2004, it had identified certain accounting for supplier rebates that led to premature or inappropriate revenue recognition or that was inconsistent with relevant accounting standards and C&As policies and practices. C&A further announced that it had initiated an internal review of these matters and that it expected that certain restatements of its financial results would be required. 10. As part of that announcement, C&A also stated that it would not be able to

file its Annual Report on Form 10-K containing fiscal 2004 audited financial statements

7
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with the SEC on time. C&A stated that it required additional time to complete the review of the accounting issues described above, its financial reporting process, and its controls over financial reporting. On or about March 24, 2005, C&A publicly disclosed that the Audit Committee had determined to conduct an independent investigation into these matters and that the Audit Committee had retained DPW as independent counsel to assist it in the investigation.3 11. On or about May 12, 2005, C&A announced, among other things, that the

scope of the investigation would also include C&As forecasts for the first quarter of 2005 and related matters, as well as other matters that have arisen in the course of the investigation. In addition, DPW has been investigating other confidential matters at C&A at the request of the Audit Committee. (For ease of reference, the matters currently being investigated by DPW are referred to herein collectively as the Rebate Investigation.) 12. On or about August 12, 2005, C&A announced that it had received a

grand jury subpoena from the U.S. Attorneys Office (the Grand Jury Subpoena), seeking documents and information relating to C&As financial statements for the 2004 and 2005 fiscal years, and documents and information relating to, among other things, accounts receivable, and supplier and customer rebates. At the time of that

announcement, C&A stated that it has been complying with similar requests from the SEC.

After DPW was originally retained by the Audit Committee to conduct the Rebate Investigation (as defined herein), the scope of DPWs representation was expanded to include advising the Independent Directors with respect to certain issues relating to corporate governance and the bankruptcy process.

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13.

In connection with the Rebate Investigation, DPW has conducted

extensive work related to the retrieval, archival, review and analysis of information, documents, and data from C&A, in both electronic and paper format. To date,

approximately 638,000 pages of documents have been reviewed by DPW. In light of its familiarity with and access to information, documents, and data collected from C&A, DPW has also, as part of its representation of the Audit Committee, assisted C&A since August 12, 2005, or shortly thereafter, in connection with its response to the Grand Jury Subpoena and to the related SEC inquiry. In order to avoid duplication of collection and review work that DPW has already performed, DPW has produced documents responsive to the Grand Jury Subpoena and to related requests by the SEC that it had already collected on behalf of the Audit Committee in the course of its work on the Rebate Investigation. 14. In light of DPWs experience working on the Rebate Investigation, and its

extensive experience representing clients in connection with government investigations, in late-October 2005, DPW was approached by C&As General Counsel and asked to consider whether, in addition to its current duties on behalf of the Audit Committee related to the Rebate Investigation, it could also provide representation to C&A in connection with the Government Inquiries (the Expanded Representation). After

discussions with the Audit Committee regarding this request, DPW determined that it could accept the Expanded Representation if responsibility for responding to the Government Inquiries on behalf of C&A were delegated by the Board of Directors of C&A to the Audit Committee. On November 10, 2005, upon request of the Audit Committee, the Board of Directors of C&A delegated responsibility for responding to the

9
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Government Inquiries on behalf of C&A to the Audit Committee. Shortly thereafter, the Audit Committee formally requested that DPW take on the Expanded Representation on behalf of the Audit Committee. 15. On November 18, 2005, after multiple discussions with counsel to the

Creditors Committee regarding the Audit Committees request that DPW expand the scope of its representation to include matters related to the Government Inquiries, DPW participated in a specially convened conference call with the Creditors Committee itself and with counsel for C&A (Company Counsel) to discuss the proposed Expanded Representation.4 At that time, DPW stated to the Creditors Committee and Company Counsel that, in light of its prior and continuing work on the Rebate Investigation, its extensive experience advising clients in government investigations, and its broad white collar and regulatory practice generally, it believed it was well-situated to perform the Expanded Representation in a thorough and efficient manner. DPW indicated to those participating in the call that it had already secured the approval of the U.S. Attorneys Office and of the SEC to take on the Expanded Representation. 16. During the November 18, 2005 conference call, DPW again confirmed to

the Creditors Committee and to Company Counsel that it has been directed by both the U.S. Attorneys Office and the SEC (collectively, the Government) to maintain confidential substantial information related to the Rebate Investigation and the Government Inquiries, and that, as a result, it is entirely possible that the Creditors Committee and indeed all parties could ultimately be unable to fully evaluate the nature

In response to a question from a member of the Creditors Committee, DPW confirmed certain matters regarding its unrelated representation of KPMG during this conference call.

10
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of the work performed, and the fees sought, by DPW in connection with the Expanded Representation. DPW stated during the conference call that it would nonetheless strive to provide the maximum transparency possible to the Creditors Committee and Company Counsel regarding its work on, and fees arising from, the Expanded Representation within the strictures imposed by the Government. DPW communicated to the Creditors Committee and Company Counsel during the conference call that it would take on the Expanded Representation only upon assurances from the Creditors Committee that, in expressing its support for DPWs Expanded Representation of the Audit Committee, the Creditors Committee fully understood these substantial and possibly permanent limitations on the Committees ability to review the scope and quality of DPWs work and thus the reasonableness of the resultant fees. The Creditors Committee at that time acknowledged its full understanding of these potential limitations on its ability to review DPWs work and fees in connection with the proposed Expanded Representation and expressed its support for the Expanded Representation by DPW. 5 DPW and the

Company, it should be noted, did not ask the Creditors Committee to waive any rights, merely to acknowledge fully the unusual circumstances and limitations as set forth above. Relief Requested 17. By this First Supplemental Application, the Debtors seek court approval,

pursuant to section 327(e) of the Bankruptcy Code and Bankruptcy Rules 2014(a) and 2016(b) and Local Rule 2014-1, for (1) the Audit Committee to expand the scope of its retention of DPW as special counsel to the Audit Committee to include services related to

The agents for the pre- and postpetition senior, secured lenders were also informed of the requested expansion of retention of DPW and have no objection to such expanded retention.

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the Government Inquiries, and (2) the Debtors to pay the fees and expenses charged and incurred by DPW in connection with the Expanded Representation of the Audit Committee. Scope of Services 18. In addition to the services related to the Rebate Investigation described in

the Retention Application, the Debtors propose that DPW render legal services as may be requested by the Audit Committee in connection with the Government Inquiries (the New Services), including: (a) assisting current and former officers, directors, and employees of C&A, as necessary, in connection with requests for information from the Government. coordinating and conducting (i) the retrieval, archival, and review of information, documents, and electronic mail from C&A, in both electronic and paper format, and (ii) the production of such materials to the Government. acting, if necessary, as a liaison between (i) the Audit Committee, on the one hand, and (ii) the Creditors Committee and the Government, on the other hand, in connection with the Government Inquiries; performing such other services and doing such other acts in connection with the Government Inquiries as the Audit Committee may determine to be either in furtherance of the successful response to the Government Inquiries or appropriate and related to the Government Inquiries.

(b)

(c)

(d)

19.

To minimize costs, DPW is prepared to work closely with the Debtors and

each of their other retained professionals to delineate clearly the professionals respective duties so as to prevent unnecessary duplication of services whenever possible.

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Basis for Relief Retention of DPW 20. A debtor may employ counsel for a specified special purpose, other than

to represent the trustee in conducting the case . . . if in the best interest of the estate, and if such attorney does not represent or hold any interest adverse to the debtor or to the estate with respect to the matter on which attorney is to be employed. 11 U.S.C. 327(e); see Vining v. Taunt (In re M.T.G., Inc.), 298 B.R. 310, 31718 (E.D. Mich. 2003). Best Interest of the Estate 21. The Debtors believe that it is in the best interest of the estate that the scope

of the retention of DPW by the Audit Committee be expanded to include the New Services related to the Government Inquiries. In light of its access to and familiarity with information, documents, and data collected from C&A as part of the Rebate Investigation, and in light of its previous assistance to C&A in responding to the Grand Jury Subpoena and the related SEC inquiry, DPWs performance of the New Services will allow C&A to produce documents in response to the Government Inquiries in the most expeditious and cost-effective manner possible. Moreover, because of its extensive prior and continuing roles in the Rebate Investigation, DPW will be able, through the Expanded Representation, to (i) effectively and efficiently assist current and former officers, directors, and employees of C&A, as necessary, in connection with requests for information from government regulators and law enforcement agencies and (ii) act as a liaison between the Audit Committee, on the one hand, and the Creditors Committee and Government, on the other hand, on issues related to the Government Inquiries.

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22.

The Debtors further believe that the Expanded Representation is in the

best interest of the estate because DPW has extensive experience in representing clients in government investigations and has a broad white collar practice generally. As part of this practice, DPW has many highly respected criminal defense lawyers, many of whom have been prosecutors or enforcement officials, including the former U.S. Attorney for the Southern District of New York. No Adverse Interest 23. With respect to the degree of disinterestedness required of an attorney

employed as special counsel, this District has recognized that section 327(e) only requires that the attorney not be in conflict with (i.e., not hold an interest adverse to the estate) with the trustee for the specific purpose that the special counsel designation applies. Vining, 298 B.R. at 318. To the best of the Debtors knowledge, except as described in the Second DPW Declaration and the Supplemental DPW Declaration, DPW does not: (i) represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which DPW is to be employed; or (ii) have any connections with the Debtors, any creditors or other parties in interest, their respective attorneys and accountants, or the United States Trustee or any of its employees. Notice 24. Notice of this Application has been given to the Core Group and Affected

Parties as required by the Case Management Procedures.6

Capitalized terms used in this paragraph 23 not otherwise defined herein shall have the meanings set forth in the Case Management Order.

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No Prior Request 25. No prior application for the relief requested herein has been made to this

or any other court. WHEREFORE, the Debtors respectfully request the entry of an order, substantially in the form attached hereto as Exhibit A, (1) authorizing (A) the Audit Committee to expand the scope of its retention of DPW as special counsel to the Audit Committee to include services related to the Government Inquiries and (B) the Debtors to pay the fees and expenses charged and incurred by DPW in connection with the Expanded Representation of the Audit Committee and (2) granting such further relief as the Court deems appropriate.

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Dated: December 21, 2005

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) 300 East Maple Road, Third Floor Birmingham, Michigan 48009 Telephone: (248) 644-4840 Facsimile: (248) 644-1832 Co-Counsel for the Debtors

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EXHIBIT A

K&E 10872353.1

IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ) Chapter 11 ) 1 COLLINS & AIKMAN CORPORATION, et al. ) Case No. 05-55927 (SWR) ) (Jointly Administered) Debtors. ) ) (Tax Identification #13-3489233) ) ) Honorable Steven W. Rhodes FIRST SUPPLEMENTAL ORDER AUTHORIZING THE AUDIT COMMITTEE OF COLLINS & AIKMAN CORPORATION TO EXPAND THE SCOPE OF ITS RETENTION OF DAVIS POLK & WARDWELL AS SPECIAL COUNSEL TO THE AUDIT COMMITTEE TO INCLUDE SERVICES RELATED TO A GRAND JURY SUBPOENA RECEIVED BY COLLINS & AIKMAN FROM THE UNITED STATES ATTORNEYS OFFICE FOR THE SOUTHERN DISTRICT OF NEW YORK, A RELATED INQUIRY FROM THE UNITED STATES SECURITIES & EXCHANGE COMMISSION, AND OTHER MATTERS INVOLVING GOVERNMENT REGULATORS AND LAW ENFORCEMENT OFFICIALS AS MAY ARISE

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. 0555957; 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. 0555992; 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.

2
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Upon the application (the First Supplemental Application) of the abovecaptioned debtors (collectively, the Debtors) pursuant to Rules 2014(a) and 2016(b) of the Federal Rules of Bankruptcy Procedure and Rule 2014-1 of the Local Bankruptcy Rules for the United States Bankruptcy Court in the Eastern District of Michigan for entry of an order, pursuant to section 327(e) of the Bankruptcy Code, authorizing(1) the audit committee (the Audit Committee) of Collins & Aikman Corporation (C&A) to expand the scope of its retention of Davis Polk & Wardwell (DPW) as special counsel to the Audit Committee to include services related to a grand jury subpoena received by Collins & Aikman from the United States Attorneys Office for the Southern District of New York (the U.S. Attorneys Office), a related inquiry from the United States Securities and Exchange Commission (the SEC), and other matters related to government regulators and law enforcement officials as may arise (collectively, the Government Inquiries), and (2) the Debtors to pay the fees and expenses charged and incurred by DPW in connection with this expanded representation of the Audit Committee; upon the second supplemental declaration of Dennis E. Glazer (the Second Supplemental DPW Declaration); the Court being satisfied based on the representations made in the Second Supplemental DPW Declaration that DPW neither represents nor holds any interest adverse to the Debtors or the Debtors estate with respect to the matters upon which DPW is to be engaged; the official committee of unsecured creditors, both supporting the First Supplemental Application and having acknowledged that, due to confidentiality limitations imposed by the U.S. Attorneys Office and the SEC, it may ultimately be limited in its ability to assess the work performed by DPW and the reasonableness of the fees incurred in connection therewith; it appearing that the relief 3
K&E 10872353.1

requested is in the best interests of the Debtors estates, their creditors, and other parties in interest; it appearing that this 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 First Supplemental Application in this District is proper pursuant to 28 U.S.C. 1408 and 1409; adequate notice of the First Supplemental Application and the opportunity for a hearing on this First Supplemental Application having been given and having been appropriate under the particular circumstances; it appearing that no further notice need be given; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED: 1. 2. The First Supplemental Application be and, it hereby is, granted. The Audit Committee is authorized to expand its retention of DPW as

special counsel to the Audit Committee to perform services related to the Government Inquiries, as described in the First Supplemental Application. 3. The Debtors are authorized to pay the fees and expenses charged and

incurred by DPW in accordance with the terms described in the First Supplemental Application, the procedures set forth in sections 330 and 331 of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Rules, the guidelines established by the Office of the United States Trustee and such other procedures as may be fixed by order of the Court. 4. Notwithstanding the possible applicability of Bankruptcy Rules 6004(g),

7062 and 9014, or otherwise, the terms and conditions of this Order shall be immediately effective and enforceable upon its entry. 4
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5.

This Court shall retain jurisdiction to hear and determine all matters

arising from 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 THE DEBTORS PLEASE TAKE NOTICE THAT the above-captioned debtors (collectively, the Debtors) have filed their First Supplemental Application for an Order Authorizing the Audit Committee of Collins & Aikman Corporation to Expand the Scope of its Retention of Davis Polk & Wardwell as Special Counsel to the Audit Committee to Include Services Related to a Grand Jury Subpoena Received by Collins & Aikman from the United States Attorneys Office for the Southern District of New York, a Related Inquiry from the United States Securities

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. 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.

K&E 10872353.1

and Exchange Commission and Other Matters Involving Government Regulators and Law Enforcement Officials as May Arise (the Motion). PLEASE TAKE FURTHER NOTICE THAT your rights may be affected. You may wish to review the Motion and discuss it with your attorney, if you have one in these cases. (If you do not have an 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 Motion, or if you want the Court to otherwise consider your views on the Motion, no later than December 30, 2005 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

Response or answer must comply with Rule 8(b), (c) and (e) of the Federal Rules of Civil Procedure.

2
K&E 10872353.1

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 December 30, 2005 at 4:00 p.m. prevailing Eastern Time, in accordance with the Case Management Procedures, including to: Kirkland & Ellis LLP Attn: Richard M. Cieri, Citigroup Center 153 East 53rd Street New York, NY 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 300 East Maple Road, Third Floor Birmingham, Michigan 48009 Facsimile: (248) 644-1832 E-mail: jfischer@carsonfischer.com

PLEASE TAKE FURTHER NOTICE THAT if no responses to the Motion are timely filed and served, the Court may grant the Motion and enter the order without a hearing as 3
K&E 10872353.1

set forth in Rule 9014-1 of the Local Rules for the United States Bankruptcy Court for the Eastern District of Michigan. Dated: December 21, 2005 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) 300 East Maple Road, Third Floor Birmingham, Michigan 48009 Telephone: (248) 644-4840 Facsimile: (248) 644-1832 Co-Counsel for the Debtors

4
K&E 10872353.1

CERTIFICATE OF SERVICE I, Ray C. Schrock, an attorney, certify that on the 21st day of December, 2005, 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 First Supplemental Application of the Debtors for an Order Authorizing the Audit Committee of Collins & Aikman Corporation to Expand the Scope of its Retention of Davis Polk & Wardwell as Special Counsel to the Audit Committee to Include Services Related to a Grand Jury Subpoena Received by Collins & Aikman from the United States Attorneys Office for the Southern District of New York, a Related Inquiry from the United States Securities and Exchange Commission and Other Matters Involving Government Regulators and Law Enforcement Officials as May Arise.

Dated: December 21, 2005 /s/ Ray C. Schrock Ray C. Schrock

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In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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Jim Cambio Of Ingersoll Joseph T. Deters

Service de la Tresorerie

treasReg@michigan.gov steve.e.spence@usdoj.gov laplante@millercanfield.com tpryce@ford.com jcambio@tax.ri.gov elantz@town.ingersoll.on.ca radom@butzel.com treasurer@tos.state.oh.us tsherick@honigman.com Frank.Chaffiotte@cit.com e-rental@ur.com msaintdenis@ville.farnham.qc.ca blanderson@eastman.com kandrews@e-bbk.com wdiehl@e-bbk.com bbyrne@e-bbk.com

In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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Barb Krzywiecki Dan Thiffault George Tabry Christine Brown Sales & Use Tax Division Lorraine Zinar Daniel Watson Linda King Bruce B Galletly Raymond Soucie

Tom Tekieke General Fax Terry Nardone Adriana Avila

In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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(no valid e-mail or fax)

CREDITOR NAME Advanced Composites Inc Akin Gump Strauss Hauer & Feld LLP Assoc Receivables Funding Inc Basell USA Inc Basf Corporation Butzel Long PC Canada Customs & Rev Agency Canada Customs & Rev Agency Charter Township Of Plymouth City Of Barberton City Of Barberton City Of Canton City Of Dover City Of Dover City Of Evart Recreation Dept City Of Fullerton City Of Havre De Grace City Of Phoenix City Of Roxboro City Of Williamston City Treasurer Collector Of Revenue Collins & Aikman Corp Davis Polk & Wardwell DuPont Dykema Gossett PLLC ER Wagner Manufacturing Fisher Automotive Systems Fisher America Inc Freudenberg Nok Inc Ga Dept Of Revenue Ge Capital Ge Capital Ge Capital Ge Capital Comm Serv Astro Dye Highwoods Forsyth Lp Highwoods Forsyth Lp Hnk Michigan Properties Indiana Department Of Revenue Indiana Dept Of Revenue Industrial Development Board Industrial Leasing Company Industrial Truck Sales & Svc Inmet Division of Multimatic Internal Revenue Service Invista ISP Elastomer Janesville Products Keith Milligan Latham & Watkins LLP Lear Corp Manpower Meridian Park Ministre Du Revenu Du Quebec Municipality Of Port Hope North Loop Partners Ltd PolyOne Corp Prestige Property Tax Special Princeton Properties

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

of the City of Montgomery

SBSE Insolvency Unit Tim Gorman Laura Kelly David Heller Josef Athanas & Danielle Kemp C Garland Waller

co Beer Wells Real Estate Woody Ban

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In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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In re: Collins & Aikman Corp., et al. Case No. 05-55927 (SWR)

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EXHIBIT B

K&E 10872353.1

IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: ) Chapter 11 ) 1 COLLINS & AIKMAN CORPORATION, et al. ) Case No. 05-55927 (SWR) ) (Jointly Administered) Debtors. ) ) (Tax Identification #13-3489233) ) ) Honorable Steven W. Rhodes ) SECOND SUPPLEMENTAL DECLARATION OF DENNIS E. GLAZER AND DISCLOSURE STATEMENT OF DAVIS POLK & WARDWELL IN SUPPORT OF THE FIRST SUPPLEMENTAL APPLICATION OF THE DEBTORS FOR AN ORDER AUTHORIZING THE AUDIT COMMITTEE OF COLLINS & AIKMAN CORPORATION TO EXPAND THE SCOPE OF ITS RETENTION OF DAVIS POLK & WARDWELL AS SPECIAL COUNSEL TO THE AUDIT COMMITTEE TO INCLUDE SERVICES RELATED TO A GRAND JURY SUBPOENA RECEIVED BY COLLINS & AIKMAN FROM THE UNITED STATES ATTORNEYS OFFICE FOR THE SOUTHERN DISTRICT OF NEW YORK, A RELATED INQUIRY FROM THE UNITED STATES SECURITIES & EXCHANGE COMMISSION, AND OTHER MATTERS INVOLVING GOVERNMENT REGULATORS AND LAW ENFORCEMENT OFFICIALS AS MAY ARISE

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. 0555957; 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. 0555992; 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.

2
K&E 10872353.1

Dennis E. Glazer declares, pursuant to 28 U.S.C. 1746, as follows: 1. I am a partner of the firm of Davis Polk & Wardwell (DPW or the

Firm), a law firm with its principal office at 450 Lexington Avenue, New York, New York 10017, and other offices in Washington, D.C., Menlo Park, California; London, England; Paris, France; Frankfurt, Germany; Madrid, Spain; Tokyo, Japan; and Hong Kong. 2. I submit this supplemental declaration2 (the Second Supplemental DPW

Declaration) (1) in connection with the application (the First Supplemental Application), dated December 21, 2005, of the above-captioned debtors and debtors-inpossession (collectively, the Debtors) for an order authorizing (A) the audit committee (the Audit Committee) of Collins & Aikman Corporation (C&A or the Company) to expand the scope of its retention of DPW as special counsel to the Audit Committee to include services related to the Government Inquiries (as defined below) at rates that do not exceed the Firms customary hourly rates in effect from time to time and in accordance with the Firms normal reimbursement policies, in compliance with sections 328(a), 329 and 504 of title 11 of the United States Code (the Bankruptcy Code) and (B) the Debtors to pay the fees and expenses charged and incurred by DPW in connection with this expanded representation of the Audit Committee and (2) to provide the

The Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell in Support of the Application of the Debtors for an Order Authorizing the Audit Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered Into By Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters, and Other Matters That Have Arisen in the Course of the Investigation was filed with this Court, in support of the Retention Application, on June 3, 2005 (Docket No. 226) (the Original DPW Declaration). The First Supplemental Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell Pursuant to Bankruptcy Rule 2014 was filed with this Court on November 11, 2005 (Docket No. 1686) (the First Supplemental DPW Declaration).

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disclosure required under rules 2014(a) and 2016(b) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). Unless otherwise stated in this Second

Supplemental Declaration, I have personal knowledge of the facts set forth herein. To the extent any information disclosed herein requires amendment or modification upon DPWs completion of further review or as additional party in interest information becomes available to it, a supplemental declaration will be submitted to the Court reflecting such amended or modified information. Background 3. 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. 4. On June 3, 2005, the Debtors submitted to this Court their Application of

the Debtors for an Order Authorizing the Audit Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered into by Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters, and Other Matters that Have Arisen in the Course of the Investigation (Docket No. 226) (the Retention Application). On that same date, in support of and in conjunction with the Retention Application, DPW filed with this Court its Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell in Support of the Application of the 4
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Debtors for an Order Authorizing the Audit Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered Into By Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters, and Other Matters That Have Arisen in the Course of the Investigation (Docket No. 226) (the Original DPW Declaration). 5. On June 9, 2005, this Court entered an Order Authorizing the Audit

Committee and the Independent Directors of Collins & Aikman Corporation to Employ and Retain Davis Polk & Wardwell Nunc Pro Tunc as Special Counsel to the Audit Committee and the Independent Directors in Connection with an Investigation into Rebate Transactions Entered into by Collins & Aikman, Collins & Aikmans Forecasts for the First Quarter of 2005 and Related Matters, and Other Matters That Have Arisen in the Course of the Investigation (Docket No. 287) (the Retention Order) 6. On November 11, 2005, DPW submitted its First Supplemental

Declaration of Dennis E. Glazer and Disclosure Statement of Davis Polk & Wardwell Pursuant to Bankruptcy Rule 2014 (Docket No. 1686) (the First Supplemental DPW Declaration) to provide additional disclosures required under Bankruptcy Rule 2014(a). Relationship of Debtors And DPW 7. On or about March 17, 2005, C&A publicly announced that during the

course of finalizing its financial statements for its fiscal year ended December 31, 2004, it had identified certain accounting for supplier rebates that led to premature or inappropriate revenue recognition or that was inconsistent with relevant accounting 5
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standards and C&As policies and practices. C&A further announced that it had initiated an internal review of these matters and that it expected that certain restatements of its financial results would be required. 8. As part of that announcement, C&A also stated that it would not be able to

file its Annual Report on Form 10-K containing fiscal 2004 audited financial statements with the SEC on time. C&A stated that it required additional time to complete the review of the accounting issues described above, its financial reporting process, and its controls over financial reporting. On or about March 24, 2005, C&A publicly disclosed that the Audit Committee had determined to conduct an independent investigation into these matters and that the Audit Committee had retained DPW as independent counsel to assist it in the investigation.3 9. On or about May 12, 2005, C&A announced, among other things, that the

scope of the investigation would also include C&As forecasts for the first quarter of 2005 and related matters, as well as other matters that have arisen in the course of the investigation. In addition, DPW has been investigating other confidential matters at C&A at the request of the Audit Committee. (For ease of reference, the matters currently being investigated by DPW are referred to herein collectively as the Rebate Investigation.) 10. On or about August 12, 2005, C&A announced that it had received a

grand jury subpoena from the U.S. Attorneys Office (the Grand Jury Subpoena),

After DPW was originally retained by the Audit Committee to conduct the Rebate Investigation (as defined herein), the scope of DPWs representation was expanded to include advising the Independent Directors with respect to certain issues relating to corporate governance and the bankruptcy process.

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seeking documents and information relating to C&As financial statements for the 2004 and 2005 fiscal years, and documents and information relating to, among other things, accounts receivable, and supplier and customer rebates. At the time of that

announcement, C&A stated that it has been complying with similar requests from the SEC. 11. In connection with the Rebate Investigation, DPW has conducted

extensive work related to the retrieval, archival, review and analysis of information, documents, and data from C&A, in both electronic and paper format. To date,

approximately 638,000 pages of documents have been reviewed by DPW. In light of its familiarity with and access to information, documents, and data collected from C&A, DPW has also, as part of its representation of the Audit Committee, assisted C&A since August 12, 2005, or shortly thereafter, in connection with its response to the Grand Jury Subpoena and to the related SEC inquiry. In order to avoid duplication of collection and review work that DPW has already performed, DPW has produced documents responsive to the Grand Jury Subpoena and to related requests by the SEC that it had already collected on behalf of the Audit Committee in the course of its work on the Rebate Investigation. 12. In light of DPWs experience working on the Rebate Investigation, and its

extensive experience representing clients in connection with government investigations, in late-October 2005, DPW was approached by C&As General Counsel and asked to consider whether, in addition to its current duties on behalf of the Audit Committee related to the Rebate Investigation, it could represent C&A in connection with its response to the Grand Jury Subpoena and the related SEC inquiry, and other matters 7
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involving government regulators and law enforcement officials as may arise (collectively, the Government Inquiries). After discussions with the Audit Committee regarding this request, DPW determined that it could accept the representation in connection with the Government Inquiries (the Expanded Representation) if responsibility for responding to the Government Inquiries on behalf of C&A were delegated by the Board of Directors of C&A to the Audit Committee. On November 10, 2005, upon request of the Audit Committee, the Board of Directors of C&A delegated responsibility for responding to the Government Inquiries on behalf of C&A to the Audit Committee. Shortly thereafter, the Audit Committee formally requested that DPW take on the Expanded Representation on behalf of the Audit Committee. 13. On November 18, 2005, after multiple discussions with counsel to the

official committee of unsecured creditors (the Creditors Committee) regarding the Audit Committees request that DPW expand the scope of its representation to include matters related to the Government Inquiries, DPW participated in a specially convened conference call with the Creditors Committee itself and with counsel for C&A (Company Counsel) to discuss the proposed Expanded Representation.4 At that time, DPW stated to the Creditors Committee and Company Counsel that, in light of its prior and continuing work on the Rebate Investigation, its extensive experience advising clients in government investigations, and its broad white collar and regulatory practice generally, it believed it was well-situated to perform the Expanded Representation in a thorough and efficient manner. DPW indicated to those participating in the call that it
4 In response to a question from a member of the Creditors Committee, DPW confirmed certain matters regarding its unrelated representation of KPMG during this conference call.

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had already secured the approval of the U.S. Attorneys Office and of the SEC to take on the Expanded Representation. 14. During the November 18, 2005 conference call, DPW again confirmed to

the Creditors Committee and to Company Counsel that it has been directed by both the U.S. Attorneys Office and the SEC (collectively, the Government) to maintain confidential substantial information related to the Rebate Investigation and the Government Inquiries, and that, as a result, it is entirely possible that the Creditors Committee and indeed all parties could ultimately be unable to fully evaluate the nature of the work performed, and the fees sought, by DPW in connection with the Expanded Representation. DPW stated during the conference call that it would nonetheless strive to provide the maximum transparency possible to the Creditors Committee and Company Counsel regarding its work on, and fees arising from, the Expanded Representation within the strictures imposed by the Government. DPW communicated to the Creditors Committee and Company Counsel during the conference call that it would take on the Expanded Representation only upon assurances from the Creditors Committee that, in expressing its support for DPWs Expanded Representation of the Audit Committee, the Creditors Committee fully understood these substantial and possibly permanent limitations on the Committees ability to review the scope and quality of DPWs work and thus the reasonableness of the resultant fees. The Creditors Committee at that time acknowledged its full understanding of these potential limitations on its ability to review DPWs work and fees in connection with the proposed Expanded Representation and expressed its support for the Expanded Representation by DPW. DPW and the Company,

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it should be noted, did not ask the Creditors Committee to waive any rights, merely to acknowledge fully the unusual circumstances and limitations as set forth above. Scope of Services Proposed to be Provided by DPW 15. I understand that the Debtors, on behalf of the Audit Committee, are

seeking to expand the scope of DPW representation of the Audit Committee to include services related to C&As response to Government Inquiries, and such other legal services as may be requested by the Audit Committee (the New Services), including: (a) assisting current and former officers, directors, and employees of C&A, as necessary, in connection with requests for information from the Government. coordinating and conducting (i) the retrieval, archival, and review of information, documents, and electronic mail from C&A, in both electronic and paper format, and (ii) the production of such materials to Government. acting, if necessary, as a liaison between (i) the Audit Committee, on the one hand, and (ii) the Creditors Committee and Government, on the other hand, in connection with the Government Inquiries; performing such other services and doing such other acts in connection with the Government Inquiries as the Audit Committee may determine to be either in furtherance of the successful response to the Government Inquiries or appropriate and related to the Government Inquiries or the bankruptcy process.

(b)

(c)

(d)

16.

I believe that DPW is well suited to provide the New Services to the Audit

Committee. DPW has extensive experience in representing clients in law enforcement and regulatory and actions arising out of internal investigations and has a broad white collar practice generally. As part of this practice, DPW has many highly respected criminal defense lawyers, many of whom have been prosecutors or enforcement officials, including the former U.S. Attorney for the Southern District of New York. 10
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17.

To minimize costs, DPW is prepared to work closely with the Debtors and

each of their other retained professionals to delineate clearly the professionals respective duties so as to prevent unnecessary duplication of services whenever possible. Disclosures 18. Neither DPW nor any partner of, counsel to, or associate of the Firm

represents or has any connections with any entity, other than as described in the Prior DPW Declarations, in connection with the Debtors chapter 11 cases. In addition, except as set forth in the Original DPW Declaration and First Supplemental DPW Declaration (the Prior DPW Declarations), to the best of my knowledge, neither DPW nor any partner of, counsel to, or associate of the Firm represents any party in interest in these chapter 11 cases in matters related to the Rebate Investigation or the Government Inquiries.5 19. Based on its application of the Internal Review Procedures, in connection

with the Prior DPW Declarations, DPW believes that it does not represent or hold any interest adverse to the Debtors or to the estate with respect to the New Services for which DPW is to be employed by the Audit Committee. Therefore (and because DPW

understands that the Debtors believe retention of DPW to be in the best interest of the estate) DPW, in accordance with Local Rule 2014-1, states that its employment by the

The disclosures in this Paragraph 18 are based on the results of the application of DPWs Internal Review Procedures (as defined in the Original DPW Declaration), as described in the Prior DPW Declarations. Such disclosures are made herein as of the respective dates of the Prior DPW Declarations. DPW has no reason to believe that these disclosures have become inaccurate. In this regard, if DPW discovers additional information that requires disclosure, DPW will file a supplemental disclosure with the Court as promptly as practicable. Further, every 90 days, DPW will utilize the Internal Review Procedures to determine whether any additional information regarding DPWs connections with potential parties in interest needs to be disclosed, and will make disclosure to the Court as appropriate.

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Audit Committee, under section 327(e) of the Bankruptcy Code, complies with section 327(a) of the Bankruptcy Code. 20. Despite the application of the Internal Review Procedures to identify and

disclose DPWs connections with parties in interest in these cases, because DPW is a national firm with approximately 650 attorneys based in 9 offices, and because the Debtors are a multinational enterprise likely to have thousands of creditors and other relationships, DPW is unable to state with certainty that every client representation or connection has been disclosed in the Prior DPW Declarations. In this regard, if DPW discovers additional information that requires disclosure, DPW will file a supplemental disclosure with the Court as promptly as practicable. Further, every 90 days, DPW will utilize the Internal Review Procedures to determine whether any additional information regarding DPWs connections with potential parties in interest needs to be disclosed, and will make disclosure to the Court as appropriate.

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Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct, and that this Declaration was executed on December 21, 2005.

/s/ Dennis E. Glazer Declarant: Dennis E. Glazer Title: Partner

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