Collins & Aikman Files Plan of Reorganization to Emerge from Chapter 11

Plan Supported by Senior Lenders' Steering Committee

SOUTHFIELD, Mich., Aug. 31 -- Collins & Aikman Corporation (CKCRQ) announced that yesterday it filed with the Bankruptcy Court in Detroit a stand-alone Plan of Reorganization (the "Plan") and an accompanying Disclosure Statement. Collins & Aikman will now work expeditiously toward satisfying various conditions to obtain approval of the Disclosure Statement and Plan, and ultimately exit Chapter 11.

"While we still have more to accomplish to complete our reorganization, filing our Plan brings us significantly closer to successfully reorganizing C&A for the benefit of our more than 12,000 employees, as well as our stakeholders and valued customers," said Frank Macher, president and chief executive officer. "This Plan will enable us to emerge from Chapter 11 early next year in a much improved competitive position that is able to fully support our customers."

Under the Plan, Collins & Aikman will emerge with a significantly de-levered balance sheet. The Company's secured debt under its Prepetition Credit Agreement will be converted into common stock in reorganized Collins & Aikman. Under the Plan, unsecured creditors who vote in favor of the Plan will receive their share of warrants and interests in a litigation trust. All existing equity interests in Collins & Aikman Corporation will be canceled with no distribution.

"After months of complex negotiations and a comprehensive M&A process, we have filed a Plan with the support of the steering committee of our senior lenders," said Macher. "Through contributions from our creditors, customers and employees, we will improve our cost structure, strengthen our balance sheet and position C&A for long-term success. The Plan also provides us the flexibility to continue the M&A process as an alternative exit strategy."

Confirmation of the Plan is subject to a number of conditions, which include entering into certain agreements with Collins & Aikman's customers, modification of certain labor-related obligations and resolution of ongoing government investigations.

The Disclosure Statement and Plan have not been approved by the Bankruptcy Court, and may be materially modified before approval. This release is not intended as a solicitation for a vote on the Plan.

Collins & Aikman Corporation is a leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, plastic-based trim, and convertible top systems. The Company is headquartered in Southfield, Michigan. Additional information about Collins & Aikman, the Plan of Reorganization, the Disclosure Statement, and any exhibits, when filed, will be available on the Internet at http://www.collinsaikman.com/.