Collins & Aikman agrees to $9.59 million fabrics property purchase under lease settlement

By Caroline Salls

Pittsburgh, May 18 - Collins & Aikman Corp. requested court approval of a master lease agreement dispute settlement under which Collins & Aikman will purchase a fabrics property from landlord Fabric (DE) GP for $9.59 million, according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of Michigan.

Collins & Aikman will also make an up to $1.1 million payment for fees and costs due under the lease.

According to the motion, Collins & Aikman's fabrics properties have been closed in connection with the wind-down of its fabrics business.

Fabric (DE) objected to Collins & Aikman's attempt to reject the leases on the fabrics properties, and the court ordered Collins & Aikman to pay disputed tax obligations on the properties.

Collins & Aikman appealed the tax order, but has agreed to withdraw the appeal as part of the settlement.

The company has requested a hearing be scheduled for May 24.

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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