UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

In re: COLLINS & AIKMAN CORPORATION, et al. Debtors.

Chapter 11 Case No. 05-55927 (Jointly Administered) Honorable Steven W. Rhodes

__________________________________________

THIRD INTERIM APPLICATION FOR APPROVAL OF PROFESSIONAL FEES AND EXPENSES INCURRED BY SITRICK AND COMPANY INC. AS CORPORATE COMMUNICATIONS CONSULTANTS TO THE DEBTORS FOR THE PERIOD JANUARY 1, 2006 THROUGH APRIL 30, 2006

Name of Applicant: Authorized to Provide Professional Services to:

Sitrick And Company Inc. Above-captioned Debtors and Debtors-in-possession June 9, 2005, effective as of May 17, 2005

Date of retention:

Period for which compensation and reimbursement are sought:

January 1, 2006 through April 30, 2006

Amount of Compensation sought as actual, reasonable and necessary: Amount of Expense Reimbursement sought as actual, reasonable and necessary: This is a/an: ____ monthly __X__ interim

$16,808.00

$858.00 ____ final application

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0555927060616000000000008

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Prior Fee Applications Filed:

Date Filed

Period Covered

Requested Fees

Requested Expenses

Fees Approved

Expenses Approved

10/12/05

5/17/05 8/31/05

$246,859.00

$35,990.62

$246,859.00

$35,990.62

3/27/2006

9/1/05 12/31/05

$20,401.50

$824.87

$20,401.50

$824.87

Monthly Fee Statements Covered by Interim Fee Application

Period Covered

Requested Fees

Requested Expenses

Amount of Fees Paid or To Be Paid

Amount of Expenses Paid or To Be Paid

Amount of Holdback Fees Requested

1/1/06 1/31/06

$10,694.50

$385.65

$8,555.60

$385.65

$2,138.90

2/1/06 2/28/06

$1,421.00

$202.97

$1,136.80

$202.97

$284.20

3/1/06 3/31/06

$3,580.50

$171.49

$2,864.40

$171.49

$716.10

4/1/06 4/30/06

$1,112.00

$97.89

$889.60

$97.89

$222.40

TOTALS FOR INTERIM FEE PERIOD (1/1/06 4/30/06): Fees Requested: Fees Paid to Date: Expenses Requested: Expenses Paid: Fees Held Back: $16,808.00 $13,446.40 $858.00 $858.00 $3,361.60

PROFESSIONAL SUMMARY

Name of Professional Person

Position

Hourly Billing Rate

Total Hours Billed

Total Compensation

Sandra Sternberg

Member of the Firm

$575.00

1.30

$747.50

Steven Goldberg

Member of the Firm

$395.00

17.50

$6,912.50

Giovanna Falbo

Associate

$245.00

35.30

$8,648.50

Meaghan Repko

Associate

$185.00

2.70

$499.50

Blended Hourly Rate: Total Hours Billed: GRAND TOTAL:

$295.92 56.80 $16,808.00

EXPENSE SUMMARY

Expense Category Facsimile Ground Transportation Long Distance Telephone Photocopies Postage and Delivery

Service Provider (if applicable)

Expense $21.00

Dial Car Sprint/Paetec

$208.49 $180.03 $50.60

FedEx

$397.88

TOTAL EXPENSES:

$ 858.00

UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

In re: COLLINS & AIKMAN CORPORATION, et al. Debtors.

Chapter 11 Case No. 05-55927 (Jointly Administered) Honorable Steven W. Rhodes

__________________________________________ THIRD INTERIM APPLICATION FOR APPROVAL OF PROFESSIONAL FEES AND EXPENSES INCURRED BY SITRICK AND COMPANY INC. AS CORPORATE COMMUNICATIONS CONSULTANTS TO THE DEBTORS FOR THE PERIOD JANUARY 1, 2006 THROUGH APRIL 30, 2006

Pursuant to sections 330 and 331 of title 11 of the United States Code (the Bankruptcy Code), Rule 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and this Courts Administrative Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals and Creditors' Committee Members, dated May 26, 2005 (the Administrative Order), Sitrick And Company Inc. (Sitrick), the duly appointed corporate communications consultants for Collins & Aikman Corporation and the other debtorin-possession herein (collectively, the Debtors), respectfully submits this interim application (the Interim Fee Application) for an order, substantially in the form attached hereto as Exhibit A, approving professional fees and expenses for services rendered to the Debtors during the period January 1, 2006 through April 30, 2006 (the Interim Fee Period). In this Interim Fee Application, Sitrick seeks, pursuant to the Administrative Order, interim allowance of fees in the amount of $16,808.00 and reimbursement of actual and necessary expenses in the amount of $858.00, for a total of $17,666.00 for the Interim Fee Period. In support of this Interim Fee

Application, Sitrick respectfully represents as follows: BACKGROUND GENERAL BACKGROUND 1. On May 17, 2005 (the Filing Date), the Debtors filed petitions for relief under

the Bankruptcy Code and commenced the above-captioned Chapter 11 case. The Debtors continue to operate their businesses and manage their properties as debtors and debtors in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. On May 24, 2005, the United States Trustee appointed an official committee of unsecured creditors. No trustee or examiner has been appointed in the Chapter 11 Case. JURISDICTION AND VENUE 2. This Court has jurisdiction to consider this Application pursuant to 28 U.S.C.

157 and 1334. Consideration of this Interim Fee Application is a core proceeding pursuant to 28 U.S.C. 157(b)(2). Venue of this case is proper in this district pursuant to 28 U.S.C. 1408 and 1409, respectively. The statutory predicates for the relief requested herein are sections 330 and 331 of the Bankruptcy Code. ADMINISTRATIVE ORDER 3. The Administrative Order authorizes certain professionals (each individually a

Professional) to serve monthly fee statements for interim compensation and reimbursement of expenses, pursuant to the procedures specified therein. The Administrative Order provides, among other things, that a Professional may submit a monthly fee statement for fees and costs incurred during the prior month. If no objections are made within fifteen (15) days after service of the monthly fee statement the Debtors are authorized to pay the Professional eighty percent (80%) of the requested fees and one hundred percent (100%) of the requested expenses not subject to objection. Beginning with the period ending on August 31, 2005, and at four-month

intervals or such other intervals convenient to the Court, the Professional shall file and serve interim applications for allowance of the amounts sought in its monthly fee statements for that period. All fees and expenses paid are on an interim basis until final allowance by the Court. RETENTION OF SITRICK 4. By application dated May 26, 2005 (Docket # 142; the Retention Application),

the Debtors sought authorization, pursuant to section 327(a) of the Bankruptcy Code, to retain and employ Sitrick as their corporate communications consultants in these Chapter 11 cases. The retention of Sitrick as corporate communications consultants to the Debtors was approved as of May 17, 2005 by this Courts Order Authorizing the Employment and Retention of Sitrick And Company Inc. as Corporate Communications Consultants to the Debtors (Docket # 289; the Retention Order). The Retention Order, a copy of which is attached hereto as Exhibit B, authorized Sitrick to be compensated on an hourly basis and to be reimbursed for actual and necessary out-of-pocket expenses. PREPETITION PAYMENTS TO SITRICK 5. Prior to the commencement of these cases, as disclosed in the Retention

Application and accompanying affidavit, Sitrick received a retainer in the amount of $90,000 (the Retainer). Sitrick also disclosed in the Retention Application that it would hold any amounts of the Retainer that were not applied to prepetition fees and expenses as a prepetition retainer to be applied, subject to approval of the Court, to postpetition fees and expenses incurred by Sitrick. 6. Sitricks actual accrued prepetition fees and expenses totaled $55,624.58.

Accordingly, Sitrick held remaining amount of the Retainer, or $34,375.42 (the On Account

Funds), as a prepetition retainer and fully applied the On Account Funds to fees and expenses previously approved by this Court. MONTHLY FEE STATEMENTS COVERED 7. Prior to the filing of this Interim Fee Application, Sitrick prepared four (4)

monthly fee statements collectively covering the time period from January 1, 2006 through April 30, 2006 (collectively, the Monthly Fee Statements). The first monthly fee statement covered the time period from January 1, 2006 through January 31, 2006. The second monthly fee statement covered the time period from February 1, 2006 through February 28, 2006. The third monthly fee statement covered the time period from March 1, 2006 through March 31, 2006. The fourth monthly fee statement covered the time period from April 1, 2006 through April 30, 2006. SITRICKS FEE STATEMENT FOR THE INTERIM FEE PERIOD 8. Attached hereto as Exhibit C is Sitricks Fee Statement for the Interim Fee Period

(the Interim Fee Statement). The Interim Fee Statement consists of the four Monthly Fee Statements, each of which contains a summary of all of the services performed by Sitrick on behalf of the Debtors during a particular month and is broken down into daily time entries. Each time entry contains a description of the specific activity, the professional performing such activity, the amount of time spent on the activity and the corresponding amount billed for such activity. Each professionals individual billing rate is set forth in the table of fees included in the cover page to this Interim Fee Application. In rendering the services described in the Interim Fee Statement, Sitrick expended a total of 56.80 hours and the reasonable value of the services rendered by Sitrick to the Debtors during the Interim Fee Period is $16,808.00. Sitricks blended hourly rate during the Interim Fee Period was $295.92. The rates sought for approval herein are

Sitricks usual and customary billing rates for the types of services performed and are in accordance with the Retention Application and the Retention Order. 9. To the best of Sitricks knowledge, this Interim Fee Application complies with

sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. 330, adopted by the Office of the U.S. Trustee (the Guidelines), the Administrative Order and this Courts Local Rule No. 2016-1. 10. Also contained within the Interim Fee Statement is a summary of actual and

necessary expenses incurred by Sitrick during the Fee Period. Sitrick charges all of its bankruptcy clients $.10 per page for photocopying expenses and $1.00 per page for outgoing facsimile transmissions. Actual long-distance carrier charges for outgoing facsimile transmissions are reflected in the long-distance telephone charges. 11. The Interim Fee Statement is incorporated herein by reference. REQUESTED RELIEF 12. By this Interim Fee Application, Sitrick requests entry of an order under 11

U.S.C. 330 and 331 (a) approving an interim award of compensation and reimbursement of expenses in the amounts of $16,808.00 and $858.00, respectively, which amounts were incurred during the Interim Fee Period; and (b) authorizing the Debtors to pay Sitrick all amounts requested in this Interim Fee Application remaining unpaid. 13. Sitrick has received no promise of payment for professional services rendered in

these cases other than in accordance with the provisions of the Bankruptcy Code.

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14.

All services for which compensation is sought herein were rendered by Sitrick to

the Debtors and not on behalf of any of the Debtors creditors, equity holders or any other person(s) or party(ies). 15. Except to the extent of the retainers paid to Sitrick as described in the Retention

Application, Sitrick has received no payment and no promises for payment from any source for services rendered in any capacity whatsoever in connection with the matters covered by this Interim Fee Application. There is no agreement or understanding between Sitrick and any other person(s) for the sharing of compensation to be received for services rendered in these cases. 16. At all relevant times, Sitrick has been a disinterested person as that term is

defined in Section 101(14) of the Bankruptcy Code and has not represented or held an interest adverse to the interest of the Debtors. 17. The professional services and related expenses for which Sitrick requests interim

allowance of compensation and reimbursement of expenses were rendered and incurred in connection with these cases in the discharge of Sitricks professional responsibilities as corporate communications consultants for the Debtors in these Chapter 11 cases. Sitricks services have been necessary and beneficial to the Debtors, their estates, their creditors and other parties in interest. SUMMARY OF SERVICES RENDERED 18. The Members and Associates of Sitrick who have rendered professional services

on behalf of the Debtors during the Interim Fee Period, for which Sitrick seeks compensation, are set forth on the table of professionals included as part of the cover sheet to this Interim Fee

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Application. The nature of the work performed by these professionals during the Interim Fee Period is fully set forth in the Interim Fee Statement. 1 19. The Debtors cases are unusually large and complex and involve several large key

constituents (including customers, suppliers, employees, retirees, investors, landlords, utilities and the media both in the U.S. and outside the U.S.) with whom it is crucial that the Debtors communicate effectively. Like many of the Debtors other professionals in these Chapter 11 cases, Sitrick was retained shortly before the Filing Date to assist the Debtors with their communications in connection with the Chapter 11 reorganization. Sitrick quickly advised the Debtors on their overall communications strategy and developed a communications plan for the Chapter 11 announcement. Sitrick prepared a wide variety of communications materials (including news releases, letters, talking points, scripts, Q&As and general information on Chapter 11) that were used with respect to the Debtors key constituents and helped implement the Chapter 11 communications plan during the first several days following the Filing Date. 20. Sitrick also set up and staffed a restructuring information hotline to take calls and

respond to inquiries from key constituents regarding the Chapter 11 filing and the impact of the filing and certain business issues on those key constituents. During the Interim Fee Period, the majority of the time spent by Sitrick involved responding to inquiries that came through the restructuring information hotline. Many of the inquiries came from suppliers, retirees and other creditors regarding outstanding invoices, benefits issues and bar date and proof of claim form information.

Sitrick does not typically provide services to its clients in specific categories as other professionals do, such as legal and financial advisors. With the exception of the time that Sitrick has billed or will bill in connection with the preparation of its applications for approval of fees and expenses (none of which time is part of this Interim Fee Application), all of Sitricks services fall with the general category of Corporate Communications Strategy as more specifically set forth herein and in the Interim Fee Statement attached hereto as Exhibit C.

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21.

The professional services and related expenses for which Sitrick requests interim

allowance of compensation and reimbursement of expenses were rendered and incurred in connection with these cases in the discharge of Sitricks professional responsibilities as corporate communications consultants for the Debtors in these Chapter 11 cases. Sitricks services have been necessary and beneficial to the Debtors, their estates, their creditors and other parties in interest. EXPENSES INCURRED 22. Section 330 of the Bankruptcy Code authorizes reimbursement for actual,

necessary expenses incurred by professionals employed in a chapter 11 case. 11 U.S.C. 330(a)(1)(B). Accordingly, Sitrick seeks reimbursement for actual and necessary expenses in the amount of $824.87 which were incurred in rendering services to the Debtors during the Interim Fee Period (the Expenses), as set forth in detail in the Interim Fee Statement. 23. Sitrick has: (a) conducted a review to ensure that the Expenses comply with

section 330(a)(1)(B) of the Bankruptcy Code, Local Rule 2016-1, the Guidelines and other applicable requirements; and (b) eliminated any expenses that it deemed not necessary or otherwise inappropriate. Accordingly, Sitrick has properly requested reimbursement only of actual, necessary and appropriate expenses. Sitrick submits that the Expenses were reasonable and necessary in light of the services provided. OTHER FACTORS IN CONSIDERING APPLICATION 24. The Guidelines suggest a number of factors to consider in evaluating

compensation for professionals that are discussed below: a. Time Spent and Rates Charged:

During the Interim Fee Period, Sitrick spent 56.80 hours representing the Debtors amounting to a fee of $16,808.00 for a blended hourly rate of $295.92 per hour. The rates

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sought for approval herein are Sitricks usual and customary billing rates for the types of services performed and are in accordance with the Retention Application and the Retention Order. b. Whether the Services were Necessary or Beneficial to the Estate:

The Debtors deemed the communication consulting services necessary and requested such services of Sitrick. Sitrick is of the opinion that crisis communications, to key constituents such as employees, customers, vendors and media are critical to preserving the going concern value of a reorganizing debtor. As described above, Sitricks services during the Interim Fee Period were focused responding to hundreds of inquiries from the Debtors suppliers, retirees and other interested parties. Unlike any other professional in the case, Sitricks specialized services were designed to handle these critical communications responsibilities, among others, and therefore, Sitricks services were necessary and beneficial to the estate. Moreover, Sitricks services provided a cost savings in comparison to the performance of the same services by other professionals. c. Whether the Services were Performed Within a Reasonable Time Commensurate with the Complexity, Importance, Nature of the Problem, Issue or Task Addressed:

During the Interim Fee Periods, Sitrick performed its services in an efficient manner and within a reasonable time frame given the nature and importance of the issues addressed. d. Whether Compensation is Reasonable Based on the Customary Compensation Charged by Comparably Skilled Practitioners in NonBankruptcy Cases:

Throughout the course of these Chapter 11 cases, Sitrick has charged for its services in accordance with its ordinary and customary hourly rates in effect on the dates that such services were rendered. These hourly rates are similar to those charged by Sitrick for similar services in

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other bankruptcy and non-bankruptcy matters. CONCLUSION 25. The fees requested herein by Sitrick are based upon Sitricks ordinary and

customary hourly rates applied to services performed for other clients on both bankruptcy and non-bankruptcy related matters during the Interim Fee Period. The expense reimbursements for internal charges requested herein by Sitrick are based upon Sitricks ordinary and customary rates. The expense reimbursements requested herein by Sitrick are based upon the ordinary and customary charges by third parties to Sitrick for other clients on both bankruptcy and nonbankruptcy related matters. 26. In accordance with the factors enumerated in section 330 of the Bankruptcy Code,

it is respectfully submitted that the amounts requested by Sitrick are fair and reasonable given (a) the complexity of these cases, (b) the time expended, (c) the nature and extent of the services rendered, (d) the value of such services, and (e) the costs of comparable services other than in a case under this title. Sitrick has reviewed the requirements of Local Rule 2016-1 and believes that this Interim Fee Application complies with that Rule. 27. Court. No other request for the relief requested herein has been made to this or any other

15

WHEREFORE, Sitrick respectfully requests that the Court enter an order, substantially in the form attached hereto as Exhibit A, (a) approving an interim award of compensation and reimbursement of expenses in the amounts of $16,808.00 and $858.00, respectively, which amounts were incurred during the Interim Fee Period; (b) authorizing the Debtors to pay Sitrick all amounts requested in this Interim Fee Application remaining unpaid; and (c) for such other and further relief as his Court deems proper. Dated: June 14, 2006 New York, New York

SITRICK AND COMPANY, INC.

By: /s/ Steven D. Goldberg Steven D. Goldberg Member of the Firm 655 Third Avenue, 22nd Floor New York, New York 10017 (212) 573-6100

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