Answer of Nominal Defendant International Textile Group, Inc.

STATE OF SOUTH CAROLINA

COUNTY OF GREENVILLE

In re International Textile Group Merger Litigation

) ) IN THE COURT OF COMMON PLEAS ) ) ) C.A. No. 2009-CP-23-3346 )

ANSWER OF NOMINAL DEFENDANT INTERNATIONAL TEXTILE GROUP, INC., TO FIRST AMENDED CONSOLIDATED COMPLAINT

Nominal Defendant International Textile Group, Inc., ("NITG" or "combined company")

answers Plaintiffs' Consolidated Amended Complaint ("Complaint") as follows.

PRELIMINARY STATEMENT

NITG is not a party to any of the direct claims alleged in the Complaint. It is merely a

nominal party to the derivative claims, and the Complaint does not allege any acts or omissions

giving rise to liability against NITG. Accordingly, NITG responds to the Complaint primarily

with general denials so as to preserve Plaintiffs' obligation to prove all allegations not admitted

by Defendants. In addition to such general denials, NITG submits this Answer for the purpose of

articulating and preserving its position regarding matters on which a nominal party in a

shareholder derivative action is entitled to be heard. Swenson v. Thibaut, 250 S.E.2d 279, 293-

94 (N.C. App. 1978).

FIRST DEFENSE

NITG answers the Complaint upon its knowledge and otherwise upon information and

belief, and responds to the individually numbered paragraphs as follows.

1. As a nominal party, NITG generally denies the factual allegations asserted against

other parties, and therefore denies the allegations of Paragraphs 1 through 11.

2. The allegations of Paragraphs 12 through 18 contain representations as to the text

or holdings of certain legal authorities. Such authorities speak for themselves. To the extent an

answer is required, NITG denies such allegations.



4. With respect to the allegations of Paragraph 600, NITG admits that Plaintiffs

(other than the Asiafs) purport to bring this action as a shareholder derivative action, but denies

that they have standing to do so.



6. NITG denies the allegations in Paragraph 603.

7. NITG admits the allegations in Paragraph 604.


other parties, and therefore denies the allegations of Paragraph 605 and 606.

9. The allegations of Paragraph 607 contain representations as to the text or holdings

of certain legal authorities. Such authorities speak for themselves. To the extent an answer is

required, NITG denies such allegations.



11. The allegations of Paragraphs 612 through 615 contain representations as to the

text or holdings of certain legal authorities. Such authorities speak for themselves. To the extent

an answer is required, NITG denies such allegations.

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12. As a nominal pm1y, NITG generally denies the factual allegations asserted against


13. With respect to Plaintiffs' "PRAYER FOR RELIEF," NITG denies that Plaintiffs

are entitled to any relief individually, and expressly asserts that any recovery in this action

should accrue solely to NITG as an entity. NITG further denies that Plaintiffs are entitled to any

attorneys' fees, costs or other litigation expenses with respect to the derivative claims. NITG

denies that Plaintiffs are entitled to "judicial dissolution."

14. NITG denies that Plaintiffs are entitled to a trial by jury on any of the claims

asserted in the Complaint.

15. NITG generally denies any and all allegations not specifically admitted or denied

herein.

SECOND DEFENSE

16. Plaintiff Menezes' claims are barred in whole or in part because they were

released by a settlement agreement on September 28, 2006. All of the claims Plaintiff Menezes

asserts in this lawsuit arose or accrued before Plaintiff signed the release.

THIRD DEFENSE

17. Plaintiff Menezes' claims are barred in whole or in part because there has been an

accord and satisfaction. Plaintiff entered into a settlement agreement in satisfaction of disputes

with SCI, including disputes that were based upon or as an owner of any stock or interest, and he

accepted compensation to settle those disputes.

FOURTH DEFENSE

18. Plaintiffs' claims are barred in whole or in part by the doctrines of estoppel,

waiver, acquiescence, and/or ratification. Plaintiffs were aware of the claims asserted in this

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lawsuit and, on information and belief, approved, acquiesced to andlor failed to object to the

merger at issue in his lawsuit.

FIFTH DEFENSE

19. Plaintiffs' claims are barred because they failed to make a demand on the Board

of Directors of NITG and failed to meet the other procedural and substantive requirements for a

derivative action under applicable law.

SIXTH DEFENSE

20. Plaintiffs' claims are barred in whole or in part by Article VII of the Amended

and Restated Certificate of Incorporation of International Textile Group, Inc. (fJkja Safety

Components International, Inc.) and by principles of eXCUlpation under Delaware law. More

specifically, Article VII provides that "no Director of the Corporation will be personally liable to

the Corporation or its stockholders for or with respect to any acts or omissions in the

performance of his or her duties as a Director of the Corporation."

SEVENTH DEFENSE

21. Plaintiffs' claims are barred in whole or in part because they lack standing and are

inadequate representatives for this action.

EIGHTH DEFENSE

22. Plaintiffs' claims are barred in whole or in part because they were claims related

to those asserted in the lawsuit captioned Menezes v. SCI, et. al. (C.A. No.: 2006-CP-23-4236),

that were expressly dismissed on September 29, 2006, "with prejudice and are hereby res

judicata."

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NINTH DEFENSE

23. Plaintiffs cannot maintain a derivative action on behalf of SCI as a corporate

entity because SCI no longer has any corporate identity distinct from NITG.

TENTH DEFENSE

24. NITG hereby gives notice that it intends to rely upon such other and further

grounds for seeking dismissal of this action as may become available or apparent during pretrial

proceedings in this action and hereby reserves all rights to amend this Answer and to assert all

such additional arguments and claims.

WHEREFORE, NITG respectfully requests the following relief:

A) To the extent any recovery is obtained by any Plaintiff on any claim or cause of

action asserted in this case, for such recovery to be paid exclusively to NITG;

B) For an award in favor ofNITG and against Plaintiffs for the costs and attorneys'

fees incurred by NITG in participating in this action; and

C) For such other and further relief as the Court deems just and proper.

[SIGNATURE PAGE FOLLOWS]

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Dated this the 8th day of November, 2011.

11174424.1 (OGLETREE)

Respectfully submitted,

OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.e.

300 N. Main Street (29601) Post Office Box 2757 Greenville, SC 29602 Telephone: 864.271.1300 Facsimile: 864.235.4754

Attorneys for Defendant International Textile Group, Inc.

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STATE OF SOUTH CAROLINA

COUNTY OF GREENVILLE

In re International Textile Group Merger Litigation

) ) IN THE COURT OF COMMON PLEAS ) ) ) c.A. No. 2009-CP-23-3346 )

CERTIFICATE OF SERVICE

I do hereby certify that I have this day served a copy of the foregoing Answer of Nominal

Defendant International Textile Group, Inc., to First Amended Consolidated Complaint in the

above-referenced case upon the following person(s) by electronic mail:

William D. Herlong, Esq. [email protected]

Thomas L. Stephenson, Esq. [email protected]

Russell T. Burke, Esq. [email protected]

Christopher D. King, Esq. [email protected]

H. Sam Mabry, ill, Esq. [email protected]

J.D. Quattlebaum, Esq. [email protected]

W. Howard Boyd, Jr., Esq. [email protected]

Dated this the 8th day of November, 2011.

Michael J. McConnell, Esq. [email protected]

Mark Weintraub, Esq. [email protected]

Joshua M. Dickman, Esq. [email protected]

Jean-Paul Boulee, Esq. [email protected]

Arthur D. Felsenfeld, Esq. [email protected]

Cassandra L. Porsch, Esq. [email protected]

Mason A. Goldsmith, Esq. [email protected]

Jeffrey P. Dunlaevy, Esq.

Answer of Nominal Defendant International Textile Group, Inc.

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