Plaintiff accuses textile supplier of unjust enrichment over disputed payment

A legal battle has erupted over a substantial financial dispute involving two major companies in the textile and apparel industry. On November 11, 2025, Ariat International, Inc., a California-based corporation, filed a complaint against Cone Denim LLC in the United States District Court for the Western District of North Carolina. The case revolves around funds that Ariat claims Cone Denim is wrongfully withholding.

Ariat International, known for its western clothing line including denim products, alleges that Cone Denim LLC is unjustly retaining $1,000,000 paid by Ariat. This payment was made under pressure to ensure continued supply of denim fabric from Cone to ADN Jeans Group LLC and Rio Sul SA de CV (collectively referred to as “ADN”), who manufacture clothing for Ariat. The situation arose when ADN fell behind on payments to Cone for denim fabric due to financial struggles starting in 2022. By early 2023, ADN owed at least $3 million to Cone, disrupting production of Ariat’s orders.

Faced with potential supply chain disruptions, Ariat entered negotiations with Cone and agreed to make a direct payment of $1 million to settle part of ADN’s debt. This agreement was supposed to credit amounts owed by Ariat to ADN. However, ExpoCredit LLC later claimed rights over these accounts receivable through a UCC-1 filing statement and initiated legal proceedings against Ariat in Florida state court.

In response, Ariat brought a third-party complaint against several entities including Cone in the Florida case but eventually settled with them regarding funds unrelated to the disputed payment. Despite these developments, ExpoCredit’s claim remains unresolved and has been moved to arbitration while the current lawsuit seeks restitution from Cone.

Ariat argues that it acted under duress from Cone’s threats to halt shipments crucial for its business operations. The company asserts that it should not be compelled to pay twice for the same debt—once directly to Cone and potentially again to ExpoCredit—especially since it received assurances from ADN about crediting this payment towards its obligations.

The plaintiff accuses Cone of unjust enrichment by retaining funds that were intended as settlement credits between Ariat and ADN without acknowledging ExpoCredit’s claim over those receivables. They argue this retention is inequitable given the circumstances and seek compensatory damages along with legal costs as relief from the court.

Representing Ariat International is attorney Kristen P. Watson from Burr & Forman LLP based in Birmingham, Alabama. The case is being heard under Case No. 3:25-cv-899 before an unnamed judge at this stage.