NEW YORK — A disagreement over the terms of a polyester filament "manufacturing alliance" between DuPont and Unifi Inc. has led DuPont to seek $85 million in compensation through an arbitration hearing, Unifi disclosed late Monday. The hearing is scheduled to begin next month.

A spokeswoman for Wilmington, Del.-based DuPont confirmed that her company brought the matter to an arbiter in February, and did not dispute the $85 million figure. Under the terms of the agreement reached in 2000, DuPont and Unifi agreed to co-manage DuPont’s "partially oriented yarn" plants in Kinston and Wilmington, N.C. and Unifi’s in Yadkinville, N.C.

The goal was that, while demand for U.S.-produced POY was on the wane, the companies could share their manufacturing capacity and run their facilities at or close to their full capacities, which improves margins. DuPont last year closed its Wilmington, N.C., plant for that product.

DuPont’s contention was that, until the plants covered by the alliance were running at full capacity, Unifi was obligated to buy all the POY it needed, but couldn’t produce on its own, from DuPont.

Unifi in a statement said it "does not agree that it was or is obligated to purchase these volumes of POY from DuPont." The Greensboro, N.C.-based company, which also buys POY from Nan Ya Plastics Corp. and Reliance Industries, added it "believes that the prices would have paid DuPont for such POY purchases that would have been at or below the prices it actually paid."

The DuPont spokeswoman said Tuesday, "We’ve gone to arbitration because they have one view of what their obligation is under the alliance and we have a differing view."

However, she added, "The day-to-day operations of the alliance and the manufacturing assets and the running of those has continued."

While the dispute focuses on whether Unifi was obligated to buy a certain amount of POY from DuPont, a recent Securities and Exchange Commission filing shows there may be another disagreement.

As reported, the manufacturing alliance agreement included a put-call provision, which would have made it possible for DuPont to sell its POY plants to Unifi if the alliance was broken, or at any time after June 1, 2005.In a joint statement issued in July 2000, Unifi and DuPont said the arrangement meant: "Unifi has the option to purchase from DuPont and DuPont has the option to sell to Unifi DuPont’s U.S. polyester filament business. If Unifi exercises its option, DuPont is obligated to sell the business to Unifi and, if DuPont exercises its option, Unifi is obligated to buy the business from DuPont."

The agreement valued DuPont’s factories at between $300 million and $600 million. It also held open the option that DuPont could buy Unifi’s Yadkinville plant. At a time when DuPont was beginning to move most of its polyester businesses out of direct corporate ownership, DuPont executives said it was unlikely they’d choose to buy Unifi’s plant.

However, in its 10K filed with the SEC Sept. 23, Unifi said the arrangement meant: "DuPont has the right but not the obligation to sell to Unifi (a ‘put’) and Unifi has the right but not the obligation to purchase from DuPont (a ‘call’), DuPont’s U.S. polyester filament business."

That explanation of the terms of the agreement differs from the one Unifi offered in previous SEC filings. The words "not the obligation" are new.

Willis Moore, Unifi’s executive vice president and chief financial officer, said the changes in the description of the agreement were intended "only to try to clarify it." He added that the alliance is "doing well."

The DuPont spokeswoman said her company understood the put-call arrangement to mean that if DuPont elected to sell the properties in question, or if Unifi wanted to buy them, the other party would not have the right of refusal.

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