Hong Kong-based sourcing titan Li & Fung Ltd. has sued New York-based apparel supplier Contemporary Streetwear LLC for upwards of $5 million.

This story first appeared in the April 1, 2011 issue of WWD. Subscribe Today.

The suit, filed in the Southern District of New York, alleged that between 2009 and 2011, Contemporary Streetwear breached its contract to pay Li & Fung for a series of apparel orders it made for the company.

Acting as Contemporary Streetwear’s buying agent, Li & Fung said the retailer has “refused to pay” the invoices and has also “indicated no intent to pay” the invoices that are “outstanding but have not yet become due.”

The lawsuit said between last October and this February, Li & Fung ordered and delivered $1.7 million of apparel for the retailer, but no part of the sum has been paid.

Li & Fung also referenced a deal meant to “induce” it to remain the retailer’s primary buying agent. According to the complaint, the contract stipulated that Contemporary Streetwear would “assume the obligations” of its licensee Icer Brands, also known as Cavi Juniors, if Li & Fung dropped its claims against Icer. After releasing the claims, Contemporary said it would pay $48,000 for sample charges, take possession of Icer’s inventory worth “at least $94,307.50,” and sell it in order to pay the Hong Kong firm, but according to the lawsuit, the defendant never sent Li & Fung any of proceeds related to the sale of the inventory.

“Our attorney is answering the complaint, but we are in the process of working on a settlement” with Li & Fung, said Contemporary Streetwear president Danny Schlesinger.

Not including interest or other costs, Li & Fung is looking for damages of $5.1 million.

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