Vizio Files $100M Lawsuit Against Le Eco
Vizio has filed a $100 million lawsuit against Le Eco, following a break-down of acquisition talks with the Chinese technology giant earlier this year.
Vizio says that their deal with LeEco included a $100 million buyer-termination fee and that when LeEco reneged on the potential acquisition of Vizio, it offered to set up a joint distribution deal as an alternative.
Vizio say this new arrangement would have seen them paid $40 million up front, another $10 million after the new deal closed and the remaining $50 million to be turned into a capital contribution for the joint venture.
Now, Vizio alleges that LeEco only proposed the deal in order to reduce its liability by 60%, never intending to follow through on the rest of the money, and are taking the Chinese company to court for the original sum.
In their filing, they allege that LeEco’s CEO, SVP of Finance and a director of LeEco’s holding company misled Vizio executives on the health of LeEco’s holding company and planned to “obtain the instant financial stability, credibility, and resources that a merger with Vizio would bring, or at least to create a widespread and dramatic public impression of their own financial health and well-being to grow or continue in business that would come with the announcement of such an intended merger.”
In addition, they say LeEco planned to “try to obtain access to VIZIO’s large corporate customers and key decision makers thereat for their own purposes”.
The news comes following a string of setbacks for the company.
Earlier this week, a Shanghai court froze $180 million in assets belong to the LeEco founder and former CEO, his wife and three LeEco affiliates.
It’s also been reported that the company has issued a pay-freeze for a number of its Chinese workers until August 10th.