U.S. TV maker Vizio files 100 mln lawsuit against LeEco for failed acquisition

Updated 2017-07-14 14:53:08 CGTN

The U.S. based television maker Vizio sued LeEco for not following through on a 2 billion U.S. dollars merger.

The Chinese technology firm announced its intention to purchase Vizio last July with a deal allegedly included a 100 million U.S. dollars buyer-termination fee.

The merger fell through in April amid LeEco's financial problems. The two companies then agreed on a joint distribution deal which would have included LeEco's paying 40 million U.S. dollars to Vizio up front, and 10 million U.S. dollars at the closure of the deal with a remaining 50-million-US-dollar investment in the distributions.

Vizio has renounced the immediate payment recently after LeEco paid off the first 40 million U.S. dollars, alleging that LeEco purposely set up the joint-venture deal in effort to reduce its liability by 60 percent. The U.S. company is now seeking 60 million U.S. dollars in damages through Santa Ana federal court in U.S. State of California.

Vizio claims LeEco intended to use the publicly announced merger deal with VIZIO to "gain or try to obtain access to VIZIO's large corporate customers and key decision makers thereat for their own purposes and by means of confidential customer information that had been developed" and "provide LeEco with access to VIZIO's confidential customer information, including contact information, account history, purchasing needs or requirements, contract terms, and the like."

Meanwhile, the U.S. company has experienced financial crisis for leaking confidential viewing data. In February this year, Vizio was ordered to pay 2.2 million U.S. dollars to settle charges by U.S. Federal Trade Commission and the Office of the New Jersey Attorney General for selling secretly collected user data to the third parties.

LeEco has not commented on the lawsuit thus far.

The lawsuit comes just days after Shangahi court froze 182 million U.S. dollars' worth assets including LeEco stock which belong to the former CEO Jia Yueting, his wife and three LeEco affiliates. This led to even more outstanding payments to LeEco employees.

At the end of last May, Jia resigned as the CEO as the company continued to struggle "regulatory headwinds," cash crunch and bumpiness into the U.S. market. Besides the decision to abandon its plan to acquire Vizio, LeEco also nixed its video service EcoPass in the same month.

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