×
You will be redirected back to your article in seconds

Vizio Files $75 Million Lawsuit Against LeEco for Busted Merger

Vizio filed a $75 million lawsuit against LeEco on Tuesday, alleging that the faltering Chinese electronics manufacturer never had the money to close a $2 billion deal.

LeEco announced the plan to acquire Vizio last July, as part of an ambitious effort to expand into North America. The deal was officially scrapped in April. At the time, both sides cited “regulatory headwinds” in China as the principal cause of the deal’s collapse.

However, in its lawsuit filed in U.S. District Court in Santa Ana, Calif., Vizio now contends that LeEco had already “begun to collapse due to their severe cash flow and financial problems” at the time the deal was announced last year. Vizio alleges that LeEco pursued the deal as part of a “secret plan” to create a false impression of financial health, and in an effort to obtain access to Vizio’s corporate clients and private customer information.

The lawsuit also alleges that LeEco has violated the terms of the acquisition agreement by failing to pay the full $100 million termination fee. Vizio has received just $40 million so far, the suit claims.

The suit contends that LeEco pursued the acquisition because it “desperately needed to either 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.”

LeEco is under growing financial strain, with a court in China recently freezing some of its assets in a dispute with creditors, according to Reuters.

Following the breakup of the deal in April, LeEco and Vizio announced that they would pursue a joint venture whereby LeEco would distribute Vizio products in China, and Vizio would make LeEco apps available on its platform. That deal now appears to be dead, as Vizio says its efforts to make good on the arrangement “were met with practical radio silence.” Vizio now accuses LeEco of using the joint venture as an elaborate subterfuge to avoid paying the full $100 million termination fee.

Vizio may find it difficult to collect any judgment against LeEco, which is headquartered in Beijing. So Vizio has filed a separate $50 million claim in Orange County Superior Court against Le Technology, a California subsidiary of LeEco. The state court complaint repeats the claims in the federal suit nearly verbatim.

More Biz

  • Colin Kaepernick Kneel

    Colin Kaepernick, Eric Reid Reach Settlement With NFL

    Colin Kaepernick and Eric Reid, two football players who alleged the National Football League colluded to oust them from the game after they started kneeling in protest of racial inequality during the playing of the national anthem, have reached a settlement in the matter, according to a statement from the sports organization and lawyers representing [...]

  • R. Kelly

    R. Kelly Could Be in ‘Big Trouble’ Over Alleged New Sex Tape, Attorney Says

    Strong allegations of sexual misconduct have followed R. Kelly for 25 years, but the singer has always managed to slip free. Yet reports that a videotape of him sexually assaulting an underage girl, combined with the outcry surrounding the Lifetime documentary “Surviving R. Kelly,” means that public sentiment, at the very least, is definitely not [...]

  • Christian Bale as Dick Cheney in

    New Media Residuals and Feature Films Contribute to Spike in Writers' Pay

    The outlook for members of the Writers Guild of America has brightened — even amid pervasive uncertainty in the entertainment industry. According to the most recent report to WGA West members, earnings surged 2.8% to $1.41 billion in 2017, thanks mostly to gains in feature films and new-media residuals. Total covered earnings for WGA West [...]

  • Joe Dante Gremlins

    Hollywood Execs Seek Licensing Deals at the New York Toy Fair

    On Feb. 16 more than 30,000 studio executives, buyers and toy company reps will gather in Manhattan for the annual Toy Fair New York, all vying for market share and trying to snag the latest hot trend in a fast-changing industry. Those working the film side of the business will focus much of their attention [...]

  • Lady Gaga Bradley Cooper A Star

    Universal Music Group Fuels 11.3% Rise in Vivendi's 2018 Revenues

    Vivendi’s revenues were up 11.3% to €13.93 billion ($15.7 billion) in 2018, powered by Universal Music Group, which delivered such hits as the “A Star Is Born” soundtrack and Drake’s new album. UMG’s revenues climbed by 10% to €6 billion ($6.8 billion) compared to 2017. On top of the “A Star Is Born” soundtrack, the [...]

  • The Blacklist 100th Episode

    'The Blacklist' EP Sues for Wrongful Termination

    A former executive producer of the NBC show “The Blacklist” has filed suit against Sony, alleging he was fired after being wrongfully blamed for a workplace scuffle. Michael Watkins is a veteran TV director and cinematographer. He was an executive producer for several seasons of “The Blacklist,” the NBC crime show starring James Spader. According [...]

  • TV set livingroom

    Studios Sue Omniverse in TV Streaming Crackdown

    The major studios filed a copyright infringement suit against Omniverse One World Television on Thursday, as they continue to crack down on illicit streaming services. Omniverse provides packages of TV channels to various streaming providers, including SkyStream TV, Flixon TV, and HD Homerun. Jason DeMeo, the head of the company, asserted in an interview with [...]

More From Our Brands

Access exclusive content