VIZIO asks for $100MN in LeEco lawsuit | Major Businesses | Business
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TV manufacturer VIZIO has launched a lawsuit against the so-called ‘Netflix of China’, LeEco, alleging that it committed fraud and breaches of agreement after the two companies agreed to merge.

leeco 17 july 2017In a complaint filed in California federal court, VIZIO alleges that after it agreed to a merger with the Chinese company, LeEco lied about its financial stability. The TV company wrote that LeEco’s "far-flung corporate empire had begun to collapse due to their severe cash flow and financial problems, and that [LeEco] 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”.

VIZIO also highlights an alleged "secret plan" to use the merger "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 the confidential customer information that had been developed by VIZIO at substantial cost, time and expense".

LeEco gained access to "confidential customer information, including contact information, account history, purchasing needs or requirements, contract terms, and the like,” the complaint continues.

The suit comes hard on the heels of a decision by a Shanghai court to freeze $182 million in assets controlled by LeEco chairman Jia Yueting over unpaid debts.

The merger fell apart last year, with LeEco subject to a break-up fee of $100 million. The court papers say that LeEco proposed a "joint venture distributorship” in which it would pay VIZIO $40 million, keep $10 million and put the rest into the JV.

VIZIO said that LeEco was "merely engaged in subterfuge to try to reduce their liability" from $100 million to $40 million.

The lawsuit is asking for the $100 million in full along with punitive damages from LeEco.
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