A Vizio TV screen. Photo by kennejima via Flickr
Irvine-based Vizio Inc. has filed two lawsuits against LeEco Inc. over the Chinese technology conglomerate failure to pull off a $2 billion acquisition of the U.S. television maker.
Vizio is perhaps known best for offering low-cost big-screen TVs at Costco discount warehouse stores.
In a suit filed in U.S. District Court in Santa Ana Tuesday, Vizio seeks $60 million in damages, claiming LeEco paid only $40 million of a $100 million termination fee and didn’t live up to its end of a joint-venture agreement the companies struck after the failed merger, the Orange County Register reported Thursday.
After the merger fell through in April, the companies agreed to set up a venture to sell Vizio’s products in China through LeEco distribution, according to Vizio.
Vizio renounced immediate payment of the termination fee on the condition it would receive $40 million initially, plus $10 million at a later point, and Beijing-based LeEco would invest $50 million in their joint venture, the complaint says.
When Vizio tried to work out further terms of the framework agreement, it was met with 途adio silence, the company said, according to the Register. LeEco used the proposed joint venture as a subterfuge to escape the $100 million liability, according to Vizio.
Another suit filed in state Superior Court for the County of Orange seeks $50 million and claims that while negotiating to buy Vizio, LeCo executives were hiding severe cash flow and financial problems and that LeCo was desperate to obtain the instant financial stability, credibility and resources that a merger with Vizio would bring, The Register reported.
Representatives of LeEco didn’t immediately respond to a Register request for comment on the lawsuits.
—City News Service
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