On Monday, Vizio filed a new motion in U.S. District Court for the Central District of California saying LeEco violated a settlement reached by the two companies last year over the failed merger and said the Chinese technology conglomerate still owed a large sum of money,media reported. LeEco, once seen as “China’s Netflix,” tried to buy Vizio in 2016 for $2 billion.
At the time, LeEco founder Jia Yueting wanted the company to create a complete ecosystem of hardware and software products, LeEco, by moving into hardware such as televisions and smartphones. But Mr Jia’s ambitions have engulfed LeEco, an entrepreneur with billions of dollars in debt.
A year later, the Vizio deal collapsed and the US tv maker sued LeEco for $60m in damages. Vizio said the company had already collapsed when LeEco proposed a merger, and it accused the Chinese company of hiding them in order to close the deal. In November 2018, a settlement was reached, but the terms of the agreement were never disclosed.
Although Vizio accused LeEco of violating the settlement in its latest lawsuit, the terms remain confidential. Vizio’s motion — asking the judge to enforce the settlement agreement and ruling on LeEco — has been significantly updated. Surprisingly, Vizio’s lawyers simply stated in the motion that “LeEco entity partners had defaulted” and that they “owed Vizio a large sum of money”. Vizio’s lawyers say LeEco and its holding companies can and should be forced to abide by the terms of their settlement.
In addition, Vizio’s lawyers also cited Jia Yueting’s filing for bankruptcy protection in the United States as a way to settle billions of dollars in debt owed in China. Since this action takes precedence over any other individual claim against Jia Yueting, Vizio asks the court to enforce the judgment only against LeEco and its holding company.
It is not clear whether LeEco will be able to repay its debt to Vizio. For months, the company has been in danger of de-listing from the Shenzhen Stock Exchange, which has been largely in trouble since Jia Yueting moved to the U.S. in 2017. In the meantime, he spent most of his time saving another company, Faraday Future, the equally troubled electric car start-up, but it didn’t seem to succeed.