The TV manufacturer alleges LeEco concocted a "secret plan" to create a false impression it was financially healthy and to steal information about customers.

In a new lawsuit that is dripping with the potential for diplomatic intrigue, American TV manufacturing giant Vizio is suing China's LeEco after a merger between the two companies was called off in April.

The complaint, alleging fraud and breaches of agreement, comes days after a Shanghai court froze $182 million in assets controlled by LeEco chairman Jia Yueting over unpaid debts. LeEco, once dubbed the "Netflix of China" and with a film studio subsidiary co-producing Matt Damon's The Great Wall, is now facing allegations that it covered up its true financial state.

In a complaint filed in California federal court, Vizio alleges that when it entered into merger negotiations in December 2015, culminating in a deal in July 2016, the Chinese company'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."

Besides the allegation that LeEco wanted to create a false impression about its financial health, the Chinese company is also being accused of concocting a "secret plan" to leverage 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."

What's more, given the privacy sensitivities highlighted here, Vizio claims being induced into giving up access to "confidential customer information, including contact information, account history, purchasing needs or requirements, contract terms, and the like."

At the time the merger was called off, Chinese regulatory hurdles were cited as one of the major reasons the marriage failed.

The court papers (read here) discuss a $100 million break-up fee.

According to Vizio, LeEco proposed shortly after a termination notice went out about the merger that the two companies could form a "joint venture distributorship."

LeEco allegedly wanted to take $40 million of the $50 million in escrow and pay it to Vizio with the remaining money released after execution of the joint venture agreement. As for the other $50 million from the break-up fee, LeEco is said to have promised to turn that into a capital contribution to the joint venture that would benefit Vizio.

Vizio claims that the promises were false and the intent was to induce Vizio to terminate the agreement and forgo the full $100 million. It claims that LeEco was "merely engaged in subterfuge to try to reduce their liability" from $100 million to $40 million.

Represented by attorneys at Ervin Cohen & Jessup, Vizio is now looking for the full $100 million and also demands punitive damages.

We'll add comment from LeEco once that comes.