LUCKIN COFFEE files for Chapter 15 Bankruptcy $LKNCY 瑞幸咖啡
~~~ Further Reading ~~~\nhttps://www.shumaker.com/Templates/media/files/pdf/news/publications/7newsletter-chapter-15-and-cross-border-insolvency_x.pdf\nhttps://www.perkinscoie.com/en/news-insights/why-chinese-companies-file-chapter-15-cases-in-us-bankruptcy-courts.html\nhttps://www.bloomberg.com/news/articles/2021-02-05/luckin-coffee-files-for-chapter-15-bankruptcy-in-new-york-kks1k2hv?srnd=markets-vp\nhttps://investor.luckincoffee.com/news-releases/news-release-details/luckin-coffees-restructuring-efforts-move-forward-commencement
Luckin Coffee files for bankruptcy in the USA
Luckin Coffee, once billed by Chinese rival Starbucks, filed for bankruptcy in the United States less than a year after the company admitted that its millions of dollars in sales were fabricated..
In a statement explaining the reason for filing under Chapter 15 asset protection in bankruptcy proceedings, Luckin Coffee said the move would help the company financially restructure itself and strengthen its balance sheet. This type of procedure protects US assets of foreign companies undergoing restructuring in their home country..
According to the report, bankruptcy will not render «significant impact» to Luckin’s day to day activities, and its around 3,600 cafes will remain open.
This step completes the hard for the company a year. Last April it became known that the former chief operating officer of Luckin Coffee Inc. Jian Liu (Jian Liu) and several of his direct reports «committed certain illegal actions, including fabricating certain transactions», starting in 2019, worth about $ 310 million.
Lu and CEO Jenny Chia Qian (Jenny Zhiya Qian) were fired in May 2020. A few months later, the company’s shares were delisted from the Nasdaq listing..
In December, the US Securities and Exchange Commission (SEC) fined the company $ 180 million to settle fraud charges..
Luckin went public in 2019 and has grown sharply due to strong sales growth. Investors bought stock, betting the chain would become a legitimate competitor to Starbucks, which generates a significant chunk of its revenue from Chinese consumers..