DJ China's Luckin Coffee Files for Bankruptcy Protection in U.S.
Luckin Coffee Inc. on Friday filed for Chapter 15 bankruptcy protection in the U.S., a move that comes less than two months after the troubled Chinese coffee chain agreed to pay fines to settle U.S. regulatory claims that it fabricated hundreds of millions of dollars in sales.
The filing will shield the Chinese coffee company from U.S. creditors as it seeks to restructure its business and strengthen its balance sheet. All of its stores remain open for business, Luckin said in a statement, adding that the bankruptcy filing won't materially affect the company's day-to-day operations.
The filing comes after Luckin, once a highflying competitor to Starbucks Corp. in China, late last year agreed to pay $180 million to settle U.S. regulatory claims that it cooked its books to make growth appear more robust and meet earnings targets.
Luckin has neither admitted nor denied the fraud claims by the Securities and Exchange Commission.
The company went public on the Nasdaq Stock Market in 2019 after raising $651 million. Its disclosure of financial-reporting failures last year caused shares to plummet 75%.
The debacle put a spotlight on U.S. regulators' inability to inspect the audits of American-listed Chinese companies, a compliance gap that gained attention in Congress last year.
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(END) Dow Jones Newswires
February 05, 2021 06:40 ET (11:40 GMT)
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