Beijing (PingWest)- The Chinese coffee chain Luckin Coffee has filed for bankruptcy protection in the U.S, ten months after it announced hundreds of million of dollar of sales had been fabricated.
Luckin coffee, which was once regarded as China’s biggest rival to Starbucks, sought chapter 15 petition to allow a financial restructuring.
In a statement published on its Weibo account, the company said the financial restructuring was not expected to affect its day to day operation, and “ its is a good news for the company as the bankruptcy application could delay lawsuits against us and create condition for us to complete restructuring in the Cayman Islands.
Founded in 2017, Luckin coffee made its debut on Nasdaq in New York in 2019, shocked Wall Street after its accounting scandal exposed and its stock was delisted from Nasdaq as a result.
A internal investigation concluded that net revenue last year was inflated by about CNY2.12 billion (USD418.5 million) while costs and expenses were boosted by CNY1.34 billion. After the conclusion of the investigation, a majority of directors had ousted Luckin’s founder Lu Zhenegyao from the board.
The Securities and Exchange Commission in December last year fined Luckin for USD180m penalty after finding it had set up a fake database as part of an effort to fabricate its accounts.