'Chinese Starbucks' Luckin Coffee Files for Bankruptcy Protection in US Court

[Image source=AP Yonhap News]

[Asia Economy Reporter Moon Jiwon] Chinese Luckin Coffee, which once boldly claimed it would surpass the world's largest coffee chain Starbucks, has filed for bankruptcy protection in a U.S. court, AFP reported on the 5th (local time).

According to the report, Luckin Coffee stated, "We are negotiating with stakeholders regarding the company's financial restructuring."

In this regard, Bloomberg reported that this move is intended to protect the company from lawsuits by U.S. creditors.

Luckin Coffee explained, "(The bankruptcy protection filing) will not affect the daily operations of stores, and employee salaries and payments for goods will continue to be made."

Founded in 2017, Luckin Coffee rapidly grew and was even listed on the U.S. Nasdaq in May 2019. However, after accounting fraud involving inflated sales figures was revealed in April last year, it was delisted from Nasdaq in June of the same year.

The U.S. Securities and Exchange Commission (SEC) also imposed a fine of $180 million (approximately 202.2 billion KRW) on Luckin Coffee in December last year.

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