(Reuters) – Luckin Coffee Inc.'s shareholders asked a US judge to approve a $ 175 million settlement for the class action lawsuit that the Chinese rival to Starbucks fraudulently inflated its share price by falsifying revenue. The cash settlement filed an "excellent result" on Monday night, citing Luckin's liquidation proceedings in the Cayman Islands and its related application for protection under the US Bankruptcy Code.
of U.S. custodian shares.
Luckin denied wrongdoing when he agreed to settle. Its US-based lawyer did not immediately respond to requests for comment on Tuesday.
The Xiamen, China-based company, founded in 2017, closed in March with about 5,000 stores.
Shareholders sued Luckin in February 2020, two weeks after shortseller Muddy Waters Research accused it of inflating revenue.
Two months later, Luckin's share price fell 81
Luckin agreed to pay $ 180 million in fines to settle civil charges for accounting fraud from the US Securities and Exchange Commission.
The SEC said Luckin collected more than 864 million dollars from equity. and debt investors while the fraud was going on.
Monday's settlement requires the approval of U.S. District Judge John Cronan in Manhattan and a court in the Cayman Islands.
Their attorneys, led by Kessler Topaz Meltzer & Check and Bernstein Litowitz Berger & Grossmann, can claim a fee of up to 25% of the settlement fund.