Luckin Coffee Investors Work Toward Stock Suit Settlement
Dean Seal, 08 March 2021
Luckin Coffee and a proposed class of its investors told a New York federal judge that they are working toward a potential resolution of claims that the Chinese coffee chain used “sham transactions” to fake hundreds of millions of dollars in sales.
The parties received approval on Friday from U.S. District Judge John P. Cronan for certification of a settlement class of investors who acquired Luckin securities between its initial public offering in May 2019 and July 2020, when a Cayman Islands court appointed joint provisional liquidators to oversee Luckin’s operations and negotiate with its creditors.
Counsel for the investors said in a letter to Judge Cronan last week that the liquidators had recently been in touch about resolving the putative class action’s claims, and that both sides believed provisional certification of an investor class “will enable these discussions to proceed further.”
“Having the class certified will provide lead plaintiffs and Luckin with the clarity they need to resolve these claims with the joint provisional liquidators,” the letter said. “Class certification will not prejudice any party.”
