Controversy-riddled Chinese coffee chain Luckin Coffee announced on Monday that a petition to wind up the embattled group had been dismissed, after it came to an agreement with creditors to restructure $460 million in debt, reports Caixin. The erstwhile Starbucks China challenger said the Grand Court of the Cayman Islands had called off provisional liquidators, who were appointed in July 2020 after the petition was filed.
Courts appoint provisional liquidators to maintain the status quo at a company after a winding up petition is signed, for instance to stop its assets being squirreled away before a formal court-ordered liquidation. Luckin said the court’s decision came after it reached a deal with its creditors to restructure the debt—in 0.75% convertible senior notes due 2025—which was recognized by the US Bankruptcy Court for the Southern District of New York.
Luckin has been trying to put the RMB 2.2 billion ($348.7 million) financial fraud scandal revealed in 2020 in its rearview mirror, as it prepares to seek a US relisting.