Luckin Coffee Inc. settled $175 million of shareholder class-action claims earlier this week. According to a report by Reuters, lawyers for the shareholders termed the all-cash settlement, filed on Monday night, an "excellent result."
Lawyers cited Luckin's liquidation proceeding in the Cayman Islands and its related filing for protection under the U.S. Bankruptcy Code. Earlier this year, it was revealed that Luckin Coffee, described as the Chinese rival to Starbucks, had fraudulently inflated its share price by falsifying revenue.
The agreement reached this week also covers Luckin officials, and underwriters of the Xiamen, China-based company's $645 million IPO in 2019, as well as a later offering of American depositary shares, Reuters reported.
While the preliminary settlement was approved in a Manhattan court on Tuesday, final approval will be considered at a hearing on Jan. 31. The settlement also requires approval by a Cayman Islands court, Reuters said.