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Lessons from Luckin: A Cross-Border Case Study
Luckin Coffee Inc., founded in 2017 by a Chinese entrepreneur, had the goal of outgrowing Starbucks as China’s largest coffee chain. The company’s 2019 IPO and bond offering raised approximately US$900 million. However, in February 2020, it was discovered that Luckin had fabricated its financial statements, with revenue overstated by US$300 million. Litigation followed, with various direct and class action claims being asserted in the U.S., a class action claim in Canada, and injunctive proceedings in both the Cayman Islands and Hong Kong. The principal creditors were unsecured bondholders and equityholders with securities litigation claims. In order to protect Luckin from its creditors, restructuring officers were appointed in the Cayman Islands, and the company’s debt was successfully restructured. This international panel of experts will discuss the case and lessons restructuring professionals can learn from it.
Lessons from Luckin: A Cross-Border Case Study
Luckin Coffee Inc., founded in 2017 by a Chinese entrepreneur, had the goal of outgrowing Starbucks as China’s largest coffee chain. The company’s 2019 IPO and bond offering raised approximately US$900 million. However, in February 2020, it was discovered that Luckin had fabricated its financial statements, with revenue overstated by US$300 million. Litigation followed, with various direct and class action claims being asserted in the U.S., a class action claim in Canada, and injunctive proceedings in both the Cayman Islands and Hong Kong. The principal creditors were unsecured bondholders and equityholders with securities litigation claims. In order to protect Luckin from its creditors, restructuring officers were appointed in the Cayman Islands, and the company’s debt was successfully restructured. This international panel of experts will discuss the case and lessons restructuring professionals can learn from it.
Danger Ahead! Avoiding and Addressing Ethical Landmines in Attorney Engagement and Compensation
This panel will focus on disputes regarding engagement as counsel and payment of fees. The panel will cover such issues as unbundling of services, bifurcated fee arrangements and conflicts of interest. The panelists also will discuss a number of ethical issues that have arisen in recent cases.
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