Wednesday 24 July 2024
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Luckin Coffee enters into binding term sheet to settle U.S. Securities class action

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BEIJING, China — Luckin Coffee Inc. (in Provisional Liquidation) (“Luckin Coffee” or the “Company”) (OTC: LKNCY) today announced that it has entered into a binding term sheet (the “Term Sheet”) with the Lead Plaintiffs in the provisionally certified class action In re Luckin Coffee Inc. Securities Litigation, Case No.1:20-cv-01293-JPC-JLC (SDNY) (the “Class Action”) to fully resolve all claims that have been or could be filed on behalf of a class of purchasers of the Company’s ADS between May 17, 2019 through July 15, 2020, inclusive, that has been certified for settlement purposes.

Pursuant to the Term Sheet, the settlement is subject to entering into definitive documentation and obtaining approvals from the Cayman Court in the first instance (who has oversight of the provisional liquidation proceedings), and the U.S. Court overseeing the Class Action.

The Term Sheet provides that the U.S. Class Action settlement amount will be calculated based on a Global Settlement Amount of $187.5 million, which will be reduced on a pro-rata basis based on the valid opt-out notices received pursuant to the U.S. Court’s prior order approving dissemination of a notice of pendency. The final report of valid opt-out notices received will be provided to the U.S. Court on or before October 8, 2021.

Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee, commented, “Upon final approval, this settlement will resolve a significant contingent liability and enable Luckin Coffee to move forward with a greater focus on our operations and the execution of our strategic plan. We are working diligently to enter into formal settlement agreements and obtain the necessary court approvals.”

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