(Yicai Global) April 12 -- Luckin Coffee, which was fined USD180 million by US regulators in December 2020 for faking sales, has successfully emerged from bankruptcy proceedings and is no longer classified as a debtor, the Chinese coffee chain operator said yesterday.

"Today marks a new beginning for Luckin Coffee," said Chairman and Chief Executive Officer Guo Jinyi.

The largest coffee chain in China, which runs more than 6,000 outlets, has been discharged from the US Chapter 15 insolvency code, and as such has fully resolved its legal issues and will return to normal operations, the firm said.

"Luckin Coffee utilized the Chapter 15 process to effectuate the restructuring of its financial indebtedness in the US,” Guo said. “As we have emerged from this process successfully with the support of our creditors, we are confident that Luckin Coffee is well-positioned for long-term growth and creation of stakeholder value."

Luckin Coffee was brought low by a short seller’s report in January 2020 that accused it of fraud. It has since confessed to inflating its 2019 revenue by as much as CNY2.1 billion (USD332.8 million) and its costs and expenses by CNY1.3 billion. It was expelled from the Nasdaq in June that year, ending a 400-day listing.

To save itself, the Xiamen, southeastern Fujian province-based company filed for Chapter 15 bankruptcy in New York in February last year to create favorable conditions for its restructuring. Last September, it said it had reached a deal with lead plaintiffs and had settled a USD187 million class action lawsuit. With the debt restructuring completed, the coffee chain applied for bankruptcy discharge last month.

Despite the financial crisis, the company continued operating as usual. Its operating losses narrowed by nearly 80 percent last year from the year before to CNY539.1 million (USD84.6 million) and revenue almost doubled to CNY8 billion (USD1.2 billion).

Editor: Kim Taylor