Carey Olsen, in conjunction with Quinn Emanuel Urquhart & Sullivan and South Square Chambers, has acted as Cayman Islands counsel to an Ad Hoc Group of bondholders (AHG) in relation to the filing of a scheme of arrangement in the Cayman Islands Grand Court in the ongoing restructuring of Luckin Coffee Inc.
It was announced in March 2021 that the AHG members, who hold the majority of the US$460 million convertible senior notes that Luckin Coffee issued in January 2020, had entered into a restructuring support agreement (“RSA”) with the Chinese coffee chain. As part of the RSA, the restructuring was intended to be implemented by way of a scheme of arrangement in the Cayman Islands Grand Court once certain milestones had been achieved.
The filing of the scheme commences the formal Court process for the implementation of the restructuring of the notes set out in the RSA.
Based on the latest holdings reported to Luckin Coffee, the aggregate principal amount of the existing notes held by the noteholders party to the RSA is well above the voting threshold of 75% in amount that is required to approve a scheme of arrangement under Cayman Islands law.
Luckin Coffee was founded in 2017 and was listed on the Nasdaq in June 2019. In April 2020, the Company announced the discovery of an internal fraud that had inflated its sales revenue by up to US$310 million.
The Carey Olsen team comprised partner Jan Golaszewski, senior associates Tim Baildam and Jenna Willis, and associate Jasmin Davies.
Daniel Bayfield QC guided South Square Chambers.
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