In less than a year after the company admitted to fabricating millions of dollars in sales, Luckin Coffee has now filed for bankruptcy in the US.

According to the statement released by company officials who have filed Chapter 15 bankruptcy, the move will help to financially restructure and strengthen its balance sheet.  This type of filing shelters the US assets of foreign companies undergoing restructuring proceedings in their home country.  Officials also stated that bankruptcy won’t materially impact Luckin’s day-to-day operations and its roughly 3,600 cafes will remain open.

Last April 2020 news broke out about its Chief Operating Officer Jian Lu and his direct reports had engaged in misconduct that include fabricating sales transactions beginning in 2019 amounting to about $310 million.

Following the misconduct, COO Lu and CEO Jenny Zhiya Qian were both fired in May 2020. Luckin stock was also delisted on the Nasdaq exchange and the Securities and Exchange Commission slapped the company with a $180 million penalty to settle fraud charges.

Luckin went public in 2019.  It is now looking bleak for this company who was once hailed as the homegrown rival to Starbucks in China.