Credit Suisse targets Luckin Coffee ex-billionaire’s family assets to recoup losses after stock toast

Swiss bank seeks court order to appoint liquidators to chairman Lu Zhengyao’s offshore family trust

Credit Suisse is facility agent for a US$500 million-odd loan to the ex-billionaire, backed by Luckin Coffee shares

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Lu Zhengyao at Nasdaq soon after its US stock debut. Much of his family wealth has evaporated following the accounting scandal. Photo: finance.china.com.cn

Published: 4:15pm, 22 May 2020Updated: 4:16pm, 22 May 2020

Lenders led by Credit Suisse are targeting the family assets of Luckin Coffee chairman Lu Zhengyao as they try to recoup losses on more than US$500 million (HK$3.9 billion) in margin loans that soured after the company became embroiled in an accounting scandal.

The Swiss bank is seeking a court order to appoint liquidators for Haode Investment Inc., according to a notice posted in the BVI Gazette on Thursday. Haode, controlled by Lu’s family trust, defaulted on a loan facility backed by Luckin shares, according to a statement from lenders in early April.

The bank, which is acting as an agent for the loan facility, filed the liquidation request to the Eastern Caribbean Supreme Court, High Court of Justice, in the British Virgin Islands on April 23, according to the BVI Gazette notice. A hearing is schedule for June 8.

Lu’s investment vehicle has disputed that it is in default and has requested an injunction against Credit Suisse in Hong Kong to prevent the bank from commencing liquidation proceedings.

Spokespeople for Credit Suisse and Luckin declined to comment.

Pedestrians walk past a Luckin Coffee Inc. outlet in the Qianmen area of Beijing on May 20. Photo: Bloomberg