NEW YORK (Reuters) - Luckin Coffee Inc reached a $175 million settlement of shareholder class-action claims that the Chinese rival to Starbucks fraudulently inflated its share price by falsifying revenue. Lawyers for the shareholders called the all-cash settlement, filed on Monday night, an “excellent result,” citing Luckin’s liquidation proceeding in the Cayman Islands and its related filing for protection under the U.S. Bankruptcy Code. The accord also covers Luckin officials, and underwriters of the Xiamen, China-based company’s $645 million initial public offering in 2019 and a later offering of American depositary shares. U.S. District Judge John Cronan in Manhattan approved the preliminary settlement on Tuesday, and scheduled a Jan. 31, 2022 hearing to consider final approval. The settlement also requires approval by a Cayman Islands court. Luckin denied wrongdoing. Its U.S.-based lawyers did not immediately respond to requests for comment. Founded in 2017, Luckin ended March with about 5,000 stores. Shareholders sued Luckin in February 2020, two weeks after short-seller Muddy Waters Research accused it of inflating revenue. Two months later, Luckin’s share price sank 81% after the company said an internal probe found that its chief operating officer and other staff fabricated about $310 million of sales in 2019, or about 40% of annual sales projected by analysts. Luckin agreed last December to pay a $180 million fine to settle U.S. Securities and Exchange Commission accounting fraud civil charges. The SEC said Luckin raised more than $864 million from equity and debt investors while the fraud was taking place. Shareholders in the class action are led by Swedish pension fund Sjunde AP-Fonden and the Louisiana Sheriffs’ Pension & Relief Fund. Their lawyers, led by Kessler Topaz Meltzer & Check and Bernstein Litowitz Berger & Grossmann, may seek fees of up to 25% of the settlement fund. Reporting by Jonathan Stempel; Editing by Andrea Ricci and Steve Orlofsky