As a result, a lender group plans to sell the loan’s collateral: 76.3 million of the coffee bar chain's American depositary shares, Goldman said in a statement.
Luckin said last week that it faked a lot of its sales in 2019.
Based on Monday’s afternoon price, the shares are worth $340 million. At last check the shares were off 17% at $4.45.
Goldman didn’t identify the lenders. A Goldman spokeswoman declined comment on that to The Wall Street Journal. Goldman said it was helping to execute the sale, The Journal reports.
The securities that represent the collateral belonged to Lu and Luckin CEO Jenny Zhiya. The two are co-founders of the company.
From its beginning in 2017, Luckin quickly soared, with more than 4,500 outlets in China, to challenge market leader Starbucks SBUX.
Beijing-based Luckin listed on the Nasdaq in May of last year. Its stock more than tripled from then until Jan. 13.
The shares then went south, falling 91% since then and 88% since the news last week.
Research firm Muddy Waters, which is headed by Carson Block, in late January first alerted investors to allegations at Luckin.
The firm called the company a "fundamentally broken business" that was attempting to "instill the culture of coffee into China through cuttthroat discounts and free giveaways."