Rite Aid Files for Bankruptcy
US pharmacy chain Rite Aid has filed for Chapter 11 bankruptcy, announcing plans to close numerous stores as it deals with mounting debt and multiple opioid-related lawsuits. Rite Aid aims to continue operations while restructuring debts.
The Philadelphia-based company, established in 1962, operates over 2,000 stores across 17 states. The company has allegedly secured $3.45B in financing from lenders to maintain store operations; however, the restructuring plan will involve closing multiple underperforming stores. The number and locations of store closures have not been disclosed. Rite Aid will also sell part of its business, including its prescription benefit manager Elixir Solutions to MedImpact. The company has appointed a new CEO, Jeff Stein, founder of financial advisory firm Stein Advisors, to lead the restructuring efforts.
Rite Aid also plans to use the bankruptcy proceedings to resolve legal disputes related to allegations it knowingly filled unlawful opioid prescriptions, including a federal lawsuit filed in March. The company has reached several settlements already, including up to $30M with the state of West Virginia.