Rite Aid hopes to continue operations through its Chapter 11 bankruptcy, but will close stores and cut costs amid slumping Covid sales and pending opioid lawsuits.
shares found support in pre-market trading Monday after the retail pharmacy chain filed for Chapter 11 bankruptcy protection late Sunday, citing slumping sales and litigation costs linked to the nation's opioid crisis.
Rite Aid also appointed turnaround expert Jeffrey Stein to run the group during its Chapter 11 process, which allows companies time to engage creditors under the supervision of a court-appointed judge, to either stabilize its business and re-emerge as a separate entity or seek liquidation. Stein replaces Elizabeth Burr, who was acting as interim CEO following the departure of Heyward Donigan in June.
Rite Aid listed assets and liabilities of between $1 billion and $10 billion in its Chapter 11 filing with the U.S. Bankruptcy Court in New Jersey, noting it had around 100,000 overall creditors. Its overall debt was pegged at $8.6 billion as of June 3, the filing indicated, with repayment dates as early as 2025.
"Rite Aid’s pharmacists repeatedly filled prescriptions for controlled substances with obvious red flags, and Rite Aid intentionally deleted internal notes about suspicious prescribers," the DoJ said."These practices opened the floodgates for millions of opioid pills and other controlled substances to flow illegally out of Rite Aid’s stores.”
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