Major U.S. pharmacy chain Rite Aid says it has filed for bankruptcy and bought $3.45 billion in recent financing because it carries out a restructuring plan whilst dealing with falling gross sales and opioid-related complaints
ByThe Associated Press
October 16, 2023, 12:57 AM
FILE – This photograph displays an indication of Rite Aid on its retailer in Pittsburgh on Jan. 23, 2023. Rite Aid, a big U.S. pharmacy chain, mentioned Sunday, Oct. 15, that it has filed for bankruptcy as a part of its effort to restructure its price range. (AP Photo/Gene J. Puskar, File)
The Associated Press
PHILADELPHIA — Major U.S. pharmacy chain Rite Aid mentioned Sunday that it has filed for bankruptcy and bought $3.45 billion in recent financing because it carries out a restructuring plan whilst dealing with falling gross sales and opioid-related complaints.
In 2022, Rite Aid settled for as much as $30 million to get to the bottom of complaints alleging pharmacies contributed to an oversupply of prescription opioids. It mentioned it had reached an settlement with its collectors on a monetary restructuring plan to chop its debt and place itself for long run enlargement and that the bankruptcy submitting was once a part of that procedure.
The plan will “significantly reduce the company’s debt” whilst serving to to “resolve litigation claims in an equitable manner,” Rite Aid mentioned.
In March, the Justice Department filed a criticism in opposition to Rite Aid, alleging it knowingly stuffed loads of hundreds of illegal prescriptions for managed components from May 2014-June 2019. It additionally accused pharmacists and the corporate of ignoring “red flags” indicating the prescriptions had been unlawful.
The Justice Department acted after 3 whistleblowers who had labored at Rite Aid pharmacies filed a criticism.
Jeffrey Stein, who heads a monetary advisory company, was once appointed Rite Aid’s CEO as of Sunday, changing Elizabeth Burr, who was once intervening time CEO and stays on Rite Aid’s board.
Earlier this month, Rite Aid notified the New York Stock Exchange that it was once no longer in compliance with checklist requirements. During a grace length, the corporate’s inventory remains to be indexed and traded.
The bankruptcy submitting in New Jersey and noncompliance with checklist requirements would no longer have an effect on the corporate’s industry operations or its U.S. Securities and Exchange Commission reporting necessities, it mentioned.
Rite Aid mentioned it was once arranging for fee of wages and different prices as standard, even though some “underperforming” retail outlets amongst its greater than 2,100 pharmacies in 17 states will probably be closed.
It previous reported that its income fell to $5.7 billion within the fiscal quarter that ended June 3, down from $6.0 billion a yr previous, logging a web lack of $306.7 million.
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