Rite Aid files for bankruptcy, announces financial restructuring plans amid opioid complaints, lawsuits

One of the country’s greatest drugstore chains has voluntarily initiated the Chapter 11 procedure for chapter coverage.

Rite Aid announced Sunday that the corporate had reached an settlement with collectors at the phrases of its financial restructuring plan that may “increase its financial flexibility” and “significantly reduce” its present debt.

In addition to billions in debt and slumping gross sales, Rite Aid has confronted over 1,000 federal, state and native lawsuits that declare its pharmacies allegedly crammed hundreds of unlawful prescriptions for painkillers, in line with the New York Times. In March, the Justice Department filed a complaint in opposition to the corporate, claiming it crammed “unlawful prescriptions for controlled substances” that allegedly had evident and continuously more than one pink flags, indicating misuse. The corporate has denied the ones claims.

In its press unlock Sunday, the corporate mentioned it’s going to “resolve litigation claims in an equitable manner.”

Rite Aid didn’t straight away reply to ABC News’ request for further remark.

Rite Aid says it employs greater than 6,100 pharmacists and operates over 2,100 retail pharmacy places throughout 17 states.

The corporate stated Sunday it had secured a dedication for $3.45 billion in new financing and debt aid agreements below the court-supervised procedure which is “expected to provide sufficient liquidity to support the Company throughout this process,” including that it will additionally shut some underperforming retailer places and dump some property in an effort to “reduce the Company’s rent expense” and “strengthen its overall financial performance.”

“The Company is making every effort to ensure customers of impacted stores have access to health services, whether at another Rite Aid or a nearby pharmacy, and will work to transfer prescriptions accordingly so that there is no disruption of services,” the corporate mentioned. Rite Aid “will also transfer associates at impacted stores to other Rite Aid locations where possible.”

Rite Aid additionally introduced Jeffrey S. Stein will formally take over for Elizabeth Burr as leader govt officer. He will even function leader restructuring officer and a member of the corporate’s board of administrators. Burr is predicted to “continue in her role as a Director on the Company’s Board,” Rite Aid stated.

“Rite Aid has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable us to move ahead as a stronger company,” Stein stated in a commentary. “With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on now and into the future.”