This photo shows a Rite Aid sign on its store in Pittsburgh on January 23, 2023. Rite Aid, a major U.S. pharmacy chain, said on Sunday (October 15) that it had filed for bankruptcy as part of its efforts to restructure its finances.
Gene J. Puskar/AP
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Gene J. Puskar/AP
This photo shows a Rite Aid sign on its store in Pittsburgh on January 23, 2023. Rite Aid, a major U.S. pharmacy chain, said on Sunday (October 15) that it had filed for bankruptcy as part of its efforts to restructure its finances.
Gene J. Puskar/AP
PHILADELPHIA — Major U.S. pharmaceutical chain Rite Aid announced Sunday that it has filed for bankruptcy and secured $3.45 billion in new financing as it implements a restructuring plan while facing declining sales and opioid-related prosecutions.
In 2022, Rite Aid settled for up to $30 million to resolve lawsuits alleging that pharmacies contributed to an oversupply of prescription opioids. It said it had reached agreement with its creditors on a financial restructuring plan aimed at reducing its debt and positioning itself for future growth and that filing for bankruptcy was part of that process.
The plan will “significantly reduce the company’s debt” while helping to “resolve disputes fairly,” Rite Aid said.
In March, the Justice Department filed a lawsuit against Rite Aid, alleging that the company knowingly filled hundreds of thousands of illegal prescriptions for controlled substances between May 2014 and June 2019. It also accused pharmacists and The company ignored “red flags” that the orders were illegal.
The Justice Department acted after three whistleblowers who worked at Rite Aid pharmacies filed a lawsuit.
Jeffrey Stein, who runs a financial consulting firm, was named CEO of Rite Aid on Sunday, replacing Elizabeth Burr, who was interim CEO and remains a member of Rite Aid’s board of directors.
Earlier this month, Rite Aid informed the New York Stock Exchange that it was not in compliance with listing standards. During a grace period, the company’s shares continue to be listed and traded.
The New Jersey bankruptcy filing and failure to meet registration standards will not affect the company’s business operations or the U.S. Securities and Exchange Commission’s reporting requirements, it added. .
Rite Aid said it is arranging payment of wages and other fees as usual, although some “underperforming” stores among its more than 2,100 pharmacies across 17 states will be closed.
It previously reported that its revenue fell to $5.7 billion in the fiscal quarter ended June 3 from $6.0 billion a year earlier, posting a net loss of $306.7 million.