Drugstore chain Rite Aid Corp. filed for bankruptcy Sunday, as it faces billions of dollars of debt related to opioid lawsuits.
In a statement Sunday night, Rite Aid
said it will close some “underperforming” stores and announced Jeffrey Stein as its new chief executive and chief restructuring officer. Interim CEO Elizabeth Burr will remain on the company’s board.
The bankruptcy filing had been expected for months, and the Wall Street Journal reported in August that Rite Aid was more than $3.3 billion in debt, due largely to hundreds of lawsuits related to its distribution of opioid painkillers. The bankruptcy filing stays pending litigation against the company.
Earlier this month, the New York Stock Exchange warned Rite Aid that it was “no longer in compliance” with the exchange’s minimum pricing and valuation standards, and gave it six months for the stock to regain compliance. Rite Aid shares have plunged about 80% year to date.
Rite Aid said Sunday that lenders will provide $3.45 billion in financing for the chain to continue operating through the chapter 11 bankruptcy process.
“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,” Stein said in a statement. “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.”
Rite Aid said it would work to minimize the effect of store closures on its customers so there is no disruption of services, and will transfer affected workers to different locations when possible.
Rite Aid has about 2,100 stores and employs around 47,000 people. It has closed more than 200 stores in the past couple of years.
Rite Aid also said it had reached a deal for pharmacy benefit-solutions company MedImpact Healthcare Systems Inc. to acquire its Elixer Solutions business. A price for the transaction was not disclosed.