Rite Aid, burdened by substantial debt and facing legal actions linking it to the U.S. opioid crisis, has sought bankruptcy protection and announced plans to shutter underperforming stores.
This move allows the company to address the legal claims in a fair manner, while it has secured a commitment of $3.45 billion from select lenders to maintain financial stability during the bankruptcy process.
Founded in 1962 as a thrift shop, Rite Aid grew to become the third-largest chain of drugstores in the U.S. in less than two decades, operating over 2,000 retail locations across 17 states. However, it has been hit by lawsuits alleging its pharmacies contributed to the oversupply of prescription opioids, a significant factor in the more than 1 million drug overdose deaths in the U.S. since 1999.
As of June 3, Rite Aid had a total debt of $8.60 billion, with some due in 2025, and listed assets totaling $7.65 billion in a filing with the U.S. Bankruptcy Court for the District of New Jersey.
The company has appointed Jeffrey Stein as its CEO and chief restructuring officer, taking over from interim CEO Elizabeth Burr. Rite Aid intends to relocate employees from the closing underperforming stores to other viable locations when possible. Rite Aid joins the ranks of companies, including Mallinckrodt, that have filed for bankruptcy due to their connection to lawsuits related to the U.S. opioid crisis.