A woman shops at a Rite Aid store under a DeepCam surveillance camera in New York City, New York, U.S., June 25, 2020. Picture taken June 25, 2020. Portal/Lucas Jackson/File Photo Acquire License Rights
Oct 16 (Portal) – Debt-laden Rite Aid (RAD.N) filed for bankruptcy protection on Sunday and said it would close underperforming stores as the drugstore chain comes under pressure from lawsuits alleging it has the Opioid crisis fueled in the USA.
The filing will allow it to resolve litigation in an “equitable manner,” the company said, adding that it has received a $3.45 billion commitment from some lenders that will provide liquidity during the bankruptcy process.
Rite Aid, which began as a thrift store in 1962, grew in less than two decades to become the third-largest drugstore chain in the United States, with more than 2,000 retail locations in 17 states.
But it has been rocked by lawsuits alleging that pharmacies contributed to an oversupply of prescription opioids, which has played a major role in the more than one million drug overdose deaths in the United States since 1999.
Rite Aid had total debt of $8.60 billion as of June 3, according to a filing with the U.S. Bankruptcy Court for the District of New Jersey, a portion of which is due in 2025. It also listed total assets of $7.65 billion.
The company named Jeffrey Stein as CEO and chief restructuring officer, replacing interim CEO Elizabeth Burr. It said employees from underperforming stores that are being closed will be relocated to other locations if possible.
Rite Aid joins several companies, including Mallinckrodt, that have filed for bankruptcy amid lawsuits stemming from the U.S. opioid crisis.
Reporting by Leroy Leo, Abinaya Vijayaraghavan and Mariam Sunny in Bengaluru; Edited by Simon Cameron-Moore and Arun Koyyur
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