Rite Aid filed for Chapter 11 bankruptcy on Sunday, placing a pause on the lawsuits the drugstore is facing over its supposed role in the US opioid crisis and naming a new CEO.
Rite Aid announced that it has received a commitment from some of its lenders for $3.45 billion in new funding, which will provide enough liquidity to see it through the bankruptcy process.
According to the company, the filing for Chapter 11 will also allow the company to address legal claims in an “equitable manner.”
Aside from the opioid claims, the pharmacy chain had total obligations of $8.60 billion as of June 3, according to a court filing with the United States Bankruptcy Court for the District of New Jersey, some of which were due to be reimbursed in 2025. Rite Aid also reported $7.65 billion in total assets.
Rite Aid named Jeffrey Stein as its new CEO and Chief Restructuring Officer, succeeding interim CEO Elizabeth Burr. According to the corporation, Stein has been named to the board of directors, and Burr will continue to serve on the board.
Rite Aid will eliminate more underperforming stores and, where possible, relocate staff from affected stores to other locations, the business announced without providing further information.
In addition to other pharmacy chains, Rite Aid has been listed as a defendant in lawsuits alleging that they contributed to the opioid crisis in the US.
The US Department of Justice filed a lawsuit against Rite Aid, accusing it of failing to notice the “red flags” while illegally filling hundreds of thousands of prescriptions for banned narcotics, including opioids.
Although it is far smaller than its competitors like Walgreens Boots Alliance and CVS Health, the firm runs stores exceeding 2,000 in 17 states in the US.
Rite Aid is one of the many corporations that have filed for Chapter 11 bankruptcy as a result of lawsuits stemming from the opioid crisis in the US.
Mallinckrodt, which is also being sued for marketing generic opioids, declared bankruptcy in August and is in talks with large investors about selling part or all of its business units.
Rite Aid has reached an agreement with MedImpact Healthcare Systems to acquire its Elixir Solutions division. MedImpact will be the stalking horse bidder’ in a court-supervised auction.