Rite Aid filed for bankruptcy on Sunday. Oct. 15, as it faces billions of dollars in debt and thousands of federal, state, and local lawsuits related to the opioid crisis. Once the biggest drugstore chain in the U.S., Rite Aid has struggled to compete with the now larger competitors like CVS and Walgreens.
Ahead of the Chapter 11 filing in New Jersey, Rite Aid has received $3.45 billion from lenders to help fund its operations as it goes through bankruptcy. The filing also halts the thousands of opioid lawsuits against it and gives Rite Aid a chance to “resolve litigation claims in an equitable manner,” according to a company statement.
Rite Aid has brought in Jeffrey Stein as Chief Executive Officer and Restructuring Officer to help deal with the company’s billions of dollars of debt. According to Rite Aid, Stein has significant experience helping companies climb out of debt.
“Rite Aid has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable us to move ahead as a stronger company,” Stein said. “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.”
Rite Aid has closed many stores in recent months and is ready to close any underperforming stores to help reduce the company’s rent expenses.
The company added in its statement that it would work with any customers affected by future closures to ensure their prescriptions are transferred to a nearby pharmacy.
Rite Aid employs more than 45,000 people across the country and has not been able to keep up with its, now larger competitors, CVS, Walgreens, and Amazon. According to company filings, as of June, Rite Aid had $3.3 billion owed in debt, not including the thousands of lawsuits it faces.
Once valued at nearly $13 billion, Rite Aid stock has fallen steadily and was valued at just $40 million when markets closed on Friday, Oct. 13.
