HomeEconomyUS drug chain Rite Aid files for bankruptcy amid rising debt, lawsuits

US drug chain Rite Aid files for bankruptcy amid rising debt, lawsuits


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Major U.S. pharmacy chain Rite Aid filed for chapter Sunday and has obtained $3.45 billion in recent financing because it carries out a restructuring plan whereas dealing with falling gross sales and opioid-related lawsuits.

In 2022, Rite Aid settled for as much as $30 million to resolve lawsuits alleging pharmacies contributed to an oversupply of prescription opioids. It stated it had agreed with its collectors on a monetary restructuring plan to chop its debt and place itself for future progress and that the chapter submitting was a part of that course of.

The plan will “significantly reduce the company’s debt” whereas serving to to “resolve litigation claims equitably,” Rite Aid stated.

In March, the Justice Department filed a criticism in opposition to Rite Aid, alleging it knowingly stuffed tons of of hundreds of illegal prescriptions for managed substances within the interval between May 2014 and June 2019. It additionally accused pharmacists and the corporate of ignoring “red flags,” indicating the prescriptions had been unlawful.

The Justice Department acted after three whistleblowers who had labored at Rite Aid pharmacies filed a criticism.

Jeffrey Stein, who heads a monetary advisory agency, was appointed Rite Aid’s CEO as of Sunday, changing Elizabeth Burr, who was interim CEO and remained on Rite Aid’s board.

Earlier this month, Rite Aid notified the New York Stock Exchange that it was not in compliance with itemizing requirements. During a grace interval, the corporate’s inventory continues to be listed and traded.

The chapter submitting in New Jersey and noncompliance with itemizing requirements wouldn’t have an effect on the corporate’s business operations or its U.S. Securities and Exchange Commission reporting necessities, it stated.

Rite Aid stated it was arranging to pay wages and different prices as typical, although some “underperforming” shops amongst its greater than 2,100 pharmacies in 17 states might be closed.

It earlier reported that its income fell to $5.7 billion within the fiscal quarter that ended June 3, down from $6.0 billion a 12 months earlier, logging a internet lack of $306.7 million.

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