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Rite Aid Files for Chapter 11 Bankruptcy
Drugstore chain operator Rite Aid Corporation has filed for Chapter 11 bankruptcy. The Philadelphia-based company has reached a restructuring agreement with certain of its creditors and has received a commitment for $3.45 billion in new financing from certain of its lenders.
Rite Aid said the bankruptcy process will provide an “orderly and efficient” forum to accelerate its store footprint optimization plan and resolve litigation claims, among other things. The company reportedly faces more than 1,000 state, federal and local lawsuits alleging it illegally filled prescriptions for opioids.
Separately, Rite Aid said it had appointed Jeffrey S. Stein as CEO, chief restructuring officer and board member. 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.”
He added, “The court-supervised process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner. We look forward to working closely with our landlords to determine the best path forward for each of our stores.”
A&G Realty Partners is assisting the company with its store closing and lease restructuring program. Currently, Rite Aid operates more than 2,100 stores across 17 states, but recently announced plans to close up to 500 of them.
Kirkland & Ellis LLP is serving as legal advisor, Guggenheim Securities is serving as investment banker and Alvarez & Marsal is serving as transformation officer and financial advisor to the company.
- ◦Financing
