Rite Aid, a Philadelphia-based drugstore chain, filed for bankruptcy protection due to declining sales, significant debt, and numerous lawsuits accusing the company of illegally filling opioid prescriptions. The company is expected to close more stores as it undergoes restructuring in U.S. Bankruptcy Court in New Jersey. Lenders have agreed to provide $3.45 billion in new financing to support the company through this process.
Jeffrey S. Stein, the newly appointed CEO, stated that the actions taken by the company will make it stronger going forward. However, Neil Saunders, managing director of GlobalData, believes that bankruptcy was the only sensible option for Rite Aid, as it is not a viable entity.
Rite Aid had approximately $3.3 billion in long-term debt as of June. The company is also facing numerous lawsuits related to its involvement in the opioid epidemic and allegations of violating legal requirements and oversupplying painkillers.
Chapter 11 bankruptcy protection allows Rite Aid to continue operating while restructuring its debts. The company is considering closing additional stores as part of its efforts to reduce its real estate footprint. However, this could result in pharmacy deserts in some areas.
Rite Aid is not the only retailer facing financial challenges. Other companies that have filed for Chapter 11 bankruptcy this year include David’s Bridal, Christmas Tree Shops, Tuesday Morning, and Party City. Even Walgreens Boots Alliance, the parent company of Walgreens, plans to close unprofitable stores to cut costs, with a $6.8 billion pretax charge for opioid-related claims.
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Denial of responsibility!Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
