Daily Briefing

Hundreds of Rite Aid stores at risk of closing due to bankruptcy


Rite Aid is working with creditors on terms of a bankruptcy plan that would include shutting down hundreds of its stores throughout the United States, as the company grapples with more than $3.3 billion in debt, people familiar with the matter told the Wall Street Journal.

Rite Aid looks to shut down hundreds of stores

Rite Aid, which operates more than 2,330 stores in 17 states, has proposed to shut down 400 to 500 of its stores and either sell its remaining operations or allow creditors to take over in a bankruptcy plan, the Journal reports.

People who spoke to the Journal said a group a bondholders would prefer to liquidate more stores, and that the two sides are still in discussions over just how many stores would be closed. Rite Aid also intends to conduct an auction process to try and sell its Elixir pharmacy unit and other parts of the business, the Journal reports.

Rite Aid currently faces more than $3.3 billion in debt from more than 1,000 federal lawsuits alleging the pharmacy chain oversupplied opioids. The majority of those lawsuits have been consolidated into a multidistrict suit in Ohio.

The pharmacy chain is also facing similar lawsuits in state courts alleging it contributed to the opioid epidemic, as well as a civil suit brought by the Department of Justice (DOJ) alleging Rite Aid violated the False Claims Act and Controlled Substances Act in its distribution of controlled substances. Rite Aid has asked courts to dismiss DOJ's lawsuit and denied that it unlawfully filled opioid prescriptions.

In a potential bankruptcy, the litigation claims are expected to be treated as unsecured, and secured creditors will be paid first from any recoveries provided by Rite Aid, the Journal reports.

A spokesperson for Rite Aid responded to the report saying, "Given the conversations remain ongoing, no decisions have been made at this time and we are focused on reaching an agreement with our financial stakeholders that will make Rite Aid stronger." (Gladstone/Scurria, Wall Street Journal, 9/22; Reuters, 9/22; Pequeño, Forbes, 9/22)


Provider cost and revenue resource library

Discover our best research on managing costs and growing revenues to help you create a financially accountable health system.


SPONSORED BY

INTENDED AUDIENCE

AFTER YOU READ THIS

AUTHORS

TOPICS

RELATED RESOURCES

Don't miss out on the latest Advisory Board insights

Create your free account to access 2 resources each month, including the latest research and webinars.

Want access without creating an account?

   

You have 2 free members-only resources remaining this month remaining this month.

1 free members-only resources remaining this month

1 free members-only resources remaining this month

You've reached your limit of free monthly insights

Become a member to access all of Advisory Board's resources, events, and experts

Never miss out on the latest innovative health care content tailored to you.

Benefits include:

Unlimited access to research and resources
Member-only access to events and trainings
Expert-led consultation and facilitation
The latest content delivered to your inbox

You've reached your limit of free monthly insights

Become a member to access all of Advisory Board's resources, events, and experts

Never miss out on the latest innovative health care content tailored to you.

Benefits include:

Unlimited access to research and resources
Member-only access to events and trainings
Expert-led consultation and facilitation
The latest content delivered to your inbox
AB
Thank you! Your updates have been made successfully.
Oh no! There was a problem with your request.
Error in form submission. Please try again.