Rite Aid filed for Chapter 11 bankruptcy Sunday as the US chain pharmacy began massive restructuring to reduce its mounting debt amid countless lawsuits and dwindling sales.
The Philadelphia-based company was awarded a commitment for $3.45 billion in new financing — which is expected to provide liquidity as it faces more than $8.6 billion in debt — as part of the filing.
The bankruptcy process will also allow Rite Aid to resolve in an “equitable manner” over a thousand federal, state and local lawsuits alleging it oversupplied opioids, the company said in a release.
Rite Aid also appointed a new CEO and chief restructuring officer Sunday as it moves through the bankruptcy proceedings.
Jeffrey Stein — who founded Stein Advisors, a financial advisory firm that focuses on fixing troubled companies — will replace Elizabeth Burr, a Rite Aid board member who had been serving as interim CEO since January.
Rite Aid will close as many as 500 of its underperforming stores — a significant portion of its more than 2,100 drugstores across the nation.
The company proposed either selling the sites or allowing creditors to take over, but said it would transfer employees at impacted stores to other locations where possible.