On Sunday, major U.S. pharmacy chain Rite Aid officially announced its bankruptcy filing, securing $3.45 billion in fresh financing. This move comes as the company implements a comprehensive restructuring plan in response to declining sales and the ongoing legal challenges related to opioid lawsuits.
In 2022, Rite Aid settled for a sum of up to $30 million to resolve lawsuits implicating the pharmacy chain in contributing to the oversupply of prescription opioids. The company also noted that it had successfully reached an agreement with its creditors for a financial restructuring plan aimed at reducing its debt and positioning itself for future growth, with the bankruptcy filing being a crucial step in this process. The U.S. Department of Justice took legal action against Rite Aid in March, alleging that the chain knowingly dispensed hundreds of thousands of unlawful prescriptions for controlled substances between May 2014 and June 2019. The lawsuit also accused both pharmacists and the company of neglecting to address “red flags” indicating the illegality of these prescriptions.
The U.S. Department of Justice initiated this legal action following a complaint from three whistleblowers previously employed at Rite Aid pharmacies. Notably, Jeffrey Stein, the head of a financial advisory firm, took over as Rite Aid’s CEO as of Sunday, replacing Elizabeth Burr, who served as interim CEO and retained her position on Rite Aid’s board.
Earlier in the same month, Rite Aid informed the New York Stock Exchange of its non-compliance with listing standards. During a grace period, the company’s stock remains listed and continues to be traded. Rite Aid had previously reported a decrease in revenue, with figures dropping to $5.7 billion in the fiscal quarter ending on June 3, compared to $6.0 billion in the prior year, alongside a net loss of $306.7 million.