Rite Aid filed for Chapter 11 bankruptcy protection Sunday, a move that could help it manage its billions of dollars in debt and shield itself from lawsuits alleging it unlawfully filled opioid prescriptions while an epidemic of prescription drug abuse raged across America.In a statement on the filing, the company said it has received a commitment for $3.45 billion in new financing from lenders, which would provide enough liquidity to support the company throughout the restructuring process.
It also announced the appointment of Jeffrey S. Stein as CEO, chief restructuring officer and a member of the company’s board of directors. In response to the filing, analyst Neil Saunders, managing director of GlobalData, said in an email that bankruptcy was the “only sensible option” for Rite Aid, and that it “simply isn’t a viable entity” financially.The Chapter 11 filing, also known as a reorganization, allows a company to stay in business while restructuring its debts through a court-controlled process. Rite Aid had about $3.
“It’s certainly something we’re going to continue to look at as we think about just how do we drive as much profitability as we can while still maintaining the presence in communities and providing access to our customers and communities,” Schroeder said. Bankruptcy could mean more shop closures, Saunders predicted, running the risk of pharmacy deserts in some areas., which in April announced plans to lay off staff and shutter 360 stores as well as 120 Buy Buy Baby locations.
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