BY Richard Summerfield
US pharmacy chain Rite Aid Corporation has emerged from Chapter 11 bankruptcy protection after successfully completing its restructuring process.
The company has eliminated $2bn in debt and said it has “received approximately $2.5 billion in exit financing to support the business going forward.”
Following its emergence from Chapter 11, Rite Aid will operate as a privately held company owned by creditors, operating “more than 1700 retail pharmacy locations across 16 states with a workforce of more than 45,000 strong”, according to the company’s website. Rite Aid closed more than 500 stores during the bankruptcy proceedings.
Separately, Rite Aid has announced that Matt Schroeder, who most recently served as chief financial officer, has been appointed its new chief executive. He succeeds Jeffrey S. Stein, who joined the company as chief executive and chief restructuring officer to lead the court-supervised Chapter 11 process.
“Emergence is a pivotal moment in Rite Aid’s history, enabling it to move forward as a significantly transformed, stronger and more efficient company,” said Mr Stein. “We are grateful for the ongoing support of our customers, associates and partners, and we look forward to continuing to provide leading pharmacy services designed to improve health and wellness outcomes across the communities we serve. I am excited about Rite Aid’s future as it continues to focus on executing its strategy and delivering for its customers and stakeholders.”
“I am honored to lead Rite Aid on its journey as we continue serving our customers and communities,” said Mr Schroeder. “Thanks to the dedication of the entire organization, we are beginning our next phase as a transformed company. I see Rite Aid’s remarkable potential, and I look forward to working with the team as we remain committed to our purpose of helping our customers achieve whole health for life.”
Rite Aid filed for Chapter 11 bankruptcy in October 2023, in light of significant financial challenges. The company recorded $750m in losses against $24bn in revenue for the prior fiscal year. As part of the restructuring, in addition to closing hundreds of locations, the company agreed to sell its pharmacy benefit unit Elixir, and settle with key creditors, including McKesson.
The plan also allocates $47.5m to junior creditors involved in opioid-related litigation, addressing claims from individuals and local governments. Prior to its Chapter 11 filing, Rite Aid faced 1600 opioid lawsuits, including one by the federal government alleging that the company ignored potential concerns when filling suspicious prescriptions for addictive opioid pain medication.
News: US pharmacy chain Rite Aid to operate as a private company as it emerges from bankruptcy