Major U.S. pharmaceutical chain Rite Aid said Sunday it has filed for bankruptcy and secured $3.45 billion in new financing as it carries out a restructuring plan to address falling sales and opioid-related lawsuits.
In 2022, Rite Aid settled for up to $30 million to resolve lawsuits alleging that pharmacies contributed to an oversupply of prescription opioids.
The agreement involved a plan with its creditors for a financial restructuring to reduce its debt and position itself for future growth and that filing for bankruptcy was part of that process.
The plan will “significantly reduce the company’s debt” while helping to “resolve litigated claims equitably,” Rite Aid said.
In March, the Justice Department filed a complaint against Rite Aid, alleging that it knowingly filled hundreds of thousands of illegal prescriptions for controlled substances between May 2014 and June 2019. It also accused pharmacists and the company of ignoring the “red flags” that indicated the prescriptions were illegal.
The Justice Department acted after three people who had worked at Rite Aid pharmacies filed a complaint.
Jeffrey Stein, who runs a financial advisory firm, was named CEO of Rite Aid effective Sunday, replacing Elizabeth Burr, who was interim CEO and remains on Rite Aid’s board of directors.