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NEW YORK — Last week a U.S. bankruptcy judge approved Rite Aid’s restructuring plan, allowing the pharmacy chain to cut its debt by $2 billion and turn over control to a group of lenders.
U.S. Bankruptcy Judge Michael Kaplan approved Rite Aid’s bankruptcy plan at a court hearing in Trenton, New Jersey, saying that the restructuring had saved the company from having to shut down and liquidate operations.
Before Kaplan’s ruling, Rite Aid attorney Aparna Yenamandra told the judge that 28,000 jobs could be lost if the restructuring deal was not approved.
“If we can’t get it done now, we’re simply never going to get it done,” Yenamandra said.
Rite Aid has said the settlements and broader restructuring plan keeps open critical neighborhood pharmacies and will save thousands of jobs.
According to a source, once the plan is finalized the retailer will be left with 1300 stores; many of which are the most productive. They will transferring 1/2 script volumes to existing stores. The company will have no responsibility for the opioid suit. Debt will be approximately $500 million with access to $2.5 billion. Suppliers won’t be responsible for inventory; it will be going to their other stores or warehouse.
Rite Aid filed for Chapter 11 in October 2023, after reporting $750 million in losses and $24 billion in revenue for the past fiscal year.
Rite Aid used its bankruptcy to close hundreds of stores, sell its pharmacy benefit company Elixir, and negotiate settlements with its lenders, drug distribution partner McKesson and other creditors.
