𒐪 Drugstore company Rite Aid filed for bankruptcy, facing 🐟slowing sales and opioid litigation. The company will also close underperforming stores according to a turnaround plan agreed upon by its key creditors.

Can Rite Aid Turn A Corner?

Rite Aid and its subsidiaries filed voluntary petitions for Chapter 11 bankruptcy protection on Sunday in a New Jersey bankruptcy court. The company said that its agreement with creditors includes a "store optimization" plan, which will lead to the closure of underperforming outlets. Some of those creditors have committed to fresh funding of $3.45 billion to the turnaround plan.

Management said it was "making every effort to ensure customers of impacted stores have access to health services, whether at another Rite Aid or a nearby pharmacy, and will work to transfer prescriptions accordingly."

There are changes in the boardroom with interim CEO Elizabeth Burr handing over the reins to Jeffrey Stein, founder of Stein Advisors, which is focused on turnarounds and financial restructuring at troubled companies. Burr will remain at the company as a director.

What's Ailing Rite Aid?

Rite Aid was once one of the largest drugstore chains in the U.S., but it has hit a few road bumps. The company's most recent problems stem from slowing sales and opioid lawsuits.

The Justice Department filed a complaint in March saying that some of the company's prescriptions “had obvious, and often multiple, red flags indicating misuse.”

The company reported a net loss of $307 million for its first-quarter earnings in June. That included a goodwill impairment of $152 million for Elixir Solutions, a pharmacy benefits company, especially on account of its insurance pricing. With debt obligations of $3.3 billion and the looming litigation, the company struggled to move forward with its turnaround plans. Separate from its turnaround plan, 🌳Rite Aid wi💜ll also sell Elixir to MedImpact Healthcare Systems.

Rite Aid has been struggling for a while and tried other options to avoid bankruptcy. However, regulatory hurdles have 澳洲幸运5官方开奖结果体彩网:thwarted multiple efforts over the years to merge the company with other pharmacy�ౠ� players.