Faced with mounting debt and a miserable environment for drug stores, Rite Aid filed for Chapter 11 bankruptcy protection Sunday.
Rite Aid filed for Chapter 11 bankruptcy protection Sunday, a casualty of a miserable environment for drug stores, exacerbated by its runner-up status to bigger chains and expensive legal battles for allegedly filling unlawful opioid prescriptions.
On Thursday, it filed a notice to the US Securities and Exchange Commission saying it would be unable to file its latest quarterly financial report because it was looking at "strategic alternatives," which is Wall Street speak for "considering bankruptcy." "It was always a matter of when, not if, Rite Aid would file for bankruptcy," said Neil Saunders, managing director of GlobalData, in a note to investors. "The company has been deep in the red for the past six years."The company said in a statement it had secured $3.5 billion in financing and debt reduction agreements from lenders to keep the company afloat through its bankruptcy.
"With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy," he said. "In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on -- now and into the future.
Walgreens, CVS and others settled similar lawsuits over the past few years, but they remain in better financial shape and were largely able to weather the tens of billions of dollars owed to various government agencies in settlements.
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