Rite Aid Corporation, a leading drugstore chain operator based in Philadelphia, has recently filed for Chapter 11 bankruptcy. The company has reached an agreement with some of its creditors and secured $3.45 billion in new financing from lenders.
According to Rite Aid, the bankruptcy process will provide a streamlined platform to expedite its store optimization plan and resolve ongoing litigation matters. The company is currently facing over 1,000 lawsuits at state, federal and local levels related to alleged illegal distribution of opioids.
In addition to this development, Rite Aid also announced the appointment of Jeffrey S. Stein as CEO, chief restructuring officer and board member. Stein expressed confidence that with support from lenders they can strengthen their financial position while advancing transformation initiatives and executing their turnaround strategy.
He further stated that the court-supervised process will enable them to efficiently optimize their store footprint while working closely with landlords on determining the best course for each location.
To assist with store closures and lease restructuring program A&G Realty Partners has been appointed by Rite Aid as well. Currently operating over 2,100 stores across 17 states Kirkland & Ellis LLP is serving as legal advisor; Guggenheim Securities is acting as investment banker; Alvarez & Marsal serves as transformation officer along with being financial advisor for this matter.
