Rite Aid reportedly preparing Chapter 11 bankruptcy filing

Rite Aid is getting ready to file for Chapter 11 bankruptcy protection as the drug chain and health care services company grapples with liabilities from opioid lawsuits, according to published reports.

Already saddled with $3.3 billion in debt, Rite Aid is preparing a Chapter 11 filing in the coming weeks to halt over 1,000 federal and state lawsuits charging the Philadelphia-based company will helping to fuel the nation’s opioid overdose epidemic by oversupplying controlled-substance prescription painkillers, the Wall Street Journal reported Friday, citing unnamed sources.

The Journal noted that Rite Aid, which also faces a civil suit from the Department of Justice, potentially could address the opioid cases “in a single forum” via a bankruptcy filing.

Rite Aid’s stock price halved on Friday in the wake of the bankruptcy news. Shares opened the day at $1.45 and closed at just under 71 cents.

"We do not comment on rumors and speculation," Joy Errico, senior vice president and chief communications officer at Rite Aid, stated in an email to Winsight Grocery Business on Friday.

Reports had emerged last month that Rite Aid was mulling a Chapter 11 filing as an avenue for addressing a financial crunch from the opioid liabilities, a high debt load, a lackluster quarterly performance, and other market and economic factors. For its fiscal 2024 first quarter ended June 3, Rite Aid posted a bigger net loss, nearly tripling from a year ago, and saw revenues drop 6% year over year.

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Overall, Rite Aid operates more than 2,200 drug stores in 17 states, and its Elixir subsidiary provides pharmacy benefit management and other Rx services.