Rite Aid is negotiating with creditors over the terms of a bankruptcy plan that would include liquidating a substantial portion of its more than 2,100 drugstores, WSJ Pro Bankruptcy reported. Rite Aid has proposed to close roughly 400 to 500 stores in bankruptcy, and either sell or let creditors take over its remaining operations. A group of bondholders would prefer to liquidate a larger number of stores. The two sides are in discussions over the number of stores to be closed, they said. The Philadelphia-based company faces more than $3.3 billion in debt and over a thousand federal lawsuits alleging it oversupplied opioids. A number of its stores are stuck in uneconomical long-term leases that the company can’t get out of, making bankruptcy an effective tool to shed them. The company, which competes with larger drugstore players CVS and Walgreens, plans to conduct an auction process in an effort to sell its Elixir pharmacy unit and other valuable parts of the business. Most of the federal opioid lawsuits against Rite Aid have been consolidated into a multidistrict litigation in Ohio. The company also faces similar cases pending in state courts that allege it contributed to the opioid epidemic, as well as a civil lawsuit by the Justice Department that alleges the company dispensed controlled substances in violation of the False Claims Act and Controlled Substances Act.
