Bankrupt pharmacy chain Rite Aid Corp. agreed to begin court-supervised mediation with lower ranking creditors, including groups that blame the company for contributing to America’s opioid addiction crisis, Bloomberg News reported. The company, backed by senior lenders, will negotiate with unsecured creditors about how to end the retailer’s insolvency case and on a potential loan package to fund the company’s exit from bankruptcy, Rite Aid attorney Aparna Yenamandra said in court Tuesday. The company will try reach a deal before the end of January, Yenamandra said. The pharmacy chain held a video court hearing Tuesday to ask US Bankruptcy Judge Michael Kaplan to approve a $3.25 billion loan package to refinance older debt and to help pay for the company’s reorganization case. Kaplan said he will sign an order approving the financing later this week after the company makes adjustments to the wording of the loan proposal documents. Rite Aid is trying to sell itself while under court protection in order to pay creditors owed billions of dollars. Should the company fail to find a buyer willing to keep at least part of the chain open, Rite Aid would be forced to liquidate. When retailers liquidate in bankruptcy, lower-ranking creditors are typically paid far less than if the company successfully reorganizes.
