Drugstore chain Rite Aid Corp. has officially filed for bankruptcy, as reported by the Wall Street Journal on Sunday night.
Financial Troubles and Company Changes
Rite Aid plans to tackle its financial difficulties by closing more stores and appointing a new chief executive. Interim CEO Elizabeth Burr will transition to a position on the company's board.
The anticipated bankruptcy filing comes after months of mounting debt, with Rite Aid owing over $3.3 billion, much of which is attributed to numerous lawsuits concerning the distribution of opioid painkillers. By filing for bankruptcy, Rite Aid aims to put pending litigation on hold until the matter is resolved.
Stock Exchange Woes
Rite Aid's struggles were further compounded when the New York Stock Exchange recently notified the company that it no longer met the minimum pricing and valuation standards. The exchange granted Rite Aid a six-month period to regain compliance. In response, the company's stock shares have plummeted by an alarming 80% year-to-date.
Financing and Store Closures
Despite the bankruptcy filing, lenders have agreed to provide financing that will enable Rite Aid to continue operating throughout the chapter 11 bankruptcy process. This lifeline comes as a relief for the company, which currently has around 2,100 stores and employs approximately 47,000 individuals. In an effort to recover financially, Rite Aid has already closed over 200 stores in recent years.
Rite Aid has not yet responded to requests for confirmation or comments on this development.