(Bloomberg) — Rite Aid Corp. is filing for Chapter 11 bankruptcy to restructure debt including opioid liabilities, according to people familiar with the matter.
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The people, who asked not to be identified because the discussions are private, said that consultants for the Philadelphia, Pennsylvania-based pharmacy chain had been in confidential discussions to come up with a plan before applying. The sources added that the company is still finalizing its plans, which may change. Rite Aid is one of the largest pharmacy chains in the United States, with more than 2,200 locations.
The Philadelphia, Pennsylvania-based pharmacy chain is working on its debt. In March, the Department of Justice alleged that Rite Aid knowingly filled hundreds of thousands of illegal prescriptions for controlled substances. The federal intervention emerged after three whistleblowers who previously worked at Rite Aid pharmacies sued the company in 2019.
Representatives for Rite Aid and company advisor Guggenheim Securities declined to comment. Representatives of the firm’s advisors, Kirkland & Ellis and Alvarez & Marsal, did not respond to requests for comment. The Wall Street Journal previously reported that the company is preparing to file for bankruptcy in the coming weeks.
Rite Aid has more than $3 billion in long-term loans. Its 7.5% first-class notes due in 2025 are trading at 59.5 cents on the dollar, according to Trace. Shares of the company fell more than 50% to 66 cents on Friday.
– With the help of Fiona Rutherford.
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