Debt-laden Rite Aid (RAD.N) filed for bankruptcy protection on Sunday and said it would close underperforming stores, as the drugstore chain comes under pressure from lawsuits alleging that it helped fuel the U.S. opioid crisis.
The filing will allow it to resolve litigation claims in an "equitable manner", the company said, adding it has received a commitment for $3.45 billion from some lenders, which will provide liquidity during the bankruptcy process.
Rite Aid, which began as a thrift shop in 1962, became the third largest U.S. chain of drugstores in less than two decades with more than 2,000 retail stores in 17 states.
But it was pummeled by lawsuits alleging pharmacies contributed to an oversupply of prescription opioids, which has played a major role in the more than 1 million deaths due to drug overdoses in the United States since 1999.
Rite Aid had a total debt of $8.60 billion as of June 3, according to a filing with the U.S. Bankruptcy Court for the District of New Jersey, some of which is due in 2025. It also listed total assets of $7.65 billion.
The company appointed Jeffrey Stein as its CEO and chief restructuring officer, replacing interim CEO Elizabeth Burr. It said it will transfer employees at underperforming stores that would be closed to other locations where possible.
Rite Aid joins several companies, including Mallinckrodt, that have filed for bankruptcy due to lawsuits over the U.S. opioid crisis.