Rite Aid Files Chapter 11, Puts Company Up For Sale
Rite Aid has again filed for Chapter 11 bankruptcy protection and is putting the company up for sale. For the second time in 17 months, the drug store chain is seeking bankruptcy protection and issued its filing in U.S. Bankruptcy Court in New Jersey.
According to the company, stores will remain open, and Rite Aid officials are working to facilitate a transfer of customer prescriptions to other pharmacies.
“For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers,” said Matt Schroeder, CEO of Rite Aid. “While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirors. As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”
In October of 2023, Rite Aid filed for bankruptcy protection with the goals of significantly reducing the company’s debt, increasing its financial flexibility, and executing on key initiatives. The company emerged from its first bankruptcy filing in September of 2024 and named Schroeder CEO.
Rumors of another Rite Aid bankruptcy filing surfaced in early April in a report in the Wall Street Journal, which at the time said the company was considering selling some or all of its business as an alternative to filing Chapter 11.
To support the company through the sale process, Rite Aid has secured commitments from certain existing lenders to access $1.94 billion in new financing. This financing, along with cash from operations, is expected to provide sufficient funding during the sale and court-supervised process.
The company intends to divest or monetize any assets that are not sold through the court-supervised process. Rite Aid has filed several customary motions with the Court seeking authorization to support operations, including continued payment of employee wages and benefits.
