Rite Aid Gets Court Approval For First Day Motions
Rite Aid Corporation has received approvals from the U.S. Bankruptcy Court for the District of New Jersey for its “First Day” motions related to the Company’s voluntary Chapter 11 petitions filed on October 15, 2023.
The Court granted interim approval to access up to $3.45 billion in debtor-in-possession financing from certain of its lenders. This financing is expected to provide sufficient liquidity to support the company throughout this process.
Additionally, the court has authorized the company to continue to pay associate wages, salaries and benefits without interruption, pay vendors and suppliers in full for goods and services provided on or after the filing date of October 15, 2023, and otherwise continue to deliver healthcare products and services across its retail and online platforms.
“We are pleased to have received court approval of these critical First Day motions, which will enable Rite Aid to continue serving our customers and meeting their pharmacy needs throughout this process,” said Jeffrey S. Stein, CEO and chief restructuring officer of Rite Aid. “With the support of certain of our lenders and the majority of our bondholders, we look forward to moving through this process and emerging as a stronger company, well-positioned for long-term success.”
As previously announced, Rite Aid reached an agreement in principle with certain of its senior secured noteholders on the terms of a financial restructuring plan that will allow the company to accelerate its ongoing business transformation. Implementing the contemplated restructuring plan will significantly reduce the company’s debt, increase its financial flexibility and enable it to execute on key initiatives, officials with Rite Aid said.
Additionally, as previously announced, Rite Aid has also entered into an agreement with MedImpact Healthcare Systems, Inc. (“MedImpact”), an independent pharmacy benefit solutions company, pursuant to which MedImpact will acquire Rite Aids’ Elixir Solutions business. Under the terms of the agreement, MedImpact will serve as the “stalking horse bidder” in a court-supervised sale process. The proposed transaction is subject to higher and better offers, court approval and other customary conditions.
Elixir Solutions is operating normally and continuing to serve clients, plan sponsors, members and customers as usual. Elixir Insurance is not included in Rite Aid’s Chapter 11 process or the proposed transaction with MedImpact, and it is continuing to operate and serve members as usual.