Rite Aid files for bankruptcy amid opioid-related lawsuits and falling sales

Philadelphia — Main U.S. pharmacy chain Ceremony Assist mentioned Sunday that it has filed for chapter and obtained $3.45 billion in contemporary financing because it carries out a restructuring plan whereas dealing with falling gross sales and opioid-related lawsuits.

In 2022, Ceremony Assist settled for as much as $30 million to resolve lawsuits alleging pharmacies contributed to an oversupply of prescription opioids. It mentioned it had reached an settlement with its collectors on a monetary restructuring plan to chop its debt and place itself for future development and that the chapter submitting was a part of that course of.

The plan will “considerably cut back the corporate’s debt” whereas serving to to “resolve litigation claims in an equitable method,” Ceremony Assist mentioned.

In March, the Justice Division filed a criticism in opposition to Ceremony Assist, alleging it knowingly crammed a whole lot of hundreds of illegal prescriptions for managed substances from Might 2014-June 2019. It additionally accused pharmacists and the corporate of ignoring “pink flags” indicating the prescriptions had been unlawful.

The Justice Division acted after three whistleblowers who had labored at Ceremony Assist pharmacies filed a criticism.

Jeffrey Stein, who heads a monetary advisory agency, was appointed Ceremony Assist’s CEO as of Sunday, changing Elizabeth Burr, who was interim CEO and stays on Ceremony Assist’s board.

Earlier this month, Ceremony Assist notified the New York Inventory Alternate that it was not in compliance with itemizing requirements. Throughout a grace interval, the corporate’s inventory continues to be listed and traded.

The chapter submitting in New Jersey and noncompliance with itemizing requirements wouldn’t have an effect on the corporate’s enterprise operations or its U.S. Securities and Alternate Fee reporting necessities, it mentioned.

Ceremony Assist mentioned it was arranging for fee of wages and different prices as traditional, although some “underperforming” shops amongst its greater than 2,100 pharmacies in 17 states shall be closed.

It earlier reported that its income fell to $5.7 billion within the fiscal quarter that ended June 3, down from $6.0 billion a 12 months earlier, logging a web lack of $306.7 million.