Rite Aid comes out of bankruptcy, is now a private company
PHILADELPHIA (CBS) -- Months after pharmacy chain Rite Aid filed for bankruptcy and got fresh financing amid struggling sales and opioid-related lawsuits, the company says it has completed its restructuring.
Rite Aid has emerged from bankruptcy and is now a privately held company with "a rightsized store footprint, more efficient operating model, significantly less debt and additional financial resources," it said in a news release on Tuesday.
Rite Aid said it planned to close down 154 stores after it filed for Chapter 11 protection in October 2023. Since then, more than 520 Rite Aid pharmacies have closed, about a quarter of the 2,111 pharmacies open at the time of the bankruptcy filing.
The restructuring process has eliminated $2.0 billion of debt and the company has $2.5 billion in exit financing supporting the business operations, the news release said.
The company's Chief Financial Officer, Matt Schroeder, was appointed CEO as part of the transition. He succeeds Jeffrey Stein, who was CEO and Chief Restructuring Officer during the bankruptcy process.
Schroeder first joined the company as vice president of financial accounting in 2000.
Background on the bankruptcy filing
The Justice Department filed a complaint against Rite Aid in March 2023, accusing the company of violating the False Claims Act and the Controlled Substances Act by filling unlawful prescriptions for drugs like oxycodone, fentanyl and benzodiazepine and ignoring internal red flags about the prescriptions, CBS News reported.
Rite Aid filed for bankruptcy in October and said the restructuring would "significantly reduce the company's debt" while helping to "resolve litigation claims in an equitable manner."