The prominent U.S. pharmacy chain Rite Aid announced on Wednesday, September 4 that it has successfully completed its financial restructuring and is emerging from bankruptcy as a private company.
The Philadelphia-headquartered company, which filed for bankruptcy protection in October 2023, has used the process to close underperforming stores, reduce its debt load by approximately $2 billion and secure $2.5 billion in exit financing to support its business moving forward.
“Emergence is a pivotal moment in Rite Aid’s history, enabling it to move forward as a significantly transformed, stronger, and more efficient company,” said CEO and Chief Restructuring Officer Jeffrey Stein in an online statement.
As part of its reorganization, Rite Aid sold its pharmacy benefit company Elixir in February 2024, renegotiated with its lenders and creditors, including McKesson, and streamlined its operations to become more financially stable. All of the company’s common shares were canceled, with ownership transferring to certain Rite Aid creditors.
Rite Aid’s restructuring efforts have led to significant leadership changes. Chief Financial Officer Matt Schroeder was appointed CEO, replacing Jeffrey Stein, who led the company through its bankruptcy process. Schroeder, a 20-year company veteran, has been credited with a deep understanding of Rite Aid’s operations, having held several financial roles since 2000.
The company closed hundreds of stores as part of its Chapter 11 restructuring, including all locations in Michigan (160 locations) and nearly all in Ohio (111 locations). These closures were necessary to keep the company “financially and operationally healthy,” according to court filings.
With its reduced debt and smaller store network, Rite Aid aims to operate more efficiently and move forward as a “stronger company,” according to a statement from the company. Despite the challenges it faced, including 1,600 opioid-related lawsuits, the company’s leadership expressed optimism about its future, with plans to continue providing essential pharmacy services to communities across the United States.
