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Rite Aid files for bankruptcy

Rite Aid Sunday announced it has 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. In connection with this, Rite Aid has initiated a voluntary court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.

Rite Aid is continuing to deliver leading healthcare products and services across its retail and online platforms for the nearly one million customers it serves daily.

The company remains committed to improving health outcomes and delivering on its purpose to help people achieve whole health for life.

The court-supervised process provides an orderly and efficient forum for Rite Aid to:

  • Finalize and build consensus for the agreement in principle the Company has reached with certain of its senior secured noteholders;
  • Accelerate the Company’s store footprint optimization plan;
  • Implement a proposed transaction under which MedImpact would acquire Elixir Solutions, subject to the outcome of a court-approved marketing process;
  • Access additional liquidity; and
  • Resolve litigation claims in an equitable manner.

In connection with this process, Rite Aid has received a commitment for $3.45 billion in new financing from certain of its lenders. This financing is expected to provide sufficient liquidity to support the Company throughout this process.

Reducing Debt and Enhancing Financial Flexibility

The company has reached an agreement in principle with certain of its senior secured noteholders on the terms of a financial restructuring that would significantly reduce the Company’s debt.

Rite Aid intends to use the court-supervised process to finalize the agreement in principle, build additional consensus for the financial restructuring plan it contemplates and implement it as quickly and efficiently as possible.

Optimizing the Company’s Store Footprint

Rite Aid regularly evaluates its store portfolio to ensure it is operating efficiently while meeting the needs of its customers, communities and associates. In connection with the court-supervised process, the company will continue assessing its footprint and close additional underperforming stores. These efforts will further reduce the company’s rent expense and are expected to strengthen its overall financial performance.

“The court-supervised process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner. We look forward to working closely with our landlords to determine the best path forward for each of our stores,” Chief Executive Officer Jeffrey S. Stein said

The company is making every effort to ensure customers of impacted stores have access to health services, whether at another Rite Aid or a nearby pharmacy, and will work to transfer prescriptions accordingly so that there is no disruption of services. The company will also transfer associates at impacted stores to other Rite Aid locations where possible.

A&G Realty Partners is assisting the company with its store closing and lease restructuring program. Rite Aid landlords are encouraged to contact A&G Realty Partners through its website,

Serving Elixir Clients, Plan Sponsors, Members and Customers While Conducting a Sale Process

Rite Aid has entered into an agreement with MedImpact Healthcare Systems, Inc. (“MedImpact”), an independent pharmacy benefit solutions company, pursuant to which MedImpact will acquire Rite Aid’s Elixir Solutions business. Under the terms of the agreement, MedImpact will serve as the “stalking horse bidder” in a court-supervised sale process under section 363 of the U.S. Bankruptcy Code. Accordingly, 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.

Additional Information About the Court-Supervised Process

Rite Aid and certain of its subsidiaries, including those that comprise Elixir Solutions, have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. Elixir Insurance is not included in the Chapter 11 process.

The company has filed a number of customary motions with the Court seeking authorization to support its operations, including the payment of employee wages, salaries and benefits without interruption. The company expects to receive court approval for these requests shortly. The company intends to pay vendors and suppliers in full for goods and services provided on or after the filing date.

Jay Edwards

Born and raised in Northwest NJ, Jay has a degree in Communications and has had a life-long interest in local radio and various styles of music. Jay has held numerous jobs over the years such as stunt car driver, bartender, voice-over artist, traffic reporter (award winning), NY Yankee maintenance crewmember and peanut farm worker. His hobbies include mountain climbing, snowmobiling, cooking, performing stand-up comedy and he is an avid squirrel watcher. Jay has been a guest on America’s Morning Headquarters,program on The Weather Channel, and was interviewed by Sam Champion.

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