PHILADELPHIA — Rite Aid Corp. has filed for Chapter 11 bankruptcy protection for the second time in less than two years, citing ongoing financial challenges, including mounting debt and increased competition in the retail pharmacy sector.
The Philadelphia-based drugstore chain announced Monday that it has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court in Trenton, NJ. In its filing, Rite Aid reported assets and liabilities each ranging between $1 billion and $10 billion.
Rite Aid previously filed for bankruptcy in October 2023, aiming to restructure its operations and reduce debt. The company emerged from bankruptcy in August 2024 with $2.5 billion in bank loans. However, it has since struggled to meet post-bankruptcy projections, leading to the current filing.
In the latest proceedings, Rite Aid has secured approximately $1.94 billion in financing from lenders to support its operations during the restructuring process. The company plans to keep its stores open and ensure a smooth transition of customer prescriptions to other pharmacies.
As reported by the Wall Street Journal, CEO Matt Schroeder stated that Rite Aid is in discussions with several potential national and regional buyers for its assets. The company has retained Paul Weiss Rifkind Wharton & Garrison as legal counsel, Guggenheim Securities as investment banker, and Alvarez & Marsal as financial adviser.
Rite Aid’s financial difficulties have been exacerbated by declining prescription profits, increased theft, opioid litigation liabilities, and shifting consumer preferences. The company has also faced challenges from failed merger attempts with Walgreens and Albertsons.
As of the latest filing, Rite Aid operates approximately 1,250 stores, down from over 2,300 before its first bankruptcy. The company plans to continue evaluating its store portfolio as part of the restructuring efforts.
The case is being overseen by Judge Michael Kaplan, who also presided over Rite Aid’s previous bankruptcy.
For more information on the bankruptcy proceedings, visit the official restructuring website.
