OAN’s James Meyers
8:35 AM – Monday, October 16, 2023
The drug store Rite Aid has officially filed for bankruptcy.
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On Sunday, the company filed for Chapter 11 bankruptcy protection in New Jersey and said that it would begin restructuring to significantly reduce its debt.
The announcement comes as Rite Aid was known as a runner up to other drug stores and had ongoing legal battles for allegedly filing unlawful opioid prescriptions.
The company recently appointed Jeffrey Stein as their new chief executive officer and chief restructuring officer.
Rite Aid Chairman Bruce Bodaken said in a statement, “Jeff is a proven leader with a strong track record of guiding companies through financial restructurings. We look forward to benefiting from his contributions and leveraging his expertise as we strengthen Rite Aid’s foundation and position the business for long-term success.”
At the end of the most recent quarter, revenue dropped to $5.6 billion, which is down from $6.01 billion from a year-ago.
With the significant loss of revenue, Rite Aid warned investors it expects to lose between $650 million and $680 million for their fiscal 2024 year.
According to experts, the loss of revenue is due to less demand of COVID-19 vaccines and testing, a membership reduction in the company’s prescription drug plan and a loss of customers from its Elixir pharmacy benefits.
It has also been difficult for Rite Aid to keep up with competitors CVS and Walgreens, as those companies have pivoted to a healthcare focus and have made investments to match.
In March, the U.S, Department of Justice filed a lawsuit against Rite Aid accusing them of knowingly filling unlawful prescriptions for controlled substances.
Rite Aid has asked a court to drop the lawsuit and has denied the allegations of unlawfully filling opioid prescriptions.
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