Rite Aid reportedly intends to file for bankruptcy protection for the second time in two years, and is also planning to cut jobs, per a Bloomberg News report on May 5, which cited an internal letter sent to employees.
Rite Aid was unable to secure additional capital from lenders that was needed to continue operating the business, the report said, citing a letter from CEO Matthew Schroeder.
[Related: Rite Aid reportedly considering repeat bankruptcy filing]
The letter states that Rite Aid intends to reduce its workforce at its corporate offices in Pennsylvania, per the report.
Following Bloomberg’s report, Rite Aid issued a press statement, which said that Rite Aid today announced that it is pursuing a strategic and value-maximizing sale process for substantially all of its assets. To facilitate this process, the company and its subsidiaries commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of New Jersey.
During this process, Rite Aid customers can continue to access pharmacy services and products in stores and online, including prescriptions and immunizations. In connection with the sale process and court supervised proceedings, the company is working to facilitate a smooth transfer of customer prescriptions to other pharmacies. Rite Aid employees assisting with this process will continue to receive pay and benefits, per the statement.
Matt Schroeder, CEO, said, “For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers. While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirors. As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”
[Related: Rite Aid reportedly considering repeat bankruptcy filing]
Schroeder continued, “I will be forever grateful to our thousands of associates for their commitment to Rite Aid and its mission, and I thank our entire team – from store associates to corporate employees – for their dedication to our customers and our company. With their support, we have played a critical role in supporting the healthcare needs of countless Americans across the communities that we are honored to serve.”
To support Rite Aid during its sale process, which it intends to conduct under section 363 of the U.S. Bankruptcy Code, the company has secured commitments from certain of its existing lenders to access $1.94 billion in new financing. This financing, along with cash from operations, is expected to provide sufficient funding during the sale and court-supervised process. The company intends to divest or monetize any assets that are not sold through the court-supervised process. Rite Aid has filed a number of customary motions with the Court seeking authorization to support operations, including continued payment of employee wages and benefits.
[Watch DSN: Rite Aid bridges generational gap in pharmacy services with expanded clinical care]
Filings and other information related to the court-supervised proceedings are available at https://restructuring.ra.kroll.com/RiteAid2025, by calling the company’s claims agent, Kroll, toll-free at (888) 575-9318, or +1 (646) 930-4577 for calls originating outside of the U.S. or Canada, or by emailing Kroll at [emailprotected]. Information for landlords is available by contacting A&G Realty Partners at http://www.agrep.com/index.php/active-projects.
Advisors Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal advisor, Guggenheim Securities, is serving as investment banker, and Alvarez & Marsal is serving as financial advisor to the company. Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor to the company.
[Watch DSN: Rite Aid bridges generational gap in pharmacy services with expanded clinical care]
This article has been updated.
