U.S. drugstore chain Rite Aid (RAD) has filed for bankruptcy, saying it plans to close many of its stores and appoint a new chief executive officer (CEO) as it restructures its finances.
The retail pharmacy chain, which has more than 2,000 locations, is grappling with multiple lawsuits related to the dispensing of opioid medications.
The U.S. Justice Department sued Rite Aid in March of this year, claiming the company knowingly violated the law by filling unlawful prescriptions for controlled substances, ignored red flags, and helped fuel America’s opioid epidemic.
Rite Aid has denied the allegations. In a news release, Rite Aid said that filing for Chapter 11 bankruptcy protection from its creditors will enable it to resolve the lawsuits.
The company said that it has secured $3.45 billion U.S. in new financing to help support it through bankruptcy proceedings.
Additionally, Rite Aid said that Jeffrey Stein will take over as its new CEO effective immediately, replacing former CEO Elizabeth Burr, who has served on an interim basis throughout this year.
The stock of Rite Aid has declined 84% over the last 12 months and currently trades at $0.65 U.S. per share.
