Rite Aid Files For Bankruptcy Protection; Appoints Jeffrey Stein As CEO

(RTTNews) - Rite Aid Corp. (RAD) filed for Chapter 11 bankruptcy protection in New Jersey. It appointed Jeffrey Stein as its new chief executive officer, effective immediately, the drugstore chain said in a statement on Sunday.

The company will close additional underperforming stores. The efforts will further reduce the company's rent expense and are expected to strengthen its overall financial performance. The company will transfer associates at impacted stores to other Rite Aid locations where possible.

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.

Rite Aid said that it 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 the process.

Rite Aid noted that it has entered into an agreement with MedImpact Healthcare Systems, Inc., an independent pharmacy benefit solutions company, by 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. 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.

In a separate press release, Rite Aid stated that it appointed Jeffrey Stein as Chief Executive Officer, Chief Restructuring Officer and a member of the Company's Board of Directors, effective immediately. He succeeds Elizabeth Burr, who has served as Interim CEO since January 2023. Burr will continue in her role as a Director on the Company's Board.