Philadelphia Navy Yard-based Rite Aid is currently negotiating with its creditors regarding a Chapter 11 plan that would include shutting down a sizable number of the chain’s stores, write Alexander Gladstone and Andrew Scurria for The Wall Street Journal.
The company has proposed to close between 400 and 500 of the stores in bankruptcy and to either sell its remaining operations or let creditors take them over.
A group of bondholders would like to see a larger number of stores liquidated, according to people familiar with the talks.
Rite Aid faces over $3.3 billion in debt as well as more than a thousand federal lawsuits that allege it oversupplied opioids. In a potential bankruptcy, the opioid litigation claims will most likely be treated as unsecured.
Additionally, some of its stores are locked in uneconomical long-term leases that the company is not able to get out of, which makes bankruptcy a good tool to get rid of them.
The company also plans on having an auction for its Elixir pharmacy unit and some other valuable parts of the business.
Read more about Rite Aid in The Wall Street Journal.