Rite Aid has struck a preliminary deal to transfer ownership of the bankrupt drugstore operator to senior bondholders while also settling lawsuits over its alleged role in overprescribing opioids, writes Alexander Gladstone for The Wall Street Journal.

Under the agreed plan, Rite Aid’s senior bondholders would swap their claims for 90 percent of the stock in the reorganized company, while senior lenders would be paid fully in either cash or in new loans.

If approved by bankruptcy court, the deal would cut more than $2 billion of debt and keep much of the Philadelphia-based drugstore operator’s network of drugstores intact.

The committee that represents the plaintiffs who filed lawsuits against Rite Aid alleging injury from opioids would share with other holders of general unsecured claims a total cash amount of up to $47.5 million. This represents 10 percent of the company’s stock and some potential proceeds from insurance policies.

Rite Aid filed for bankruptcy in October facing more than 1,600 opioid-related lawsuits, as well as financial challenges stemming from its $4 billion debt and a multitude of unprofitable store locations.

However, the company still operates approximately 1,700 pharmacies and employs more than 5,500 pharmacists in 16 states.

Read more about the new preliminary deal Rite Aid recently struck and its timeline since filing for bankruptcy at the Wall Street Journal.

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