Rite Aid reaches bankruptcy settlement with lenders, DOJ, McKesson (updated)

Rite Aid

26/03/2024 14:49

(Adds detail from court hearing)
    By Dietrich Knauth
       NEW YORK, March 26 (Reuters) - Pharmacy chain Rite Aid
 RADCQ.PK  has reached a settlement with its lenders, the U.S.
Department of Justice, and drug supplier McKesson Corp  MCK.N ,
clearing a path for Rite Aid to complete its bankruptcy case by
late April, a company lawyer said Tuesday.
    "We have reached an agreement on all key points with all key
economic stakeholders," Rite Aid attorney Aparna Yenamandra said
at a bankruptcy court hearing in Trenton, New Jersey. Yenamandra
did not provide details about the settlement, saying that some
issues needed to be worked out before it can be presented in
court. 
        The deal does not currently have the support of
creditors who have sued Rite Aid over its sale of opioid
medications, according to Arik Preis, an attorney representing
Rite Aid's opioid creditors. Before it filed for bankruptcy,
Rite Aid faced over 1,600 lawsuits alleging that pharmacy chain
ignored red flags and illegally filled prescriptions for
addictive opioid medication.
  
        Rite Aid's lawyers said they will work to resolve
concerns with the deal by Thursday. 
  
        "The time has come to reach a resolution, and that is
exactly what everyone is going to do in the next 48 hours," Rite
Aid attorney Joshua Sussberg said at the hearing. 
  
        Rite Aid will return to court on Thursday, when it will
ask U.S. Bankruptcy Judge Michael Kaplan to allow the company to
begin gathering votes for its bankruptcy plan. Kaplan said he is
"very much intrigued" to hear more details about the settlement
at the upcoming court hearing. 
  
        If Rite Aid can begin the voting process this week, it
should be able to get final court approval of its bankruptcy
restructuring by April 22, Yenamandra said. 
  
        Rite Aid 
    filed for bankruptcy
     in October, seeking to address its high debt, shut down
underperforming retail locations, and sell off non-core business
units. Rite Aid received bankruptcy court approval to 
    sell its pharmacy benefit company
    , Elixir, in January.
  

 (Reporting by Dietrich Knauth, Editing by Nick Zieminski)
 ((Dietrich.Knauth@thomsonreuters.com;))