Despite bankruptcy, Lebanon Rite Aid stays open

By Sarah Brown
Lebanon Local

Rite Aid Corporation announced on Oct. 15 that it initiated a voluntary court-supervised Chapter 11 Bankruptcy and reached an agreement for a financial restructuring plan following years of financial difficulties.

The bankruptcy filing allows the company to continue operating while it “restructures” itself. That means Rite Aid itself is not going out of business, but it does mean some of its store locations will close. Many store locations have already been listed on the chopping block, but as of Nov. 19, the Lebanon location has not been identified among them.

The company’s troubles began when it was learned executives had falsified accounting records in the late 1990s. In 2009, share prices dropped below $1. Mergers with Walgreen’s and Albertson’s failed in 2017 and 2018. The company has continued to struggle to pay down its debts.

In its press release on the matter, the company said the bankruptcy filing is part of the restructuring process that will help strengthen its financial position. Another avenue to reduce its financial burden will be to close under-performing stores.

“The court-supervised (bankruptcy) process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner,” CEO Jeffrey Stein said in a press release. “We look forward to working closely with our landlords to determine the best path forward for each of our stores.”

The company said for the stores that close, it will transfer prescriptions to a nearby pharmacy and relocate employees when possible.

Part of the restructuring process involves selling Elixir Solutions (a pharmacy benefits and services company) to MedImpact Healthcare Systems, Inc., an independent pharmacy benefits solutions company, or to a higher bidder. It is not to be confused with Elixir Insurance, which Rite Aid will retain.

The company has filed motions with the court to continue its operations (including paying its employees) without interruption. The company also stated it intends to pay vendors in full for goods and services provided on or after the filing date.

Rite Aid has been operating since 1962. The company announced the appointment of Jeffrey S. Stein as chief executive officer, chief restructuring officer and a member of the company’s board of directors.

The company invites customers who have questions about the restructuring to call their Customer Care team at 1-800-RITE-AID (1-800-748-3243). The case can be followed at https://restructuring.ra.kroll.com/RiteAid/.