One of America’s leading retailers and pharmacy chains, Rite Aid, is reportedly on the brink of bankruptcy.
Sources from Fox Business claim the company is gearing up to file for Chapter 11 bankruptcy protection.
This impending decision is believed to be primarily due to the substantial debt burden the company holds and the myriad of ongoing lawsuits against them.
Following these reports, Rite Aid’s shares experienced a noticeable decline.
When approached by Fox Business for a statement, the company declined to confirm or deny, stating they would not comment on “rumors and speculation.”
Critics suggest that Rite Aid’s financial predicament may be intrinsically tied to its alleged role in the opioid epidemic, accusing the company of knowingly distributing excessive quantities of opioid medications.
Data from the Centers for Disease Control (CDC) states that almost 280,000 Americans died from opioid overdoses from 1999 to 2021.
Should the courts greenlight Rite Aid’s bankruptcy petition, the pharmacy chain would follow in the footsteps of pharmaceutical heavyweights like Purdue Pharma and Mallinckrodt.
Both firms have similarly pursued bankruptcy to navigate the financial turbulence stemming from opioid-related lawsuits and liabilities.
Interestingly, Rite Aid has yet to finalize a settlement agreement regarding its opioid lawsuits, as reported by The Wall Street Journal.
The range of lawsuits that Rite Aid currently faces is expansive. The company is under scrutiny from the federal government, several state governments, and numerous private entities.
A notable lawsuit filed in March by the Department of Justice alleges that Rite Aid violated both the Controlled Substances Act and the False Claims Act.
This bankruptcy could have broader implications for the American public, as Rite Aid currently operates 2,213 locations across the country.
There’s potential for many of these branches to close if the company’s assets are liquidated in the bankruptcy process.
In a related development surrounding the opioid crisis, the billionaire Sackler family, often linked with the surge of opioid OxyContin via Purdue Pharma, recently sought legal immunity from opioid-related lawsuits.
Their proposed $6 billion settlement, however, was rebuffed by the Supreme Court earlier this month, CNN reports.