A bankrupt pharmacy chain now plans more painful closures according to its latest filing made this week, all happening in the same state.
In bankruptcy filings made this week, Rite Aid said they would be closing two additional stores in the Sacramento area.
Rite Aid’s store at 7211 Elk Grove Blvd. in Elk Grove will close on May 20, and 5610 Stockton Blvd. in Sacramento is also scheduled to close on May 20.
The company stated it has neither made nor confirmed any decisions on additional specific store closures at this time.
The company, entangled in over 1,600 lawsuits alleging negligence in monitoring opioid prescriptions, has found common ground with opioid creditors regarding the bankruptcy settlement’s conditions, as articulated by Rite Aid’s legal representative Aparna Yenamandra.
Exclusive voting rights have been granted to bondholders in this bankruptcy scenario, with a deadline set for April 15.
Success in the voting phase would pave the way for the final judicial endorsement of Rite Aid’s bankruptcy restructuring by April 22.
While Rite Aid denies and rebuffs any misconduct in the opioid-related allegations, it is ironing out settlement terms within the reorganization framework, including a pact poised to conclude a probe by the U.S. Department of Justice into the company’s opioid distribution practices.
Initiated in October amidst a $3.3 billion debt challenge, the Pennsylvania-based chain has shuttered many stores already.
The updated bankruptcy blueprint, green-lighted recently, proposes a $2 billion debt reduction and allocates approximately $47.5 million to subordinate creditors, among them individuals and local governments embroiled in litigation against Rite Aid over its opioid handling.
During a judicial session in Trenton, New Jersey, U.S. Bankruptcy Judge Michael Kaplan endorsed Rite Aid’s voting scheme, emphasizing the urgency of progressing with the bankruptcy proceedings to sidestep escalating costs that might force the company into liquidation.
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Other Economy News Today
A major shoe retailer now files an unexpected bankruptcy after being hit with a major inflection point where its survival was not assured.
Shoes for Crews may not be a name everyone knows, but it has been a strong player that provides much-needed products.
The company may not be as high-profile as other footwear makers, but it serves a major need for its customers, reports TheStreet.
“40 years ago, our founder Stan Smith noticed a rise in workplace injuries caused by slip and falls and discovered a need to create a solution that would eliminate the problem.
In 1984, the Shoes For Crews brand was formed, and our slip-resistant outsole technology was invented,” the company shared on its website.
“Since then, we’ve protected millions of workers and lowered workers’ compensation costs for thousands of businesses across the globe.
Today, Shoes For Crews is the industry standard and trusted leader in safety footwear solutions for more than 150,000 companies around the world,” the company added.
However, Shoes for Crews filed voluntary petitions for Chapter 11 relief in the United States Bankruptcy Court for the District of Delaware.
The filing includes a plan for a “value-maximizing sale transaction that will allow for the continued operation of the business, with the resources to invest in growth across key markets globally.”
The company reported in the filing that it had $100 million in assets and $500 million to $1 billion in liabilities.
Shoes for Crews Chief Financial Officer Christopher Sim said “a confluence of factors” led to the Chapter 11 bankruptcy filing.
“They include inflation; a general downturn in retail; a shift away from brick-and-mortar shopping to online buying; and the pandemic, which forced retailers to eat the expense of supporting brick-and-mortar assets,” Retail Dive reported.
“Over time, these factors have tightened the Debtors’ liquidity and complicated their vendor relationships, culminating in a liquidity crisis by the fourth quarter of 2023, when the Debtors faced dwindling cash flows and the inability to access even incremental liquidity,” Sim said.
“The company intends to enter into a stalking horse asset purchase agreement with its first lien-secured lenders to sell the business and enable the continued operation of the business as a going concern under new ownership,” the company shared.
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