US drugstore chain Rite Aid is seeking approval for its bankruptcy restructuring plan, aiming to reduce its debt by $2bn.
The plan would transfer company control to a group of lenders.
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In a court filing, the company stated that the restructuring is the optimal path to repay its creditors and successfully exit bankruptcy.
The hearing, presided over by US bankruptcy Judge Michael Kaplan, is scheduled to take place in Trenton, New Jersey.
Rite Aid has shut down numerous stores during its bankruptcy. It has divested its pharmacy business, Elixir, and reached settlements with lenders including drug distributor McKesson.
These creditors include parties involved in lawsuits accusing the company of contributing to the US opioid crisis.
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By GlobalDataIf Judge Kaplan approves the plan, Brigade Capital and HG Vora, among other investment funds, will assume ownership of Rite Aid post-Chapter 11.
The proposed restructuring would allocate $47.5m to creditors, encompassing individuals and local governments that have sued Rite Aid regarding opioid sales.
Before bankruptcy, Rite Aid was contending with 1,600 opioid-related lawsuits, including a federal case alleging negligence in dispensing opioid prescriptions.
The company’s bankruptcy proposal is also being challenged by insurers, the state of Maryland and some of its opioid claimants, who criticise the handling of opioid lawsuits within the plan.
Rite Aid, which declared bankruptcy in October 2023 after a fiscal year in which it made $750m in losses on $24bn in revenue, operated 2,000 pharmacies at the time of filing.
Post-restructure, the company anticipates a reduced retail presence, having closed 600 stores, including all outlets in Ohio and Michigan.
In March 2024, a US judge authorised the commencement of the voting process on Rite Aid’s bankruptcy restructuring plan.
