US-based drugstore chain Rite Aid is proposing to close approximately 400 to 500 stores in bankruptcy.
Citing people familiar with the development, the Wall Street Journal (WSJ) reported that the retailer is engaged in discussions over the terms of a bankruptcy plan with creditors.
The plan may involve putting a significant number of its stores into liquidation.
Rite Aid, which operates more than 2,300 drugstores, is reportedly willing to divest or hand over the control of its remaining operations to creditors.
In addition, Rite Aid has more than $3.3bn in debt.
Forbes quoted a Rite Aid spokesperson as saying: “Given the conversations remain ongoing, no decisions have been made at this time and we are focused on reaching an agreement with our financial stakeholders that will make Rite Aid stronger.”
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News of the closure comes almost a month after reports emerged that the retailer was reportedly preparing to file for bankruptcy amid several opioid lawsuits.
In March this year, the US Justice Department filed lawsuits against the retailer for allegedly fuelling the country’s opioid epidemic. The department said that the company knowingly added prescriptions for painkillers that failed to meet legal requirements.
Associate Attorney General Vanita Gupta said: “According to our complaint, Rite Aid’s pharmacists repeatedly filled prescriptions for controlled substances with obvious red flags and Rite Aid intentionally deleted internal notes about suspicious prescribers. These practices opened the floodgates for millions of opioid pills and other controlled substances to flow illegally out of Rite Aid’s stores.”
The WSJ added that the company also faces several federal lawsuits that were consolidated in Ohio and other pending litigations in state courts.