Major U.S. pharmacy chain Rite Aid said Sunday that it has filed for bankruptcy and obtained $3.45 billion in fresh financing as it carries out a restructuring plan while coping with falling sales and opioid-related lawsuits.
In 2022, Rite Aid settled for up to $30 million to resolve lawsuits alleging pharmacies contributed to an oversupply of prescription opioids. It said it had reached an agreement with its creditors on a financial restructuring plan to cut its debt and position itself for future growth and that the bankruptcy filing was part of that process.
The plan will “significantly reduce the company’s debt” while helping to “resolve litigation claims in an equitable manner,” Rite Aid said.
Chapter 11 is basically a debt consolidation plan overseen by the courts. It doesn’t wipe out debt, in fact it requires creditors to agree to the plan. It is not just for large companies, small companies use it too.
There is even a version for individuals called Chapter 13. But it’s more useful to companies than individuals, since debt consolidation usually involves selling part ownership of the company and that’s obviously not an option for individuals.
Not yet anyway.