Ten Rite Aid pharmacy locations on Long Island are slated to close after the company filed for bankruptcy due to slumping sales and paying millions of dollars in opioid epidemic lawsuit settlements.
The company said Rite Aid stores will continue to fill prescriptions, and customers will still be able to visit its locations or shop online while it goes through its voluntary Chapter 11 process. But that process also will allow it to speed up its plan to close underperforming stores.
Going through Chapter 11 will help “significantly reduce the company’s debt” while helping to “resolve litigation claims in an equitable manner,” Rite Aid late Sunday.
The Philadelphia-based company will close nearly 100 of its more than 2,000 stores nationwide, including 17 in New York State. Its bankruptcy comes as the company is marking its 60th anniversary in business. It has said it expects a net loss of as much as $680 million in the current fiscal year, which will end next spring.
The company, like its rivals, also faces financial risk from lawsuits over opioid prescriptions. Rite Aid already has reached several settlements.
In March, the U.S. Justice Department intervened in a whistleblower lawsuit brought by former employees under the False Claims Act. Federal officials said in a statement that the drugstore chain filled “at least hundreds of thousands” of illegal prescriptions for drugs including opioids.
Rite Aid called the government’s claims “hyperbolic” in a subsequent motion to dismiss. The company said facts alleged in the case actually showed it exceeded regulatory requirements for diversion control.
The company’s filing in U.S. Bankruptcy Court in New Jersey listed $8.6 billion in total debts and $7.6 billion in assets.
Rite Aid said Sunday that it had reached an agreement with some key creditors on a financial restructuring plan to cut its debt. The company also said it obtained $3.45 billion in fresh financing from some of its lenders, which will help support the company through the Chapter 11 process.
The Long Island Rite Aid locations slated to close are:
836 Sunrise Hwy., Bay Shore
901 Merrick Rd., Copiague
577 Larkfield Rd., East Northport
2 Whitney Ave., Floral Park
3131 Hempstead Tpke., Levittown
700-43 Patchogue-Yaphank Rd., Medford
593 Old Town Rd., Port Jefferson
101 Main St., Sayville
65 Route 111, Smithtown
397 Sunrise Hwy., West Patchogue
-With Associated Press