Rite Aid Settles With California; Emerges From Bankruptcy

California Settlement: Over 100 Rite Aid stores were closed in California, forcing the state’s Attorney General, Rob Bonta, to take efforts to prevent the growth of pharmacy deserts, particularly among low-income patients. A settlement has been reached with Rite Aid that resolves competition-related concerns and ensures that remaining Rite Aid stores provide medication and healthcare services to Californians. Additionally, the settlement enables the Attorney General to review ownership changes of the remaining stores. Under the settlement, Rite Aid agreed to a variety of conditions for the next 5 years, including: using reasonable methods to maintain the remaining Rite Aid stores, providing 90-day notice of sale or closure of remaining stores, providing financial assistance to patients if commercially reasonable to do so, and continuing participation in Medi-Cal and Medicare if commercially reasonable. The chain must also comply with staffing requirements, such as: ensuring compliance with state staffing levels, making efforts to continue to pay retirement contributions, abstain from contesting unemployment for people laid off as a result of the sale or closure of Rite Aid stores, and maintain a preferential hiring list for all employees from stores that have closed.

“Pharmacies are often the most accessible healthcare providers, offering vital services for the well-being of individuals and families. Without them in our communities, Californians could face significant barriers in managing chronic conditions, receiving timely medications, and accessing preventative care,” said Attorney General Bonta in a statement. He credited the settlement and conditions required by it for allowing Californians who use Rite Aid pharmacies to “continue accessing their medications and essential healthcare services they need to live healthy and fulfilling lives.”

Rite Aid Emerges from Chapter 11: In early September 2024, Rite Aid announced that it had completed its financial restructuring as required by Chapter 11 bankruptcy and was emerging as a private company. Ownership of the company was transitioned to certain Rite Aid creditors, and all of the company’s existing common shares were cancelled.

The chain also announced a change in management, with Matt Schroeder, who most recently was the Chief Financial Officer, taking the reins as Chief Executive Officer.

References

Rite Aid. Rite Aid completes restructuring process and emerges from Chapter 11. News release. September 3, 2024. Accessed September 12, 2024. https://news.riteaid.com/press-releases/press-release-details/2024/Rite-Aid-Completes-Restructuring-Process-and-Emerges-from-Chapter-11/default.aspx

State of California, Department of Justice. Attorney General Bonta announces settlement agreement with Rite Aid Corporation to continue providing essential pharmacy services statewide. News release. August 19, 2024. Accessed September 12, 2024. https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-settlement-agreement-rite-aid-corporation