Rite Aid, one of the largest pharmacy chains in the United States, had its bankruptcy plan approved by the U.S. Bankruptcy Judge Michael Kaplan on Friday. The approval will see Rite Aid hand over the control to the group of lenders, including Brigade Capital and HG Vora while having $2 billion of its debt wiped out.
Rite Aid declared bankruptcy back in October following losses of $750 million in the previous fiscal year. The pharma chain devised a restructuring plan that would allow the company to move on without shutting down and liquidating its operations. As part of the plan, it closed down hundreds of stores, including all locations in Ohio and Michigan, negotiated settlements with its lenders, and sold pharmacy benefits and services company Elixir.
According to Rite Aid, the approval of the bankruptcy plan will save 28,000 jobs while allowing “critical neighborhood pharmacies” to remain open.
Rite Aid now expects to emerge from bankruptcy in July or early August once the finer details of the plan are ironed out. When that happens, the company will operate 1,300 stores nationwide, down from its previous 2,000 locations. It remains unclear whether the pharma chain plans to close more stores.