Major Drugstore Chain Rite Aid Reportedly Prepares for Bankruptcy Filing
Rite Aid Corporation is a nationwide drugstore chain that ranked No. 148 in the Fortune 500 list of the largest United States corporations by total revenue. Now the company reportedly prepares to file Chapter 11 bankruptcy to restructure its $3.3 billion debt and to better protect against lawsuits alleging the company helped fuel the country’s opioid crisis by knowingly filling prescriptions for painkillers that did not meet legal requirements. Recently, S&P Global downgraded Rite Aid, and its stock price dipped more than 50% after reports on its pending bankruptcy filing were published. Other American retail chains like Tuesday Morning, Christmas Tree Shops, and Bed Bath & Beyond faced financial distress due to declining sales, but Rite Aid faces additional pressure because of its opioid lawsuits. Rite Aid reportedly operates more than 2,330 stores in 17 states which would be impacted by its bankruptcy filing.
WeWork Hires Professionals for Restructuring and Faces Delisting on the New York Stock Exchange
WeWork continues to warn of its potential bankruptcy filing as it reportedly retained professionals for bankruptcy or other restructuring options and now faces delisting on the New York Stock Exchange. WeWork reportedly has hundreds of locations in the U.S., many of which are located in New York, that would be impacted by its bankruptcy filing. R&E’s Head of Bankruptcy & Reorganization, John D. Giampolo, was quoted in a recent Bisnow article regarding WeWork’s potential bankruptcy filing.
U.S. Corporate Bankruptcies Projected to Reach Biggest Increase in Over a Decade
Recent data reflects that Chapter 11 bankruptcy filings in the U.S. are projected to see the biggest increase in more than a decade.
How to Protect Yourself
R&E frequently represents landlords, lenders and other parties in such major retail bankruptcies, as well as middle market size bankruptcies across various industries, to assess their risks and rights and to formulate strategies for recovery and liquidity concerns, including how best to access and apply security deposits or letters of credit, as well as other businesses concerned about the present and potential future impact of the unique challenges faced in the current economic climate. Accordingly, now would be a good time for you to conduct a review of any contract, loan and/or security agreements with any potentially troubled counterparties. Feel free to contact your trusted R&E attorney or John D. Giampolo, Member & Head of the firm’s Bankruptcy & Reorganization Department, to assess your risks and rights, to assist with any lease review and to formulate strategies to best serve you.