Rite Aid just filed for bankruptcy and could be closing more of its 2,100 stores

• Rite Aid filed for bankruptcy in New Jersey on Sunday.
• The pharmacy chain could close more of its 2,100 stores and has named a new CEO.

Rite Aid filed for voluntary Chapter 11 bankruptcy in New Jersey on Sunday amid a slew of opioid-related lawsuits. The move could see the drugstore chain close more of its 2,100 stores.

In March, the US Justice Department sued Rite Aid and its subsidiaries, accusing the company of missing "red flags" when pharmacists filled opioid prescriptions.

Rite Aid filled hundreds of thousands of prescriptions that did not meet legal requirements, Vanita Gupta, the associate attorney general, said in the complaint. "Rite Aid's pharmacists repeatedly filled prescriptions for controlled substances with obvious red flags, and Rite Aid intentionally deleted internal notes about suspicious prescribers. These practices opened the floodgates for millions of opioid pills and other controlled substances to flow illegally out of Rite Aid's stores."

Rite Aid has sought to dismiss the department's lawsuit and denied allegations that it filled unlawful opioid prescriptions.

A company spokesperson told the Wall Street Journal: "We expect to negotiate a resolution of the opioid-related lawsuits with the various parties involved."

"We also intend to resolve our legacy contract disputes, government investigations, and securities matters," the spokesperson said. Representatives for Rite Aid did not immediately respond to a request for comment from Insider.

Slowing sales and a string of store closures

In addition to the opioid-related litigation, the company has struggled with slowing sales and a mounting debt burden.

Rite Aid reported revenues of $5.7 billion in the quarter ended June, down from $6 billion in the same period last year, per company filings.

The company lowered its outlook for the current fiscal year and warned investors it expects to report net losses between $650 million and $680 million during the year.

Rite Aid listed $3.3 billion in debt as of June, not counting the pending opioid litigation. That's an increase from $2.9 billion as of March. The pharma chain and its senior secured debt holders have agreed terms of a financial restructuring that would "significantly reduce" its debt, the company said in a statement on Sunday.

Rite Aid has closed more than 200 stores in the past two years and previously proposed that it could close roughly 400 to 500 stores in bankruptcy.

In a statement on Sunday, the company said it would close additional stores, saying that "these efforts will further reduce the company's rent expense and are expected to strengthen its overall financial performance." It did not specify how many stores it would be closing.

A&G Realty Partners is helping the company with its store closing and lease restructuring program.

In a bankruptcy court filing seen by Insider, the company listed estimated assets and liabilities in the range of $1 billion to $10 billion. Rite Aid has received a commitment for $3.45 billion in new financing from some of its lenders.

Jeffrey S. Stein, the head of a financial advisory firm, has been appointed as the chief executive officer, chief restructuring officer, and a member of the company's board, effective immediately, according to a company statement.

The current interim CEO, Elizabeth Burr, is to remain on the board.

The company employs around 47,000 people.

October 16, 2 a.m. EDT: The story has been updated with details throughout.