Rite Aid Corp. is preparing to file for bankruptcy in coming weeks to address lawsuits the drugstore chain is facing over its alleged role in the sale of opioids, the Wall Street Journal reported on Friday, citing people familiar with the plan.
Shares of the pharmacy retail chain operator closed down 51% at 71 cents.
The Chapter 11 filing would cover Rite Aid’s more than $3.3 billion debt load and pending legal allegations that it oversupplied prescription painkillers, the newspaper reported.
Rite Aid did not immediately respond to a Reuters request for comment.
Regionally focused Rite Aid operates more than 2,330 stores in 17 U.S. states, although it is much smaller than rivals like Walgreens Boots Alliance WBA.O and CVS Health CVS.N.
Along with other pharmacy chains, Rite Aid has been named a defendant in lawsuits that alleged they helped fuel the opioid crisis in the United States.
The U.S. Department of Justice in March sued Rite Aid, accusing the pharmacy chain of missing “red flags” as it illegally filled hundreds of thousands of prescriptions for controlled substances, including opioids.
The company is also facing lawsuits over opioids by state and local governments around the country. Other pharmacies, drugmakers and distributors have reached nationwide settlements of similar claims totaling more than $50 billion.
Rite Aid has not reached any nationwide settlement, though it has struck some smaller deals including a $10.5 million agreement with several counties last year.
More than 900,000 people have died of drug overdoses in the United States since 1999, with opioids playing an outsized role, according to data from the U.S. Centers for Disease Control and Prevention.
(Reporting by Mariam Sunny and Khushi Mandowara in Bengaluru; Editing by Pooja Desai, Maju Samuel and Jonathan Oatis)
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