Trust created from pharmacy chain's 2023 bankruptcy cases claims Walgreens owes indemnification for lawsuits related to acquired stores
A trust created from Rite Aid Corp.'s bankruptcy reorganization has sued Walgreens Boots Alliance Inc. and its subsidiary for tens of millions of dollars, claiming the pharmacy giant must reimburse costs from more than 1,600 opioid-related lawsuits under a 2017 asset purchase agreement.
The lawsuit, filed October 3, 2025, in U.S. Bankruptcy Court for the District of New Jersey, represents the latest chapter in the ongoing legal fallout from the national opioid crisis. Thomas A. Pitta, trustee of RAD Sub-Trust A, alleges that Walgreens assumed liability for opioid litigation costs when it purchased 1,932 Rite Aid stores across 24 states and the District of Columbia for an undisclosed sum.
According to the complaint in bankruptcy case number 23-18993 (MBK), Rite Aid spent close to $50 million on legal fees alone defending opioid lawsuits between 2017 and 2023, plus millions more on expert witnesses, consultants, and litigation support services. The company also paid at least $17 million in settlements with private parties as part of resolving its bankruptcy case.
The 2017 Asset Purchase Agreement
The dispute centers on the Amended and Restated Asset Purchase Agreement executed September 18, 2017, under which Walgreens acquired nearly 2,000 Rite Aid locations in staggered closings between October 2017 and March 2018. Under the deal's terms, Walgreens assumed "any Liabilities arising from, related to, or resulting from the ownership or operation of the Purchased Assets prior to the Closing" and agreed to indemnify Rite Aid for related losses.
The trust argues that opioid lawsuits targeting the acquired stores fall squarely within these assumed liabilities since they "arose from allegations of misconduct concerning the sale and dispensing of prescription opioids at stores acquired by Walgreens."
In several jurisdictions, Walgreens' acquisition was so comprehensive that Rite Aid exited entirely. The complaint details that Walgreens purchased 100% of Rite Aid stores in six jurisdictions—D.C., Indiana, Maine, Rhode Island, Utah, and West Virginia—and between 95-99% of stores in eight additional states.
Opioid Litigation Explosion
Starting around 2017, Rite Aid found itself named alongside other major pharmacy chains in what became a massive wave of opioid-related litigation. The lawsuits, many consolidated in federal multidistrict litigation in Ohio, alleged that retail pharmacies contributed to the opioid epidemic through improper dispensing practices, including filling suspicious prescriptions and dispensing excessive amounts of opioids.
The complaint describes how plaintiffs alleged that "pharmacists working at Rite Aid pharmacies filled prescriptions presenting known hallmarks of illegitimate opioid prescriptions ('red flags') and otherwise filled improper prescriptions contributing to abuse and misuse of opioids."
By Rite Aid's October 2023 bankruptcy filing, the company faced more than 1,600 cases brought by states, counties, municipalities, Native American tribes, hospitals, and other entities seeking billions in damages and funding for addiction treatment programs.
Insurance Coverage Battle
Before seeking indemnification from Walgreens, Rite Aid first attempted to obtain coverage from its general liability insurers, referred to collectively as "Chubb" in the complaint. The insurers denied coverage in 2018, triggering a separate lawsuit that wound through Delaware courts for over three years.
The Delaware Supreme Court ultimately ruled in January 2022 that Rite Aid's insurers had no duty to defend in opioid lawsuits that didn't seek personal or bodily injury damages, allowing the coverage denial to stand.
Walgreens' Refusal
Following the insurance court ruling, Rite Aid formally demanded payment from Walgreens in a June 7, 2022 letter, providing a list of hundreds of opioid lawsuits in states where Walgreens had acquired Rite Aid stores.
Walgreens refused in a June 17, 2022 response, arguing that the opioid lawsuits concerned "corporate policy and procedure, rather than specific stores" and therefore fell outside the assumed liabilities provision. The company also claimed Rite Aid couldn't prove how specific liabilities traced back to particular stores and asserted it was prejudiced by the timing of Rite Aid's notice.
Rite Aid countered that the underlying conduct in opioid lawsuits "concerned misconduct at the Acquired Stores, such as alleged improper opioid dispensing practices and failures to report suspicious prescriptions." The company also noted that the asset purchase agreement doesn't require tracing liabilities to specific stores and that Walgreens couldn't claim prejudice since both companies were co-defendants in many of the same lawsuits.
Rite Aid further argued that a conflict of interest prevented Walgreens from controlling its defense strategy, as allowed under the agreement when no conflict exists.
Bankruptcy and Trust Formation
Rite Aid filed for Chapter 11 bankruptcy protection on October 15, 2023. The bankruptcy court confirmed the company's reorganization plan on August 16, 2024, which became effective August 30, 2024.
The plan established multiple creditor trusts, including RAD Sub-Trust A, which received the company's legal claims as assigned assets. The trust now has exclusive standing to pursue these claims on behalf of Rite Aid's estate and creditors.
Legal Claims and Next Steps
The lawsuit asserts two main claims against Walgreens: breach of contract for failing to pay assumed liabilities, and breach of the contractual indemnification provision for refusing to reimburse Rite Aid's opioid litigation losses.
The trust is represented by attorneys from Emmet, Marvin & Martin, LLP and Herbert Smith Freehills Kramer (US) LLP. The complaint seeks damages "to be proven at trial," attorney fees, and prejudgment interest.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 21 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.