Rite Aid Designates 68 Additional Stores for Closure in Chapter 11 Proceedings

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Rite Aid has significantly expanded its store closure plans, designating an additional 68 pharmacy locations across multiple states for shutdown as part of its ongoing Chapter 11 bankruptcy reorganization. The expansion was revealed in a court filing submitted on May 9, 2025, to the U.S. Bankruptcy Court for the District of New Jersey.

The pharmacy chain, which filed for bankruptcy protection on May 5, 2025, is proceeding with what appears to be a substantial downsizing of its retail footprint. According to the court documents, the newly identified closing locations span several states including Pennsylvania (37 stores), California (15 stores), Oregon (6 stores), Washington (5 stores), and others across New York, New Hampshire, Connecticut, New Jersey, and Virginia.

"The Debtors hereby notify you that they have determined, in the exercise of their business judgment, that each store location listed in Exhibit 1 attached hereto shall be an Additional Closing Location," the notice states, referring to the 68 locations slated for closure.

The closures are being conducted pursuant to an Interim Order issued by Bankruptcy Judge Michael B. Kaplan on the same day, which authorizes Rite Aid to assume a consulting agreement with liquidation specialists SB360 Capital Partners, LLC and Hilco Merchant Resources, LLC. These firms will oversee the store closings and related sales of inventory and fixtures.

This latest round of closures follows an initial set of 47 store closings that were identified when Rite Aid initiated its bankruptcy case. The court documents indicate that the retailer is using a phased approach to evaluate its store portfolio and may designate additional locations for closure as its restructuring progresses.

The current bankruptcy represents Rite Aid's second Chapter 11 filing in recent years, following a previous bankruptcy in 2023. During that earlier restructuring, the company closed approximately 800 store locations and conducted hundreds of prescription file sales, according to supporting documentation in the court filing.

"The Debtors commenced these chapter 11 cases to efficiently complete an orderly sale, divest or monetize any assets not sold in auctions, and facilitate an orderly transition for Rite Aid pharmacy customers with minimal disruption in continuity of care, while maximizing recoveries for the benefit of creditors," states the bankruptcy motion accompanying the store closing notice.

Parties wishing to object to the application of the Interim Order to any of the additional closing locations must file a written objection by May 19, 2025. If objections are not withdrawn or resolved, they will be considered at the next regularly scheduled omnibus hearing. A final hearing on the overall store closing motion is scheduled for June 6, 2025, at 11:30 a.m. Eastern Time.

The consulting agreement with SB360 and Hilco outlines the mechanics of the liquidation sales, including a fee structure where the consultants receive a commission of 2% of gross proceeds from the sale of inventory, 0.5% of proceeds from "saleable non-merchandise," and 15% of proceeds from furniture, fixtures, and equipment sales.

The court order allows the sales to proceed free from certain state and local "going out of business" regulations that might otherwise restrict liquidation sales, giving Rite Aid flexibility to conduct the closings efficiently. The order also provides authority for Rite Aid to potentially abandon certain store assets if they cannot be sold economically.

Rite Aid is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP and Cole Schotz P.C. in the bankruptcy proceedings. The case is being heard in the United States Bankruptcy Court for the District of New Jersey under case number 25-14861 (MBK).

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 78 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.



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