Drugstore Chain Rite Aid Counters DOJ Lawsuit Amid Bankruptcy, Aiming To Safeguard Restructuring

Rite Aid Corp RADCQ, currently undergoing bankruptcy proceedings, has reportedly taken a legal stance against the U.S. Department of Justice (DOJ) by suing them to halt a lawsuit alleging the pharmacy chain's involvement in illegally dispensing addictive opioid prescriptions. 

The move comes as Rite Aid seeks to shield itself from the DOJ lawsuit that could potentially jeopardize its restructuring efforts.

In a complaint filed in New Jersey bankruptcy court, Rite Aid emphasized the DOJ's refusal to pause its lawsuit following Rite Aid's bankruptcy declaration, a move that the company claims undermines its restructuring endeavors. 

Seeking equitable treatment with other opioid plaintiffs, Reuters noted, Rite Aid requested that the bankruptcy court prevent the DOJ lawsuit from advancing during its bankruptcy status.

The DOJ has contended that U.S. bankruptcy law does not impede its ability to pursue legal action through its lawsuit, asserting its authority to exercise "police powers." Rite Aid contests this position and urges Bankruptcy Judge Michael Kaplan to adjudicate this matter rather than the judge overseeing the DOJ's case in federal court.

With approximately 2,000 retail pharmacies across 17 states, Rite Aid initiated bankruptcy protection and resolved over 1,600 lawsuits alleging improper dispensation of opioid medications.

During a court hearing, a committee representing opioid plaintiffs cautioned U.S. Bankruptcy Judge Michael Kaplan about potential repercussions from Rite Aid's bankruptcy, warning that victims of the alleged opioid overselling might receive no compensation. This concern arises as Rite Aid's bankruptcy may result in no payout to those affected by the company's purported reckless opioid sales.

Meanwhile, Rite Aid's legal counsel differentiated its case from other opioid-related bankruptcies like Endo or Purdue, emphasizing the urgency to swiftly conclude a settlement due to the substantial costs associated with its retail operations.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.