Rite Aid Files for Bankruptcy for the Second Time in Two Years

UPDATE: Rite Aid Closing Hundreds More Stores. Here's the Full List

Rite Aid is back in bankruptcy court, filing for Chapter 11 protection on Monday, May 5 — just seven months after it emerged from its last bankruptcy in September 2024. 

Here's everything you need to know. 

The pharmacy giant announced Monday it would seek Chapter 11 protection in New Jersey to restructure and reorganize its debts — marking its second bankruptcy filing in under two years. 

CEO Matt Schroeder blamed financial difficulties "intensified by the rapidly evolving retail and healthcare landscapes." In other words, Rite Aid’s earlier restructuring efforts didn't fully resolve the company’s deeper problems. 

For now, yes. Rite Aid operates around 1,240 stores across 15 states and secured $1.94 billion in new financing to keep its pharmacies running smoothly through bankruptcy proceedings. However, layoffs are likely on the horizon. Schroeder warned employees in an internal memo, first reported by Bloomberg News, that job cuts are inevitable because additional lender financing didn't materialize. 

Rite Aid’s financial woes aren’t new. The chain first filed for bankruptcy in October 2023 under nearly $4 billion in debt, fueled largely by costly opioid lawsuits. Though the company managed to cut $2 billion in debt, sell its pharmacy benefits unit, Elixir, and close about 500 stores, it still exited bankruptcy last September with $2.5 billion remaining debt. Neil Saunders, managing director at GlobalData, wasn’t surprised, explaining, "The first bankruptcy did little to resolve the chain’s issues, and it has been teetering on the edge of survival for quite some time." 

CEO Schroeder said there’s "meaningful interest" from potential buyers, but a full takeover seems unlikely. Walgreens once tried to buy Rite Aid outright in 2015 for $17 billion, but regulators stepped in, limiting the deal to fewer than 2,000 stores. 

According to Saunders, a similar situation might happen again, with competitors selectively acquiring Rite Aid’s best locations rather than purchasing the entire company. 

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