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Rite Aid fails to locate buyers for customer files at 200

stores

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Prescription files to be transferred to competitors

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Sale price remains confidential

By Sabrina Valle and Dietrich Knauth

May 21 (Reuters) - Bankrupt Rite Aid on

Wednesday received court approval to close stores and sell most

of its pharmacy assets in separate transactions to CVS,

Walgreens, Albertsons ( ACI ), Kroger ( KR ) and Giant Eagle, among others.

The U.S. pharmacy chain, which operates about 1,200 stores

and has some 8 million customers, filed for bankruptcy earlier

this month for the second time in two years. Its retail business

was performing poorly due to decreased drug sales margins.

U.S. Bankruptcy Judge Michael Kaplan approved a fire sale

for the assets Rite Aid had found buyers for in a court hearing

in Trenton, New Jersey, prioritizing the transfer of

prescription services for its customers over store landlords.

The sale price has not been disclosed.

Rite Aid said it will sell customer prescription files to 13

buyers, including CVS, Walgreens, Albertsons ( ACI )

, and Kroger ( KR ). Rite Aid's attorney Alice Eaton said

the quick transfer of pharmacy customers' prescription files

accomplished one of the company's primary goals in bankruptcy.

Rite Aid has buyers for customer files at 810 of its stores,

but failed to locate buyers for the files at 200 others, Eaton

said. CVS is the largest buyer, and has also agreed to acquire

64 store locations in addition to taking over prescriptions for

Rite Aid customers at 650 other locations.

Shmuel Klein, an attorney who represents three Rite Aid

landlords, objected to the sale, saying that Rite Aid should

disclose who bought what and for how much, so that landlords

know how the bankruptcy will affect their lease payments.

"We still don't know what leases were bought," Klein said.

"It's not even half baked - it's sort of a raw hamburger we're

getting served here."

Judge Kaplan overruled the request, saying the public

interest in ensuring the transfer of prescriptions from one

pharmacy facility to another was of utmost importance.

"I think you would agree I cannot delay or defer that

process to address specific landlord issues," Kaplan said.

The Pennsylvania-based company entered bankruptcy with over

$2 billion in debt, and it warned employees about likely job

cuts earlier this month.

Rite Aid had previously filed for Chapter 11 protection in

October 2023 after reporting $750 million in losses for the

previous fiscal year.

The company used its previous bankruptcy to cut $2 billion

in debt, close hundreds of stores, sell its pharmacy benefit

company Elixir, and negotiate settlements with its lenders, drug

distribution partner McKesson and municipalities that

had sued Rite Aid for allegedly filling suspicious prescriptions

for addictive opioid drugs.