NEW YORK, June 24 (Reuters) - MedImpact's attempt to

recoup about $200 million related to its purchase of Rite Aid's ( RADCQ )

pharmacy benefit unit failed after a judge ruled on

Monday that it took on Elixir's debts when it bought the

company.

U.S. Bankruptcy Judge Michael Kaplan at a hearing in

Trenton, New Jersey said that MedImpact was well aware that

Elixir had been operating with a negative cash balance of about

$200 million for about two years, due to reimbursement payments

it owed to pharmacies including CVS Health ( CVS ) and Walgreens

Boots Alliance ( WBA )

Kaplan had previously approved MedImpact's $575 million

purchase of Elixir, and he ruled that the sale agreement

transferred those debts to the buyer.

Rite Aid ( RADCQ ), one of the largest U.S. pharmacy retailers, filed

for bankruptcy in October citing its high debt, revenue

declines, increased competition, and litigation over its role in

the U.S. opioid crisis as factors that caused its bankruptcy.

The dispute with MedImpact, a pharmacy benefit manager,

had threatened to derail Rite Aid's ( RADCQ ) overall restructuring plan,

which is up for approval at a final court hearing on Thursday,

Kaplan said.

The judge noted that Rite Aid ( RADCQ ) does not have cash to spare,

and said MedImpact had no reason to believe Rite Aid ( RADCQ ) was

agreeing to cover Elixir's old debts at a time when it was

desperately trying to raise cash and shed its own liabilities.

"It is no secret that money in this case is tight, and there

is little wiggle room, let alone over $200 million of wiggle

room," Kaplan said.

Rite Aid's ( RADCQ ) bankruptcy plan would cut $2 billion in debt and

provide $47.5 million to junior creditors, including individuals

and local governments who have sued the company for allegedly

ignoring possible red flags and illegally filling prescriptions

for addictive opioid pain medication.