NEW YORK, June 27 (Reuters) - Rite Aid ( RADCQ ) will ask a U.S.

bankruptcy court to approve its restructuring plan on Thursday,

seeking to cut $2 billion in debt and turn over control of the

company to a group of its lenders.

One of the largest U.S. pharmacy chains, Rite Aid ( RADCQ ) has said

in court filings that the restructuring is the best way to pay

its creditors and emerge from bankruptcy. It will ask U.S.

Bankruptcy Judge Michael Kaplan to sign off on its Chapter 11

plan at a court hearing in Trenton, New Jersey.

Rite Aid ( RADCQ ) used its bankruptcy to close hundreds of stores,

sell its pharmacy benefit company Elixir, and negotiate

settlements with its lenders, drug distribution partner

McKesson, and other creditors, including individuals and

governments that have sued it for allegedly contributing to the

deadly U.S. opioid epidemic.

If the bankruptcy plan is approved, Rite Aid ( RADCQ ) will emerge

from Chapter 11 under the ownership of a group of lenders

including investment funds Brigade Capital and HG Vora.

Rite Aid's ( RADCQ ) restructuring would provide $47.5 million to

junior creditors, including individuals and local governments

that have sued the company over its opioid sales.

Before it filed for bankruptcy, Rite Aid ( RADCQ ) faced 1,600 opioid

lawsuits, including one by the federal government alleging that

the company ignored red flags when filling suspicious

prescriptions for addictive opioid pain drugs.

Rite Aid's ( RADCQ ) bankruptcy proposal still faces several

objections from its insurers, the state of Maryland, and certain

opioid claimants, all of which focus on the pharmacy chain's

treatment of the opioid lawsuits.

Maryland and some opioid claimants argue that Rite Aid ( RADCQ )

should not be able to pay off certain of its lenders while

sweeping opioid lawsuits under the rug, and the insurers say

Rite Aid ( RADCQ ) is leaving them on the hook for future opioid

litigation.

Kaplan will consider those objections before ruling on the

bankruptcy plan.

The company stumbled under its high debt, revenue declines,

increased competition, and opioid litigation, according to its

court filings. It filed for bankruptcy in October 2023, after

reporting $750 million in losses and $24 billion in revenue for

the past fiscal year.

Rite Aid ( RADCQ ), which operated 2,000 pharmacies at the time of its

bankruptcy, expects to emerge from Chapter 11 with a smaller

retail footprint. It closed nearly 600 locations since filing

for bankruptcy, including all of its locations in Ohio and

Michigan.