A Popular Drug Store Chain Is Nearing Bankruptcy as Opioid Lawsuits Mount and Financial Woes DeepenThe pharmacy chain Rite Aid first opened in Pennsylvania in 1962.

Rite Aid is on the brink of filing for bankruptcy amid mounting federal and state lawsuits regarding opioid-related settlements, which have resulted in increasing debt,The Wall Street Journalreported.

The pending bankruptcy filing follows a period of difficulties for Rite Aid over the past five years, including store closures (145 last year alone) and unsuccessful attempts at mergers with competitors likeWalgreensandAlbertsonsin 2017 and 2018, respectively.

Now, Rite Aid is facing over a thousand federal lawsuits, consolidated in Ohio, along with multiple state court cases that accuse the company of contributing to the opioid epidemic. Additionally, the Justice Department has filed a civil lawsuit, alleging negligence in handling opioid prescriptions and violations of the False Claims Act and Controlled Substances Act.

Rite Aid has denied the allegations and sought the dismissal of the department's lawsuit. Filing for bankruptcy would pause these legal actions and provide Rite Aid with a means to address them within a single framework, theWSJadded.

According to the drugstore chain's lastearnings reportreleased in June, Rite Aid's revenue declined by nearly 6% and experienced a net loss of $306.7 million — almost triple from $110.2 million for the same period a year prior.

Related:Purdue Pharma to Plead Guilty to Multiple Federal Charges

The potential Chapter 11 filing would encompass Rite Aid's $3.3 billion debt and ongoing legal claims surrounding the allegation that the chain contributed to an oversupply of prescription painkillers, theWSJadded.

Rite Aid is among a myriad of retailers (Walmart, CVS, Walgreens) thatsettled opioid-related lawsuits, paying over $13 billion collectively.

Meanwhile, drug manufacturers Purdue Pharma, Mallinckrodt, and Endo International, have also declared bankruptcy due to opioid-related litigation.

Mallinckrodt, having initially committed $1.7 billion to opioid plaintiffs during its Chapter 11 restructuring last year, is now on thepath towards a subsequent bankruptcy, leaving about $1 billion of that commitment unpaid. Similarly, Endo is encountering governmentoppositionto its proposal to gradually pay $450 million to state governments and $119 million to private plaintiffs.

Related:CVS, Walgreens Agree to $10 Billion Settlement Related to Opioid Crisis

At the center of the epidemic — and the subsequent lawsuits — is the Sackler family, founders and owners of Purdue Pharma. The Supreme Court hashaltedPurdue's $6 billion settlement with the Sackler family as it examines potential legal flaws in the Chapter 11 plan, considering whether bankruptcy courts have the authority to approve settlements that protect third parties (like Purdue's owners) from legal claims.