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A bankruptcy court in the U.S. has cleared a restructuring plan forwarded by Rite Aid (OTC:RADCQ) to avoid liquidation and cut its debt by $2B in exchange for handing its control to a group of lenders.
At a court hearing in Trenton, New Jersey, on Friday, bankruptcy judge Michael Kaplan approved the plan, which also includes settlements to resolve more than 1,000 lawsuits related to its alleged role in the U.S. opioid crisis.
Judge Kaplan gave the go-ahead, noting that the deal would avoid a complete shutdown of Rite Aid’s (OTC:RADCQ) business. “If we can’t get it done now, we’re simply never going to get it done,” Rite Aid attorney Aparna Yenamandra told the court, according to Reuters.
She added that 28,000 jobs would be on the line if the plan is not cleared. Rite Aid (OTC:RADCQ), which filed for bankruptcy last year to restructure its debt, among other purposes, expects to emerge from bankruptcy in about a month with access to about $2.55B in exit financing from its lenders, Yenamandra said.