Rite Aid Goes Bust...West Coast Stores??

[SO_CAL_RETAIL_SLUT]

Let's see...naysayers were complaining that Mr. Murdoch, owner of the Wall Street Journal and his reporters were publishing false information that Rite Aid would file bankruptcy. The WSJ was correct in publishing factual information. I'm glad the WSJ was re-affirmed in their reporting.

Anyone who follows RAD - and uses business sense knew the chain was at the end of the line - financially speaking.

Bottom line - Rite Aid has gone bust and filed bankruptcy. Some call this a "restructuring" or "pre-packaged/jump-the-shark" bankruptcy. RAD still went bust.

From the first day bankruptcy filings, even though RAD has received a cash "lifeline", I don't see where all major creditors are on-board. At least from the initial filings and orders, looks to be a "messy" bankruptcy. We'll see what the next 10, 30, 60 and end of year looks like operationally and financially.

From the financing RAD has received, it appears that they have leveraged every single thing they could use as collateral - down to the last empty prescription pill bottle and roll of register receipt paper. Reminds me when TWA needed cash and they offered spare lightbulbs as collateral...lol

What's the general feeling? Will the west coast Rite Aid, Thrifty Payless and Bartell locations be shuttered or sold? Will this happen during the next 30/60+ days, end of calendar year 2023. or off the books by the end of the fiscal year in March 2024? If the stores are sold as a going concern, who would purchase them? As a package? Piecemeal by region/area? Onesies, twosies, etc.? The individual stores themselves in most cases do not have a high net worth or value.

There is enough time to get the WARN notices out to close-up shop on the west coast for an orderly shutdown by December 31, 2023.

Has anyone heard from the UFCW? What have they done or doing for their members, not only on the west coast, but all areas where locations have been shutdown? If you're a bargaining unit member and your union local participates in the joint Employer-Union Drug Trust Fund, I would be making urgent calls and inquiries to find out the status of the fund(s) and if RAD has been making their contractually agreed to payments for health, welfare and pension benefits.
Hold your local union Secretary-Treasurer and President accountable - you are paying their salaries through the collection of dues from your paycheck.

Where in the hell am I going to get my Thrifty Ice Cream?

SO_CAL_RETAIL_SLUT

[jamcool]

Someone will probably pick up the Thrifty ice cream brand-although it may no longer be made in California. When Albertsons made an attempt to buy RiteAid, they were planning to move the ice cream production to Albertsons dairy plant in Phoenix.

[BillyGr]

They said they might close 400 stores, but that certainly does NOT mean that every location in the West would be closed (since there are 449 in California alone out of their 2,054 left on their store listing).

Then some in OR, WA and ID also listed (190 total for those).

[reymann]

i wonder if rite aid ends up divesting stores before they start shuttering stores. i wonder if selling thrifty ice cream to a distributor like C&S is a possibility.

[retailfanmitchell019]

I think Thrifty Ice Cream would be a great fit for Stater Bros.

[SO_CAL_RETAIL_SLUT]

I think Thrifty Ice Cream would be a great fit for Stater Bros.

In southern California, most Smart & Final and Smart & Final Extra locations carry Thrifty ice cream in a 3 gallon tub, usually vanilla. Some locations will carry other flavors - usually though it's just vanilla. For me, I want and demand other flavors!

The new RAD CEO is supposed to leave no stone left unturned, we'll see. Maybe, he and his small team will look for a quick sale of the Thrifty Ice Cream Brand and plant. If not the plant, for sure the Thrifty Ice Cream trade name.

SO_CAL_RETAIL_SLUT

[ClownLoach]

OK since everyone is having panic attacks over the ice cream, it's going to be fine. If anything, it's an asset that is growing and has significant capacity to increase production according to this new article which means more sales and profits to be made.

https://la.eater.com/2023/10/17/2387091 ... SELq2u2kB8

[ClownLoach]

Let's see...naysayers were complaining that Mr. Murdoch, owner of the Wall Street Journal and his reporters were publishing false information that Rite Aid would file bankruptcy. The WSJ was correct in publishing factual information. I'm glad the WSJ was re-affirmed in their reporting.

Anyone who follows RAD - and uses business sense knew the chain was at the end of the line - financially speaking.

Bottom line - Rite Aid has gone bust and filed bankruptcy. Some call this a "restructuring" or "pre-packaged/jump-the-shark" bankruptcy. RAD still went bust.

From the first day bankruptcy filings, even though RAD has received a cash "lifeline", I don't see where all major creditors are on-board. At least from the initial filings and orders, looks to be a "messy" bankruptcy. We'll see what the next 10, 30, 60 and end of year looks like operationally and financially.

From the financing RAD has received, it appears that they have leveraged every single thing they could use as collateral - down to the last empty prescription pill bottle and roll of register receipt paper. Reminds me when TWA needed cash and they offered spare lightbulbs as collateral...lol

What's the general feeling? Will the west coast Rite Aid, Thrifty Payless and Bartell locations be shuttered or sold? Will this happen during the next 30/60+ days, end of calendar year 2023. or off the books by the end of the fiscal year in March 2024? If the stores are sold as a going concern, who would purchase them? As a package? Piecemeal by region/area? Onesies, twosies, etc.? The individual stores themselves in most cases do not have a high net worth or value.

There is enough time to get the WARN notices out to close-up shop on the west coast for an orderly shutdown by December 31, 2023.

Has anyone heard from the UFCW? What have they done or doing for their members, not only on the west coast, but all areas where locations have been shutdown? If you're a bargaining unit member and your union local participates in the joint Employer-Union Drug Trust Fund, I would be making urgent calls and inquiries to find out the status of the fund(s) and if RAD has been making their contractually agreed to payments for health, welfare and pension benefits.
Hold your local union Secretary-Treasurer and President accountable - you are paying their salaries through the collection of dues from your paycheck.

Where in the hell am I going to get my Thrifty Ice Cream?

SO_CAL_RETAIL_SLUT

Ice cream is going to be fine, see the new Eater LA article about that cash cow.

Seriously, to be very honest you're not making any sense here whatsoever. I was extremely skeptical about Rite Aid and expected them to get dragged kicking and screaming into bankruptcy while denying any problems and claiming business as usual just looking for new investors/buyers like BB&B. And it turned out they were spending all their time organizing the creditors and working with them to cement a prepackaged bankruptcy deal which means they go forward with no issues.

How could you possibly reach any other conclusion? The people they owe money to have already agreed to the deal, and they've already made the Stalking Horse bid. Who's going to object? Walgreens? CVS? The New York Post? Nobody is going to stop this deal, and as we've seen the drugstore industry is the rare and unusual place that liquidators like Hilco do not want to mess with buying in Chapter 11 to make a profit on the sale of the assets. The Stalking Horse bid is basically the $3.45 billion amount offered as credit which becomes equity. There isn't enough merchandise, fixtures, etc. for liquidators to offer a higher amount to take the company out of business unless they want to lose billions. They would offer a few hundred million... They've been outbid by billions already.

It has already been firmly established that the shareholders lose everything, and the creditors take over the company as a GO FORWARD ENTITY called "Rite Aid Retail 2.0". Furthermore, they HAD to use bankruptcy to prevent the risks of selling assets like Elixir from being unraveled through the court system in a possible lawsuit judgment on opiates. The courts CAN and DO reverse mergers, purchases and sales and nobody could buy Elixir or anything else without the process in which bankruptcy courts make the asset sales "free and clear" to protect the buyer. Businesses do this all the time because of the protections provided by the restructuring process and there is no other workaround.

The sale of the company to the creditors also requires bankruptcy protection even if they are not actually bankrupt due to the UNKNOWN amount of a potential judgment. The fact that Rite Aid got BILLIONS in new financing versus a few million which is what most companies get indicates that they will be fine. What will happen is all wanted/go forward stores along with the Rite Aid brand and trademarks, IP etc will be sold to a new company owned by the creditors called "Rite Aid Retail 2.0" and anything that is closing, such as the additional 400 or so stores plus DCs or offices or whatever stay with the original Rite Aid company which is ultimately reduced to a folder in a file cabinet somewhere. "Rite Aid Retail 2.0" winds up renaming itself Rite Aid Corporation, the previous bankrupt Rite Aid Corporation will get named something like OldCo Drug and disappear into the dust with the unwanted closed stores.

There is a major vendor pissed off and threatening not to service them, McKesson. That is their policy that they don't ever reach terms prior to filings and they always fight for additional concessions in bankruptcies. Some companies do that. Coca-Cola also has the same policy and won't deliver to any business in a reorganization unless they've got a new contract already agreed to for the post-bankruptcy process. This is stuff that will resolve itself. Landlords of closing stores will all sue to demand millions of dollars, which they must do as a matter of practice to be reimbursed by their insurers, and they'll be told by the court as per the law "pound sand, lease is hereby rejected" so they can take that back to their insurer and get their check. All of this is typical.

Rite Aid didn't "go bust" and you should be ashamed of yourself for that preposterous and misleading headline. People like you are the ones who screw up the entire market and create the false perception that ordinary court activities which under current law fall under the jurisdiction of the Bankruptcy Court mean failure, actually being broke, and going under. Belk also filed bankruptcy and was out of court like a day later. Same for Davids Bridal. Many companies PROACTIVELY file bankruptcy as part of normal mergers and you just don't see it in the headlines as they want to make sure the "sins of the past" can't come back and result in the new ownership assuming unknown liabilities. Your comments are hurtful to the employees at the company who have the added burden of educating their customers that they're not going to go out of business but rather they signed a merger deal with their creditors, and furthermore will be stronger when this is done than they were before as a result.

The only party with any standing with the court who could block this transaction is the Justice Department, if they decided they want to try to squeeze the turnip for blood and kill Rite Aid for a few pennies. I highly doubt that the politicians are going to want headlines to that effect since it would literally be "Gov't Fines Rite Aid Out of Business" and "DOJ Destroys Large Union Retailer". They haven't pursued that path with larger, deep pocketed opiate manufacturers who have already emerged from bankruptcy and I highly doubt they would waste their time looking for a few pennies from Rite Aid that would have a great cost politically.

There are already articles being published, even from sources I don't care for like Axios, talking about how great this creditor acquisition deal is and how Rite Aid is going to emerge smaller but so much stronger financially which should give them the ability to compete again with the big guys. Couple that with the struggles of Walgreens and Rite Aid has a good chance to obtain #1 or more likely #2 status in the markets they serve.

[ClownLoach]

i wonder if rite aid ends up divesting stores before they start shuttering stores. i wonder if selling thrifty ice cream to a distributor like C&S is a possibility.

So the creditors have already bought the company except Elixir which is sold to a competitor. Everything except stores that will be closing due to unprofitable figures or inability to reach an agreement with the landlord is already sold to the creditors. That would include Thrifty Ice Cream. This also means there is no possibility of divestitures of stores or any other asset since they've already been "divested" to creditor owned "Rite Aid Retail 2.0".

[ClownLoach]

I think Thrifty Ice Cream would be a great fit for Stater Bros.

In southern California, most Smart & Final and Smart & Final Extra locations carry Thrifty ice cream in a 3 gallon tub, usually vanilla. Some locations will carry other flavors - usually though it's just vanilla. For me, I want and demand other flavors!

The new RAD CEO is supposed to leave no stone left unturned, we'll see. Maybe, he and his small team will look for a quick sale of the Thrifty Ice Cream Brand and plant. If not the plant, for sure the Thrifty Ice Cream trade name.

SO_CAL_RETAIL_SLUT

The new CEO is not in a position to sell anything because he already sold the entire company minus Elixir and non-go-forward store locations to the creditors who formed a new holding company "Rite Aid Retail 2.0" which will receive all of the assets. It is a requirement to clear up all matters as part of the sale which is why the bankruptcy court has to be involved and therefore can bless the sale as "free and clear". This prepackaged bankruptcy needs this approval in the same way that when you sell your house you go through the private process of title investigation and insurance so the new buyer can safely purchase your home without worrying about unknown legal attacks in the future. Nobody could buy anything from Rite Aid without such clearance due to the opioid issue. The fact is without the opioid matter this would be no chapter 11 and the headlines would just say "Rite Aid taken private by creditors."

That means the creditors have already bought Thrifty Ice Cream. I am really not sure who you might think is going to emerge to oppose the sale to the creditors that would actually have a standing with the court aside from current shareholders who buy and sell stock at their own peril. The only parties who can oppose the sale of the company are the creditors who already agreed to buy it. It is a logical fallacy at this point to state that there is any chance or concern of the company somehow falling into the hands of liquidators to be dismantled since they would have to offer more than $3.45B; they offer only a few hundred million to liquidate far larger companies than RAD.