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Rite Aid Corporation Message Board

  • sarahyzhai sarahyzhai Dec 6, 2012 3:56 PM Flag

    Could RAD file bankruptcy?

    Could RAD file bankruptcy?

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    • I am an ordinary investor who depends on paycheck. I purchased some RAD stocks, hoping it will provide me some income after retirement. Now, looking at the stock price drops day by day, I wonder how the CEO could sleep well each night? I don't want to see RAD BK. I do hope the CEO will do a better job.

    • If this is real, I will be expecting an announcement soon! BK is the only way to right this company. if RAD built cars GOV. might help.

      Sentiment: Strong Sell

    • This is an excerpt from an email I have procured. I'm sorry that I cannot detail to you where or how I got the email, I can only assure you that it is very real and very disturbing.

      "Dear Partners,

      Our challenges are consistent with those facing all retail companies, and an increasing number of companies across a variety of industries today. The reality is that we — along with the rest of the country — have very little visibility on where the economy is headed and how our businesses will perform given the recession.

      We will announce that Right Aid will be restructuring its debt under Chapter 11 protection. In the next few weeks I am sure you will be seeing the speculative coverage in the news. I would have preferred everyone get the news from me first, but since our debt is publicly traded, we had to keep this decision confidential until we had a formal board decision.

      So, how did we get here? It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. By restructuring our debt, we will reduce the pressure on the company’s operating businesses, enabling us to pursue our vision of creating and operating sustainable, cutting-edge retail drugstores that are valued by our customers, business partners, and that plays a vital role in the communities we serve.

      I am proud of everything we have accomplished at Right Aid throughout the years. I’ve seen strong determination to take hold of this company and put it on a new course. This restructuring will give us the time we need to build that model, to secure sustainable and growing cash flow, and to achieve the success the talented partners in this company deserve.


      John T. Standley
      Chairman, CEO, President and Member of Exec. Committee"

      As I said, I have cut out parts of the letter in order to protect my sources, but there's enough there to understand what is about to happen. I can hardly believe it myself. I am a long time employee and am in a state of shock right now.

      • 3 Replies to riteaidjuniorofficer
      • WOW! Thats good news riteaidjuniorofficer. I have no idea why RAD didnt do it years back. I knew under Miller and Sammons it would never happen. I knew they would go down with the ship when it was time. Many over the years were screaming BK. I said they wouldnt do it even though they should have. They knew they could dontinue to dilute and keep those bonuses coming. Once it was evident Sammons was turning the reigns over to Standley, I then called for BK due to another from the Miller Regime moving to CEO.

        If this turns out to be true, I may look at Standley a little different than the rest of the Miller Regime. This is actually Great News!!! A Restructuring for RAD is Awesome!!!!

        Only one problem. It will wipe out the Common Stock therefore sticking it to the Shareholder.. Secured Debt Holders, Bond Holders and the likes will be okay. The Common Stock Shareholder will be wiped out and New Stock will be offered to Secured Holders. Just as in the Kmart BK.

        Man this is Great News and could make RAD a viable competitor someday!!!........ace

      • I have the same email. You cut out the part in the 2nd paragraph that said: "We as a public traded co. have to do what's best for our sh. holders and to do the best we can do we have to have some anal with Dons mother". If you cut that part out you cut some others out also.

        Sentiment: Strong Sell

    • Fortunately for creditors, companies can't arbitrarily decide when it might be convenient for them to file for BK protection, even if it would them more competitive. If they could, nobody would lend.

      RAD is currently generating free cash flow and there is no debt of any significance due until June 2014. On the last earnings call, RAD management indicated that they would be addressing this debt in Q1FY14. So, I'm not sure what would trigger this BK that posters here like to discuss.

    • Yes. They should have many years ago and they would be competiting with WAG and CVS............ace

    • Yes, any time now is possible. The sooner, the better.

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