Nancy Zailo is waiting in line, behind Jeffrey Stein, the Chief Executive of Rite Aid Corp., who collects hefty paychecks every month. She is also behind consultants at Alvarez & Marsal, who have billed the pharmacy chain millions of dollars. Additionally, she is behind bondholders, $2,000-an-hour lawyers from Kirkland & Ellis, and lenders like Bank of America and Wells Fargo who are collecting significant amounts in interest.
Zailo, along with thousands of others, allege that the drug-store chain ignored red flags related to their opioid addictions for years, resulting in them losing everything. Unfortunately, she is not expected to receive any compensation.
The US Bankruptcy Code makes it difficult for opioid claimants like Zailo to receive compensation, as it allows companies like Rite Aid to prioritize paying off secured creditors before addressing claims from individuals. Despite facing over 1,600 opioid lawsuits, Rite Aid has not settled with plaintiffs like other drugstore chains, Walmart, CVS, and Walgreens.
Rite Aid is focused on reorganizing and repaying secured creditors before addressing claims from opioid victims. The company has already accumulated over $200 million in fees from advisors and lawyers during its bankruptcy proceedings. Critics argue that bankruptcy is being used strategically to avoid compensating injured individuals.
Zailo, a former Rite Aid customer who suffered from opioid addiction, is one of many waiting for potential compensation as part of the bankruptcy proceedings. While Rite Aid has settled some cases with local governments, a global settlement with opioid claimants has not been reached.
After years of financial struggles, Rite Aid filed for Chapter 11 bankruptcy, listing debts of $8.6 billion. The company is still trying to sell its retail business and may shut down over 600 stores in an effort to restructure and pay off debts. The outcome of negotiations with mass tort claimants could determine whether opioid victims will receive any compensation from the proceedings.