Yahoo Finance Rite Aid Wins $200 Million Dispute Over Elixir Sale to MedImpact
(Bloomberg) -- Rite Aid Corp. isn’t responsible for more than $200 million in extra costs tied to the recent acquisition of its pharmacy benefit manager Elixir by MedImpact Healthcare Systems Inc., a judge ruled Monday
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Judge Michael Kaplan said during a hearing in New Jersey bankruptcy court that the underlying Elixir sale agreement makes MedImpact responsible for the disputed liabilities, which include millions of dollars in unpaid reimbursements owed to CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc.
The ruling is a boost for Rite Aid as it works to exit Chapter 11, saving it from incurring unexpected expenses. The additional liabilities are on top of the $575 million Medimpact paid to acquire the Elixir business, a transaction that was previously approved by Judge Kaplan.
The additional liabilities should have come as “no surprise” to MedImpact or its financial advisers, Judge Kaplan said. Although there were mechanisms in the sale agreement to adjust the purchase price, Judge Kaplan said it would be unreasonable to believe Rite Aid or its advisers would allow such a substantial swing in liabilities while it was attempting to restructure in bankruptcy protection.
Judge Kaplan said “money in this case is tight” and Rite Aid has no room to take on the additional liabilities.
The case is Rite Aid Corp., 23-18993, US Bankruptcy Court for the District of New Jersey.
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