Reliable Drug Store Chain Liquidating
CARMEL, Ind. (AP) _ Reliable Drug Stores Inc., which filed for bankruptcy protection in December, has decided to liquidate its holdings instead of reorganizing.
The chain, which has about 180 outlets, has agreed to sell its assets to American Drug Stores, which operates the Osco chain, and Rite Aid Corp., another drug chain, said Steve Ancel, Reliable’s bankruptcy attorney.
American Drug Stores Inc, a subsidiary of American Stores Co. of Salt Lake City said it will buy the inventories, prescription files and fixtures of 110 Reliable Drug stores in the Midwest.
The stores are in Illinois, Indiana, Iowa, Kansas and Missouri. The deal, which must be approved by the Bankruptcy Court, is expected to close in July.
American will also take over the leases on 51 of the 110 locations. That will help it build market share in places the company already has stores, the company said.
Rite Aid Inc., based in Harrisburg, Pa. will buy 44 stores, Ancel said. The remaining assets will be sold to undisclosed buyers, he said.
Reliable Drug operated 256 stores in seven states and employed 2,700 people when it filed for Chapter 11 protection last year. The company listed $148.5 million in assets and $140.1 million in debts.
At the time of the bankruptcy filing, Reliable was trying to refinance at least $78 million in long-term debt acquired when it bought 120 stores from the Peoples Drug chain in 1989 and 136 stores from Revco in 1990.
Ancel said the company was hit by the national economic slowdown and an uncertain stock market.