Rite Aid Didn’t Flag Going Concern Risk Before Bankruptcy Filing

Retail drug chain Rite Aid Corp. waved red flags about its financial woes leading up to filing for bankruptcy protection on Sunday, but it omitted a key accounting disclosure: warning about its ability to continue as a going concern.

“We are highly leveraged,” the company succinctly said in a footnote about its future liquidity in its most recent quarterly filing, published on July 11. The company was undertaking a restructuring to shore up its liquidity, it also said, but warned it couldn’t guarantee this would be successful.

Neither the latest 10-Q nor the annual report issued on May ...