It is said that the Rite Aid business could sell up to 500 stores as part of its bankruptcy plan

Rite Aid, the third-largest U.S. drugstore company, may file for bankruptcy and close 400 to 500 locations.

Rite Aid was negotiating with creditors Friday to file for Chapter 11 bankruptcy and liquidate 25% of its 2,100 stores, according to the Wall Street Journal. It would sell or let creditors take over the rest.

Philadelphia-based Rite Aid has struggled against CVS and Walgreens for years. As of June 3, it had $3.3 billion in debt and decreased sales. It said it wasn't making enough money to pay it.

A federal lawsuit accusing the business of disregarding opioid abuser prescriptions between 2014 and 2019 makes its financial situation worse. Similar charges have plagued other large pharmacies. The Justice Department alleges Rite Aid fraudulently filled hundreds of thousands of opioid and controlled drug prescriptions.

CVS and Walgreens have around 9,000 outlets, but Rite Aid's expansion went poorly. It has just over 5,000 stores after buying Brooks/Eckerd in 2007. It's closed and sold locations since to recover from its financial crisis.

Rite Aid agreed to be bought by Walgreens in 2015, and 865 of its shops were sold to Fred's, a another competitor. The Federal Trade Commission stopped the deal. In the end, Rite Aid sold about 2,200 shops to Walgreens, but Fred's part of the deal fell through.

Rite Aid reported $135 million in cash and anticipated to lose $650 million to $680 million in the current fiscal year in its June quarterly filing.