Deep-discount drug retailer Phar-Mor, hobbled by charges that two senior executives engaged in fraud and embezzlement leading to a $350 million write-off, made its own Chapter 11 filing on Aug. 17. The 300-store chain won court approval to spend $50 million in cash that had been collateral for its lenders. Antonio Alvarez, interim chief financial officer, says that's enough to operate while Phar-Mor tries to develop a game plan for the Christmas season.
Meanwhile, the legal battle over who gets the blame for Phar-Mor's troubles has begun. Phar-Mor sued former auditor Coopers & Lybrand, accusing it of negligence in failing to uncover the fraud. C&L filed a countersuit.