OAK PARK, Ill. () — The co-owner of two closed Illinois safety-net hospitals that owe taxpayers hundreds of millions of dollars was presented with a potential exit package that included cash payments and a 2022 Range Rover, according to newly filed court records. The proposed deal was intended to clear the way for another hospital operator to take control of the facilities and potentially bring them back online.
The ABC7 I-Team has been tracking the aftermath of the abrupt shutdowns of West Suburban Medical Center in Oak Park and Weiss Memorial Hospital on Chicago’s North Side. Together, the hospitals employed hundreds of workers and served tens of thousands of patients, including many who were uninsured or unable to pay for medical care.
After West Suburban Medical Center closed in March, the dispute between the hospitals’ two owners spilled into court. Landlord Rathnaker Patlola and operations CEO Manoj Prasad filed lawsuits against each other, triggering weeks of hearings and prolonged delays as settlement discussions played out behind closed doors.
Those newly available court filings now offer a clearer picture of what was on the table during the private negotiations — and why efforts to reach a settlement may have fallen apart.
Under the proposed settlement terms, Prasad would have stepped away from the hospitals, while Insight Health would have assumed management of both Weiss Memorial and West Suburban Medical Center.
Insight Health previously took over the financially troubled Mercy Hospital in Bronzeville in 2021 and has since broadened the services offered there.
In exchange for resigning as CEO, the proposed terms called for Prasad to receive $600,000 for six months of “consulting,” nearly $2.2 million that had been moved from a hospital bank account into an account owned by his daughter, and a 2022 Range Rover Sport purchased by the hospitals for his work use.
The potential payout comes despite scrutiny of Prasad’s leadership. A state audit obtained by the I-Team described his management as “unstable and overstretched” and said there was no data-driven strategy in place to stabilize hospital operations.
Under Prasad’s leadership, inspectors with the Illinois Department of Public Health cited serious issues with physician staffing and facility conditions that had “the likelihood of causing serious harm” to patients, according to reports obtained by the I-Team.
As the I-Team previously reported, Resilience Healthcare, the company that owns both West Suburban and Weiss, also owes taxpayers more than $100 million in loans, taxes, and fees.
At the last court hearing held over the dueling lawsuits, Prasad and Resilience Healthcare told Cook County Chancery Court Judge Patrick Stanton they did not plan to take the deal, which will trigger a future hearing over whether Judge Stanton will force the settlement through, or choose another path forward.
After reviewing the latest court filings, ABC7 Chief Legal Analyst Gil Soffer said it’s likely the settlement terms will be enforced.
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“What’s left for the judge to do is force this toward a resolution as quickly as they can,” Soffer said. “And that’s either going to be with the reluctance of some of the parties, but it’ll reach a result or it’ll be over the objection of the parties, in which case we’ll see a fast track to an appeal.”
“It went to a pretty near final place,” Soffer added. “They reached an agreement in open court before a judge; it looks like many of the key terms were settled on. It has a good shot of being enforced.”
Soffer acknowledged that if Judge Stanton enforces the settlement, Resilience Healthcare and Prasad can appeal, but it’s likely to be on a faster timeline.
“The reality is, given the urgency of the situation and where these hospitals are now and the bills that they’re facing, it won’t take that long,” Soffer said. “And there’s going to be resolution one way or the other, either as a matter of law or as a matter of fact.”
Attorneys representing Patlola accused Prasad and Resilience Healthcare of “bad faith” efforts to delay and renegotiate the settlement terms after they were agreed to in-person, and in the presence of Judge Stanton, back in May.
After reaching a settlement in person, Patlola’s attorneys argue Resilience Healthcare and Prasad tried to “renegotiate key terms of the settlement without any legal authority for their position,” and fired the attorneys “who negotiated the settlement and [hired] new counsel who [have] worked to undo the settlement.”
Prasad did not respond to the I-Team’s requests for comment on the settlement talks.
For now, the future of the safety net hospitals that served thousands in the community is unknown.
What is known: Weiss Memorial has been closed for nearly a year, and West Suburban has been closed for months after Prasad vowed to reopen it by last month.
Patlola’s attorneys have argued “time is of the essence” to settle the case and bring in new management as the conditions of both hospitals “are not improving, and are actively deteriorating.”
“Should the Settlement not be enforced, there is a legitimate threat that the subject hospitals will never reopen, and the hospital properties fall into a
state of disrepair,” attorneys wrote in their request for a judge to enforce the settlement terms.
A status hearing in the court case has been scheduled for Aug. 25.
