Fallout continued this week from the abrupt closure of West Suburban Medical Center last month, with the hospital’s owner suing his business partner over eviction notices issued to the hospital, and doctors asking Gov. JB Pritzker to intervene and reopen the facility.
Resilience Healthcare, which is majority owned by Dr. Manoj Prasad, filed the lawsuit in Cook County Circuit Court on Tuesday against Ramco Healthcare Holdings, a company owned by his business partner, Reddy Rathnaker Patlola.
In the complaint, Resilience alleges that Ramco, which owns the hospital property, improperly tried to evict Resilience from the West Suburban and Weiss Memorial Hospital facilities.
The eviction notices, included with the complaint, demand Resilience pay more than $24 million in rent within five days or face eviction. The notices are dated April 9.
A spokesperson for Ramco declined to comment on the lawsuit Tuesday but said Ramco is still exploring options for getting a new operator for the hospital. Patlola also has a minority stake in Resilience.
According to the lawsuit, filed by Resilience, “This matter arises from the latest escalation in a series of improper acts perpetrated by Ramco and its owner … to sabotage the operations of Weiss Memorial and West Suburban and substitute in new management for financial gain.”
When Resilience and Ramco bought the Oak Park hospital and the now-closed Weiss Memorial Hospital in 2022, Patlola agreed to give Resilience favorable lease terms, according to the complaint.
Among those terms, the lease provides that “under no circumstances, including an Event of Default, shall Landlord have the right to unilaterally terminate the Lease,” according to the complaint.
Resilience, however, alleges in the lawsuit that the relationship between Patlola and Prasad deteriorated over time after Prasad asked Ramco to perform repairs at the hospitals, including to their heating and cooling systems, and Patlola refused, “claiming that he would not pay for repairs until he received more revenue from the hospitals — even though the lease agreement he signed on Ramco’s behalf expressly provides that additional rent would not be coming until the hospitals were profitable.”
Weiss closed in August after it was terminated from the federal Medicare program following failures of the hospital’s air conditioning system that forced the hospital to transfer all its patients elsewhere.
The complaint details a February phone conference in which Patlola allegedly told Prasad he “would hold press conferences disparaging Dr. Prasad to the media and ‘make everyone’s life a living hell’ until Patlola (via Ramco) received ‘half a million (dollars) in rent every month and property taxes immediately.’”
The situation culminated last week when Ramco sent Weiss and West Suburban eviction notices, according to the lawsuit.
Resilience alleges in the lawsuit that the eviction notices are “baseless” and Ramco cannot terminate the leases per the lease agreements. Resilience is seeking a declaratory judgment that Ramco cannot evict Resilience. Resilience is also seeking a reduction in outstanding rent to Ramco, alleging that Ramco breached its contract with Resilience by failing to fix the hospitals’ heating and cooling systems.
Separately, the Chicago Medical Society and the medical staff at West Suburban sent a letter to Pritzker on Monday asking the governor to intervene. In the letter, they called upon him to use his executive authority to reopen the hospital, to direct emergency funding to the hospital to stabilize operations and appoint an interim management team.The letter noted that the hospital’s medical executive committee, which represents the physicians and oversees the quality and staffing of care at the hospital, has formally voted no confidence in the current ownership and management.
“Every day that this hospital remains closed increases the risk to the patients who depend on it,” they wrote. “This is not a policy discussion, it is a matter of life and death.”
A spokesperson for the governor’s office did not immediately provide comment Tuesday afternoon.
The lawsuit and letter are the latest twists in what’s been a dramatic month for West Suburban.
Late last month, Prasad stunned many patients and community members when he announced West Suburban would close temporarily.
During a tense news conference the following week, Prasad told reporters he was forced to close the hospital because of problems with its billing system that led to the hospital not being able to collect many payments for about a year.
Prasad said he hopes to reopen the hospital this summer. But at that same news conference, state Rep. La Shawn Ford expressed concerns, saying that he didn’t feel Prasad had yet “made the case that he can do it.”
Prasad, meanwhile, defended his company, saying it took over the long troubled West Suburban and Weiss hospitals at a time when no one else was willing to do so, saving them from closure several years ago. West Suburban and Weiss have long faced challenges and lost money, dating back to before their current owners. Both are safety net hospitals serving large numbers of patients on Medicaid, a state and federally funded health insurance program for people with low incomes and disabilities.
Shortly after the West Suburban’s closure, Patlola released a statement saying he was in talks with Insight Hospital & Medical Center in Chicago over whether it would be able to take over West Suburban’s operations. During the news conference, Prasad argued that Ramco had “no authority to be talking about operations to anybody.”
West Suburban also owes the state more than $50 million in unpaid taxes, according to the Illinois Department of Healthcare and Family Services.
