This lawsuit is the latest skirmish in a weeks-long fight over who will control, and ideally reopen, the suddenly shuttered safety net hospital.
As the ABC 7 I-Team has reported over several weeks, the closure of West Suburban Medical Center late last month left hundreds of workers unemployed and thousands of patients without health care.
Advocates have argued the closure has led to a health care desert in the area, creating a gap in access to emergency and essential medical services for vulnerable patients.
Receivership Lawsuit
Business records reviewed by the I-Team show Resilience Healthcare is the private parent company behind three health care operations: Weiss Memorial Hospital, which closed last summer, West Suburban Medical Center and the River Forest Medical Campus, which both closed on March 25.
Rathnaker "Reddy" Patlola fully owns all of the health care facility properties, while ownership of operations is split between Patlola and Manoj Prasad, who is Resilience Healthcare's majority owner and chief executive officer.
According to Patlola's lawsuit, filed on Wednesday with Cook County's Circuit Court and reviewed by the I-Team, Patlola argues all of the hospital facilities have closed due to "financial mismanagement and malfeasance of West Suburban's manager."
"Dr. Manoj Prasad made the unilateral decision to close (West Suburban Medical Center), with no viable plan to reopen," the lawsuit states.
One of the more striking revelations in the newly filed lawsuit centers around allegations of "misappropriating" a $10 million loan from the state of Illinois to Prasad that was meant "to alleviate the financial stress and continue hospital operations" at Weiss Memorial Hospital last year.
According to the complaint, it is alleged that on May 2, 2025, after the state of Illinois deposited the funds into Resilience Healthcare's bank account for Weiss Memorial, the funds were then transferred to a private business account owned solely by Prasad.
"The $10,000,000 was not used to fund WMH's operations but was instead misappropriated for Dr. Prasad's direct or indirect benefit," the complaint alleges. "Without the use of the funds, Weiss was unable to make routine repairs, including to the HVAC system, causing the Weiss Hospital Property to fall into a state of disrepair."
The complaint states during the following month, Weiss Memorial Hospital's HVAC system failed, resulting in "abnormally high temperatures including temperatures reaching 89 degrees Fahrenheit in (Weiss Memorial Hospital's) Intensive Care Unit, and 87 degrees Fahrenheit in (Weiss Memorial Hospital's) emergency department."
By June 17, the complaint states Weiss was ordered to evacuate its entire inpatient unit, and the hospital remains closed to this day.
To read the lawsuit, click here.
A spokesperson for Prasad told the I-Team, "The claim regarding the $10 million [loan] is false. Those funds were sent to an account co-owned by Mr. Patlola and were used for hospital payroll and operating expenses. Mr. Patlola knows this."
As the I-Team previously reported, Prasad has also filed a lawsuit, accusing Patlola of "sabotage" and attempting to force out hospital management to protect his own financial gain.
"Mr. Patlola's filing is without merit," Prasad said through a statement. "The operative lease agreement between the parties, which Mr. Patlola signed, is already before the court in the complaint Resilience Healthcare filed last week. That agreement explicitly prohibits Mr. Patlola from terminating the lease or removing the hospital operator. Nothing in today's filing changes that."
Prasad has blamed the hospital's billing system for lost revenue, but the company behind that billing system has strongly denied their platform is to blame.
Last week, Prasad said some outpatient services at the hospital were resuming. The news was met by skepticism from former physicians who worked at the facility and talked to the I-Team.
Prasad said, "While Mr. Patlola files lawsuits, West Suburban Medical Center is treating patients. The hospital has resumed outpatient services, staff are returning from furlough, and the focus is to achieve full operations by July."
The Chicago Medical Society, which represents doctors and other staff for West Suburban, tells the I-Team the hospital's history of closures can be traced back to private, for-profit companies owning the facility and that it should be converted into a non-profit ownership for the community it serves.
When West Suburban Medical Center opened in 1914, it operated as an independent nonprofit hospital for 82 years before it was acquired by the Loyola University Health System in 1996 and then sold again a few years later. Since then, it has had five private owners including Resilience Healthcare.
Doctors who served the community at West Suburban say this is the right time to make a change in how the hospital operates.
"We don't want to go down the same path again, where there's no transparency, where all the physicians know things are deteriorating, and the physicians have no say," Dr. Vishnu Chundi told the I-Team.
Chundi is a former infectious disease physician at West Suburban and is now the co-chair of Chicago Medical Society's hospital task force to reopen and restore care.
"We certainly would like to have community involvement, physician involvement, nurse involvement in this," Chundi said. "So it truly brings back trust."
Patlola is asking a judge to appoint a neutral third-party health care receiver to "assume operational control of the hospital," and "oversee the selection of a qualified, independent hospital operator" who will "work in coordination with state regulators and local stakeholders to resume clinical services."
Patlola's plan to try and appoint a health care receiver and evict the current management was first discussed months prior after the I-Team learned back in February, he met with state officials and former hospital executives to discuss the CEO's ouster in a secret meeting.
State records show facility in distress
Prior to closing, Illinois Department of Public Health inspection reports reviewed by the I-Team show regulators had found many deficiencies in care.
In the latest Illinois Department of Public Health inspection report from March 6, 2026, inspectors cited serious issues with physician staffing, detailing delays in care that "has the likelihood of causing serious harm to any critically ill patients in the ICU."
When asked about the findings, Prasad said he couldn't comment on individual cases.
The I-Team also found the hospital has a growing mountain of debt it will have to get over to resume stable operations, a mountain formed by lawsuits from vendors, and money owed to taxpayers.
State records obtained through a Freedom of Information Act request show Resilience Healthcare owes $104.8 million to the people of Illinois: $74.8 million in unpaid taxes and fees, and $30 million in state loans to the for-profit health care company.
A spokesperson for the Illinois Department of Healthcare and Family Services told the I-Team on Tuesday that under a new state law passed last year, prior to the hospital's closure, it began withholding portions of federal health care reimbursement funds owed to Resilience to pay towards the company's debts with the state.
"West Suburban signed a tax repayment agreement with HFS in August 2025, which included terms that West Suburban would start paying the current monthly tax from September 2025 onward, as well as begin making payments against back taxes in January 2026," an HFS spokesperson told the I-Team.
To-date, the HFS spokesperson said, "Neither have occurred."