The ABC7 I-Team has been reporting on the fallout after the sudden closure of two hospitals - West Suburban Medical Center in Oak Park and Weiss Memorial on the North Side - which both employed hundreds and serviced tens of thousands of patients, regardless of if they had insurance or a means to pay for their healthcare.
After West Suburban Medical Center shut down this past March, both owners of the hospitals - landlord Rathnaker Patlola and operations CEO Manoj Prasad -- sued each other, leading to weeks of court hearings and delays over settlement negotiations that occurred behind closed doors.
Now, court records reveal what was discussed and offered in those private hearings and potentially why settlement talks dissolved.
According to settlement terms, an offer was made for Prasad to exit the hospital, and for Insight Health to take over management for both Weiss Memorial and West Suburban.
Insight Health took over a struggling Mercy Hospital in Bronzeville back in 2021 and has since expanded its services.
For stepping down as CEO, the settlement terms include Prasad receiving $600,000 for six months of "consulting", nearly $2.2 million that was transferred from a hospital bank account into an account owned by his daughter, and a 2022 Range Rover Sport that was purchased by the hospitals for Prasad's use at work.
It's a potential payout for a CEO whose leadership was described in a state audit obtained by the I-Team as "unstable and overstretched" with no data-driven strategy to stabilize 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.
"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.