The legal fallout from the abrupt March closure of West Suburban Medical Center continues this week, with the first Cook County court hearing on the matter set for Friday.
Dueling lawsuits between the co-owners of Resilience Healthcare progressed this week as Resilience Healthcare CEO Manoj Prasad’s attorneys filed a motion disputing Resilience co-owner and hospital landlord Rathnaker Reddy Patlola’s recent claim that Prasad is to blame for $10 million in missing state funding and even more in unpaid rent and fees associated with the embattled Oak Park hospital. A hearing on the matter is set for the morning of Friday, May 8 in Downtown Chicago’s chancery court, with another hearing in the case already set for June 15.
Patlola filed a lawsuit on April 22 in Cook County court against Resilience Healthcare, alleging that millions in unpaid rent and prolonged mismanagement of the hospital drove West Sub and Weiss Memorial, its previously shuttered sister hospital, to collapse. Patlola owns the properties for West Suburban Medical Center in Oak Park and River Forest, Weiss Memorial in Chicago and other associated medical buildings through an entity called Ramco Holdings. He also has a 40% ownership stake in Resilience.
Eviction notices from Ramco were placed on West Sub’s River Forest medical campus and Weiss Memorial’s campus on April 9.
Patlola filed the suit for seven counts of breach of contract, seeking to recover over $24 million in allegedly unpaid rent and fees from Resilience-owned buildings. The landlord’s lawsuit also alleged that Prasad had “misappropriated” a $10 million state loan meant to cover hospital operating expenses.
According to Ramco’s suit, the same day that Resilience received a $10 million state loan for Weiss Memorial Hospital on May 2, 2025, the money was moved from Weiss’ lockbox account to the hospital’s operating account, then transferred to Westlaw Management Group — a company owned solely by Prasad. Ramco claims the state money was not used for hospital operations, which led to Weiss closing that August after its Medicare reimbursement agreement was terminated by federal officials.
“While Dr. Prasad claims that he has a plan in place for reopening West Suburban Medical Center, his track record paints a bleaker picture,” Ramco said in Wednesday’s filing. “Weiss Memorial Hospital was also a safety-net hospital which closed due to Dr. Prasad’s mismanagement and believed misappropriation of millions of dollars of funds provided as a loan by the state of Illinois to Weiss.”
Ramco’s suit also argues that Prasad’s alleged misappropriation of state funds led to major facilities issues at the hospitals, including failing HVAC systems and X-ray machines creating unsafe conditions for patients.
On April 29, Prasad filed a new motion disputing the allegation that the loan had been misappropriated. In the 224-page filing, Prasad’s attorneys argued that Patlola also had access to the Westlaw accounts where the loan money was deposited.
The filing included email records reportedly showing Prasad sharing the login to the entity’s bank account with Patlola.
“We have said from the beginning that Mr. Patlola’s claims are false and today’s filing proves that beyond any doubt,” Prasad said in a statement about his filing. “The record shows Mr. Patlola has co-owned, had full access to, and contributed funds to the very account at the center of his allegations. My focus remains on the West Suburban community, its staff, and its patients and we are working to fully reopen the hospital by July.”
In the filing, Prasad’s attorneys argued again that he had a deal with Ramco that set rent for the hospital properties at just $1 per year until the hospitals turned a profit.
Ramco’s April 22 filing argued that no such deal existed.
Prasad’s court filing is also seeking to block Patlola’s push to obtain a court order transferring ownership of the hospital to his chosen receiver: Michael Flanagan, a Kansas City attorney, who has managed the court-appointed receivership for several skillednursing facilities around the country.
Hospital leadership announced the closure of West Sub in March citing a prolonged failure in the hospital’s billing system that resulted in as much as 90% of its work going unbilled. Resilience has since hired dozens of people to try and collect payment for the 120,000 outstanding claims related to West Sub services, the company announced earlier this week.
In the months leading up to the closure, Wednesday Journal reported on a variety of financial issues at West Sub and at Resilience Healthcare, including unpaid vendors, the loss of the hospital’s once-revered doctor residency program and the millions owed in state and local taxes.