The lawsuit between Resilience Healthcare owner and West Sub Hospital CEO Manoj Prasad and his landlord Ramco Healthcare and owner Reddy Rathnaker Patlola may have moved closer to a settlement Friday.
The settlement was initially agreed to by Prasad and Patlola in late May. Through his multiple attorneys, Prasad has since objected to the terms of the settlement. However, if the settlement is approved by Cook County Chancery Court Judge Patrick Stanton later this month, it would result in Prasad’s ouster as CEO of the shuttered hospital. It would also allow him to save face in the wake of the disastrous West Sub debacle.
Prasad and Patlola said in a prepared joint statement included in the stalled settlement that they “are committed to their plan to sell Resilience Healthcare to Insight who will ensure West Suburban Medical Center and Weiss Memorial Hospital re-open to serve the communities that depend on them.”
At Friday’s hearing Stanton said he didn’t believe the settlement needed to be confidential, and Resilience did not object.
Under the settlement terms, AUM, the corporate entity through which Prasad controls Resilience, will enter into an agreement with Insight Health Systems for the sale of its interest in both West Sub and Weiss Memorial hospitals for $1. Insight will assume “all of the rights and liabilities of AUM…”
Insight Healthcare will then immediately take over management of the hospital and Prasad will step down as CEO of AUM and both West Sub and Weiss Memorial Hospital.
Prasad will continue to own AUM, but have no management rights. Insight will not be able to liquidate AUM or take it into bankruptcy.
Prasad will continue to be paid his regular salary and all insurance benefits up to the sale closing date. He also gets to keep a 2022 Range Rover Sport vehicle.
For up to six months following his resignation, Prasad “will be available on reasonable notice as a consultant for Insight,” for which he will receive a total of $100,000 in six equal installments.
Ramco attorney: Prasad acted in bad faith
On July 28, Ramco attorney Scott Kaplan urged Stanton to enforce a settlement he said was agreed to in principle on May 29. After another hearing three days later Stanton told Kaplan to file his final settlement enforcement motion.
Kaplan said he wrote up a draft settlement agreement and provided a copy to Resilience on June 3. He has alleged that Ramco’s good faith efforts to finalize an agreement have “been met with delay and bad faith efforts by the Resilience parties.”
Resilience, Kaplan alleged, “have expended considerable efforts in an attempt to walk away from key terms previously agreed to during the May 29 settlement conference…”
Kaplan noted that Prasad fired his first attorney, who was involved in the negotiations, and hired a new attorney who, he said, “has worked to undo the settlement.”
Saying “time is of the essence,” Kaplan said that if the settlement is not enforced soon, there is a legitimate threat that West Sub and Weiss would never reopen, causing “irreparable harm” to Ramco.
Kaplan asked the judge to force Prasad and Resilience to comply with the terms of the settlement, enter into a Membership Interest Agreement and corresponding Management Agreement with Insight, pay all past due utility bills and “take all necessary and reasonable steps to restore elevator service to West Suburban Medical Center” in order to allow the lifting of a no-occupancy order by the Village of Oak Park.
Kaplan said the May 29 settlement was reached in the judge’s chambers after more than four hours. “This court personally presided over the … settlement conference and observed the parties negotiate and agree to the terms of the settlement,” he said, stressing that “particular weight is given to settlements reached in the presence of the judge.”
Kaplan included details of a Term Sheet outlining the settlement, a document he called “valid and enforceable.”
“If necessary, this court should appoint a receiver over (Resilience) to effectuate the settlement.” He named Kansas City attorney Mike Flanagan as the requested receiver. Flanagan, he said, has extensive experience serving as a receiver in the healthcare industry, and is “willing and able to act … to effectuate the settlement” and work toward allowing Insight Healthcare to manage West Sub pending the sale of assets to Insight.
Stanton gave Resilience attorney Howard Brookins and Prasad’s personal attorney Travis Richardson two weeks to work things out between them, and Ramco a week after that to go over the details of what Prasad and Resilience agreed upon.
‘Gross mismanagement’ alleged
Patlola has said millions of dollars Prasad has collected in past billing since West Sub closed in March have gone to Prasad. Asked, “Do you have any knowledge as to whether or not West Suburban Medical Center is still receiving payments for medical procedures that previously occurred,” Patlola answered, “Absolutely. They’re receiving closer to $700,000 a week. $680 to $700,000 per week they’re receiving right now.”
Friday’s filing also disclosed yet another bank with another account controlled by Prasad, one only disclosed to Patlola during a May 11 settlement conference. At that meeting with a court appointed special master, Prasad disclosed four transfers totaling $2,190,100 between Oct. 10, 2025 and Jan. 2, 2026. The transfers were from the Westlaw, LLC bank account to a company called ME & B Consulting, LLC.
Within seven days of the execution of the assets sale, Prasad’s Westlaw LLC must cause all funds held in any of its banks to be transferred back to AUM and/or the hospitals. Westlaw must then be dissolved within 60 days.
Non-disparagement, joint statement
There is a non-disparagement clause in which both sides agree to not bad mouth each other. In fact, a joint statement to be released within five days of the enforcement of the agreement has a “let bygones be bygones” tone. It reads in part:
“In ruling on Ramco’s … emergency motion for appointment of a receiver, Judge Stanton stated that “(a)s to the most serious charge that Dr. Prasad misappropriated money by transferring funds from Resilience to Westlaw, Ramco failed to provide credible evidence that these transfers resulted in any losses to Resilience and that “the main thrusts of the motion that Dr. Prasad had misappropriated vast sums of money was not proven.
“Stanton further stated that, as to the “implied claim that the hospitals failed due to Dr. Prasad’s performance as CEO, there is no evidence offered that Dr. Prasad caused any of these problems or that he failed or refused to address them.
However, court records show that Ramco presented no evidence of those claims at the May 8 hearing because they opted not to expend the time needed to extend discovery and then hold a required second evidentiary hearing.
The next court hearing is Aug. 25 at 9:30.