Judge questions why West Suburban settlement isn't finalized

A Cook County judge questioned on Tuesday why an owner of Weiss and West Suburban hospitals hasn’t yet finalized a settlement agreement that would sell the hospitals and require him to step aside as CEO.

The terms of the settlement would see the now-shuttered hospitals sold to Insight Health Systems for $1 and would require Dr. Manoj Prasad, who is CEO of the hospitals and majority owner of the company that runs them, Resilience Healthcare, to step down as CEO. 

But the company that owns the hospital properties, Ramco Healthcare Holdings, has alleged that Resilience is dragging its feet in finalizing the settlement after both Ramco and Resilience agreed to the settlement terms in a closed-door meeting with the judge May 29.

In late July, Ramco filed a motion asking the judge to enforce the settlement or appoint a receiver to take control of the hospitals, saying the future of the hospitals — and their ability to ultimately reopen — hangs in the balance. 

On Tuesday, Cook County Circuit Judge Patrick Stanton was critical of Resilience’s reasons for not yet finalizing the settlement.

“No one has said to me, ‘This is the deal point it fell apart on,’” Stanton told the attorneys during a hearing Tuesday. He said all the evidence points to Resilience wanting to renege on the settlement terms.

“Someone changed their mind,” Stanton said. “… This is someone who wants out of a deal.”

An attorney for Resilience argued in a court document that Stanton should not enforce the settlement because the draft of the written settlement agreement goes beyond the terms that were agreed upon May 29. The attorney for Resilience has also argued in the document that Prasad “suffered a health incident” involving low blood sugar the day he agreed to the settlement terms in the closed-door meeting. 

When someone is ill during a negotiation, that “raises factual questions concerning whether that individual possessed the capacity to fully comprehend complex transactional terms and whether any assent given under such circumstances was truly voluntary and informed,” according to the court document filed by Resilience.

The judge took issue with that Tuesday. Stanton noted that Prasad mentioned that day he wasn’t feeling well because he hadn’t eaten lunch, so he was given a yogurt and a granola bar, and the judge didn’t hear anything else after that about the situation.

More Top Picks Best Monitor Risers For Ergonomics

The argument that Prasad wasn’t feeling well enough to agree to settlement terms was “news to me as I sat there and talked to him for hours that afternoon,” Stanton said Tuesday. 

Resilience has also argued that the settlement shouldn’t be finalized because Insight is not a party to the proceedings yet Insight’s role is part of the settlement agreement. Stanton, however, said the agreement wouldn’t bind Insight to buying the hospitals, but rather outlines what will happen if it makes the offer. 

Also on Tuesday, the judge and an attorney for another company, S&T Consulting and Management, discussed S&T’s desire to intervene in the case. S&T has said in court documents that it operated West Suburban’s emergency and mental health departments, and that it has a contractual right to first refusal when it comes to now running West Suburban and Weiss.

Stanton also on Tuesday decided to allow Prasad to intervene in the case as an individual, whereas before the case was only between his company, Resilience, and Ramco. 

The next court date is scheduled for Sept. 11. 

Community leaders and former hospital workers are closely watching the case, as they continue to press for a reopening of the safety net hospitals. 

West Suburban closed in March after Prasad said billing issues led to a shortage of cash. Prasad closed Weiss, in Uptown, about a year ago after the federal government said the hospital would no longer be allowed to bill Medicare for services, following a host of issues that included broken air conditioning units.