Eviction notices posted to the doors of West Suburban Medical Center and Weiss Memorial Hospital are demanding nearly $25 million in back rent.
One of the eviction notices, spotted by the Sun-Times on the doors of West Suburban Medical Center’s River Forest campus Tuesday, gave the hospital five days to pay up.
Both the River Forest campus and West Suburban’s main campus in Oak Park closed suddenly late last month because employees couldn’t be paid amid complications with the medical center’s records system. Weiss Memorial Hospital closed last summer after losing Medicare and Medicaid funding.
Dr. Manoj Prasad is the CEO and majority owner of Resilience Healthcare, the private company that owns both hospitals. But the person threatening eviction and demanding back rent is the minority owner of Resilience, Rathnaker Reddy Patlola.
Patlola owns all of Resilience’s hospital properties: the River Forest campus, the Oak Park campus and Weiss. Patlola’s company is New Jersey-based Ramco Healthcare Holdings, LLC, which is listed as the landlord on the eviction notice and in a lawsuit Prasad filed Tuesday in response to the eviction notice. (Across different legal documents, Patlola uses different combinations of his full name, including Reddy Rathnaker Patlola.)
That lawsuit, filed in Cook County Circuit Court, states that West Suburban in Oak Park and Weiss in Chicago’s Uptown neighborhood also received eviction notices demanding millions in rent.
All three eviction notices, dated April 9, threatened eviction after five days. It was not clear if those five days included the weekend.
Back rent for all of Resilience Healthcare’s properties total $24,478,556.25, according to the eviction notices included in Prasad’s complaint.
In the complaint, Prasad says his lease with Patlola restricts Patlola from evicting the hospitals — something Prasad emphasized again in a statement issued Tuesday afternoon.
“We said from the beginning that this eviction notice was without merit,” Prasad said in that statement. “Today’s filing shows that Mr. Patlola signed a lease that explicitly prevents him from doing what he is now attempting to do. Our focus remains on reopening this hospital for the community that depends on it.”
The complaint includes a copy of the lease, which states, “under no circumstances, including an Event of Default, shall Landlord have the right to unilaterally terminate the Lease.” The lease also requires 90 days’ notice and a good faith negotiation on rent during financial hardship. Prasad alleges Patlola did neither.
The terms of the lease also sets the base rent at $1 per year and both Prasad and Patlola agreed to share the facilities’ operating expenses and property taxes. As property owner, the lawsuit says, Patlola is responsible for building maintenance, including heating, cooling and elevators. Before closing, both Weiss and West Suburban struggled to keep the heating and cooling systems operating properly.
As tension between Prasad and Patlola escalated, the lawsuit claims, Patlola threatened in February to disparage Prasad to the media and tell reporters Prasad had “run West Suburban into the ground.” Patlola also vowed to “make everyone’s life a living hell” until he received “half a million [dollars] in rent every month and property taxes immediately.”
Patlola declined to comment on the details in the lawsuit. A spokesperson for Ramco said the company is not confident in Prasad’s leadership and is exploring all possible options to reopen West Suburban.
On March 25, Prasad announced he was temporarily closing West Suburban Medical Center and furloughing the vast majority of employees. He blamed the hospital’s year-old electronic medical record system “that has never functioned correctly” for the payroll issues. As a result, the hospital was operating on 10% to 15% of its usual revenue, he said.
Prasad said earlier this month he hopes to reopen West Suburban hospital in late June or early July.
Meanwhile, Patlola said he also was working to reopen the hospital — but under new management. He said in a statement he was in talks with Insight Hospital & Medical Center to see if the company could take over West Suburban. In a news conference earlier this month, Prasad pushed back on the idea and said he was the man who could get the hospital back up and running.
The hospital’s medical record system wasn’t the only issue plaguing West Suburban. Hospital inspection reports revealed broader problems at the Oak Park facility. In the months before closing, the hospital struggled to take care of its most critically ill patients and even keep the heat on.
Weiss had also struggled for many months before closing last August, including a broken air conditioning system and a dysfunctional emergency room.
Read the full complaint below: