Oak Park's shuttered hospital won't reopen anytime soon.

A court-brokered deal that would hand West Suburban Medical Center to a new operator fell apart after CEO Manoj Prasad spent weeks working to undo terms he'd agreed to in May. His attorney formally told a judge Aug. 1 that Prasad would not accept the settlement.

Cook County Chancery Court Judge Patrick Stanton set a Tuesday, Aug. 25 hearing at 9:30 a.m., giving the parties two weeks to reconcile and Ramco LLC a week after that to review whatever they produce. The 234-bed hospital at 3 Erie St. has been closed since Wednesday, March 25, its 28 elevators non-functional and a village no-occupancy order in place.

"I've been giving you all a lot of room to proceed," Stanton told the attorneys at a July 28 hearing, according to the Wednesday Journal.

What the deal would do

Under the proposed settlement, Prasad's corporate entity AUM would sell its interest in both West Suburban and Weiss Memorial Hospital to Insight Health Systems for $1. Insight would assume all rights and liabilities and take over management. Prasad would step down as CEO but retain ownership of AUM without management rights.

In a joint statement included in the settlement filing, Prasad and landlord Reddy Rathnaker Patlola said they are committed to selling Resilience Healthcare to Insight, which would "ensure West Suburban Medical Center and Weiss Memorial Hospital re-open to serve the communities that depend on them."

Prasad's exit package includes his regular salary and benefits through the closing date, a 2022 Range Rover Sport purchased by the hospitals, and $100,000 in consulting fees paid over six months, according to settlement terms filed in court. Insight previously took over the struggling Mercy Hospital in Chicago's Bronzeville neighborhood in 2021 for $1.

Why it stalled

Ramco attorney Scott Kaplan told the court that a settlement in principle was reached May 29 after more than four hours of negotiations in Stanton's chambers. Kaplan provided a draft agreement to Resilience Healthcare on June 3. Since then, Prasad fired his original attorney, hired personal counsel Travis Richardson, and worked to undo the agreed terms, Kaplan alleged.

At the Aug. 1 hearing, Resilience corporate attorney Howard Brookins told the judge via Zoom that Prasad would not agree. "It appears we're going to have to go forward with a hearing," Brookins said.

The lawsuit pits Prasad's Resilience Healthcare against Patlola's Ramco LLC. Patlola is also a co-owner of Resilience. Kaplan has alleged Prasad directed at least $35 million in unauthorized transfers from hospital accounts to Westlaw LLC, an entity Prasad solely controls. Specific transfers of $20 million, $4 million and $10 million occurred between Jan. 31, 2024 and May 2, 2025. An additional $2.19 million went from Westlaw to a company called ME & B Consulting LLC between Oct. 10, 2025 and Jan. 2, 2026.

The hospital still receives $680,000 to $700,000 per week in payments for procedures performed before the closure, Patlola testified at a May 8 hearing. As of July 28, Prasad had paid just $60,000 toward three of seven Commonwealth Edison accounts to stave off a final shutoff notice.

What residents face

About 500 furloughed employees received permanent layoff notices in early July. The mass layoff begins Aug. 31 and is expected to be permanent under the Illinois WARN Act, according to ABC7 Chicago.

The closure has strained neighboring emergency rooms. Rush Oak Park Hospital's ER hit "peak census," nearly closed to ambulances, for 26 days from mid-April through June, compared to two days during the same period a year earlier, the Wednesday Journal reported in July.

West Suburban owes Illinois more than $50 million in unpaid taxes, and Resilience Healthcare owes taxpayers more than $100 million total in loans, taxes and fees across both hospitals, ABC7 reported.

What comes next

Stanton ordered Kaplan to file a formal motion to enforce the settlement. If Prasad and Resilience cannot reconcile their positions by Aug. 25, Kaplan has asked the judge to appoint Kansas City attorney Mike Flanagan as a receiver over Resilience to force the deal through.