In a statement, Pipeline said the deal still requires approval of a petition filed late Tuesday in the United States Bankruptcy Court for the Southern District of Texas.
Pipeline said the deal will have two phases. The first statement covers the transition to Resilience for the operations of two hospitals on December 2, a medical office building adjacent to Weiss, and the River Forest Medical Facility linked to West Suburban and Chicago Health Medical Corporation, the statement said.
“Phase two of the purchase is expected for Ramco to acquire real estate related to medical facilities in Chicago and is expected to close over the next several months,” Pipeline’s statement said.
El Segundo, Pipeline is based in Calif. filed for Chapter 11 bankruptcy protection in October after a plan to sell Chicago hospitals to Resilience was delayed.
Earlier in the year, Illinois regulators approved a deal in which Pipeline would sell the hospitals for $92 million to Resilience, a for-profit start-up.
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Resilience is owned by healthcare executive Manoj Prasad, who primarily works as an independent consultant for community hospitals, and financial partner Reddy Rathnakar Patlola, who manages reason Ramoco. He is also the owner of Ramoco Fuels, a company that operates more than 81 gas stations on the East Coast based in New Jersey.
Documents filed with the Illinois Health Facilities & Services Review Board earlier this year show that Prasad and Patlola planned to finance the purchase through a combination of cash and debt financing. . Patlola will provide $32 million in cash, with the remaining $60 million coming from a loan from Provizia Capital, a real estate investment firm based in Raleigh, NC.
Pipeline became the owner of West Suburban and Weiss Memorial, along with now closed Westlake Hospital, in 2019 when it acquired them from Dallas-based Tenet Healthcare for $70 million. The pipeline caught fire weeks after the deal when it attempted to close Westlake Hospital after saying at the time of sale that it had no plans to close the facility.
Westlake, a hospital with a safety net, later filed for Chapter 7 bankruptcy after a court order prevented Pipeline from discontinuing hospital services, despite state approval to close. The hospital officially closed not long after, and court records later revealed that Pipeline had always intended to close the facility.
This story first appeared in our sister publication, Crain’s Chicago Business.
