Pipeline closes deal to sell Weiss and West Suburban hospitals

The deal still requires approval of a petition filed late Tuesday night in the U.S. Bankruptcy Court for the Southern District of Texas, Pipeline said in a statement.

Pipeline said the deal will be in two phases. The first includes a Dec. 2 transition to resiliency of two hospitals, a medical office building adjacent to Weiss, and the River Forest Medical Campus associated with West Suburban and Chicago Health Medical Group, the statement said.

“The second phase of the sale involves the purchase of Ramco’s Chicago healthcare property and is expected to close in the next few months,” Pipeline said in a statement.

In October, El Segundo, California-based Pipeline filed for Chapter 11 bankruptcy protection after delaying a planned sale of its Chicago hospitals to Resilience.

Earlier this year, Illinois regulators approved a deal that would see Pipeline sell hospitals for $92 million to newly formed commercial company Resilience.

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Resilience is owned by health chief Manoj Prasad, who has mostly worked as an independent consultant in community hospitals, and Reddy’s financial partner Ratnakar Patlola, who runs Ramoco. He is also the owner of Ramoco Fuels, a New Jersey-based operator of more than 81 filling stations on the East Coast.

Documents filed with the Illinois Health and Services Supervisory Board earlier this year showed 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, North Carolina.

Pipeline took over West Suburban and Weiss Memorial, as well as the now-closed Westlake Hospital, in 2019 when it acquired them from Dallas-based Tenet Healthcare for $70 million. Pipeline came under fire a few weeks after the deal when it attempted to close Westlake Hospital, saying at the time of the sale that it had no plans to close the facility.

Westlake, an insurance hospital, later filed for Chapter 7 bankruptcy after a court order prevented Pipeline from terminating hospital services despite receiving state approval to close. The hospital officially closed shortly thereafter, and court documents later showed that Pipeline had always intended to close the facility.

This story first appeared in our sister publication, Crane’s Chicago business.

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