The deal still requires approval of a motion submitted late Tuesday to the U.S. Bankruptcy Court for the Southern District of Texas, Pipeline said in a statement.
Pipeline said the deal will come in two phases. The first includes the Dec. 2 transition to Resilience of the operations of the two hospitals, a medical office building adjacent to Weiss and the River Forest Medical Campus affiliated with West Suburban and the Chicago Health Medical Group, the statement said.
“Phase two of the sale contemplates Ramco purchasing the real estate associated with the Chicago medical facilities and is expected to close in the next few months,” the Pipeline statement said.
El Segundo, Calif.-based Pipeline filed for Chapter 11 bankruptcy protection in October following a delay in the planned sale of its Chicago hospitals to Resilience.
Earlier in the year, Illinois regulators approved a deal in which Pipeline would sell the hospitals for $92 million to Resilience, a newly formed for-profit company.
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Resilience is owned by healthcare executive Manoj Prasad, who has mainly worked as an independent consultant for community hospitals, and financial partner Reddy Rathnakar Patlola, who manages Ramoco. He is also owner of Ramoco Fuels, a New Jersey-based operator of more than 81 gas stations on the East Coast.
Documents filed with the Illinois Health Facilities & Services Review Board earlier this year showed that Prasad and Patlola planned to fund the purchase through a combination of cash and debt financing. Patlola would 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, N.C.
Pipeline became the owner of West Suburban and Weiss Memorial, along with the now-closed Westlake Hospital, in 2019 when it acquired them from Dallas-based Tenet Healthcare for $70 million. Pipeline came under fire weeks after the deal when it tried to close Westlake Hospital after saying at the time of the sale that it had no plans to close the facility.
Westlake, a safety-net hospital, later filed for Chapter 7 bankruptcy after a court order prevented Pipeline from discontinuing hospital services, despite getting approval from the state to close. The hospital officially closed not long after, and court filings later revealed Pipeline had always intended to close the facility.
This story first appeared in our sister publication, Crain’s Chicago Business.