Investors Sue Over Shuttered Weiss Memorial Hospital’s Debt

A portfolio of medical offices and safety net hospitals in Chicago and west suburban River Forest are stuck in limbo as investors battle over a total of $89 million in unpaid debt, public records show.

The dispute highlights the complexities of investing in real estate backed by safety net hospitals — which provide care to patients regardless of their insurance and financial status — and the ripple effect such deals can have on real estate deals and health care access when they go wrong.

The wreckage outlined in a December lawsuit was set in motion back in 2019, when El Segundo, California-based Pipeline Health bought Weiss Memorial Hospital in Uptown, West Suburban Hospital in Oak Park and Westlake Hospital in Melrose Park along with associated medical office properties for $70 million.

Soon after, Pipeline closed West Lake Hospital, and sold a parking lot adjacent to Weiss Memorial to Willow Bridge Property Company (formerly known as Lincoln Property Group). Willow Bridge redeveloped the property into a 12-story, 303-unit luxury apartment building known as Solverre.

Enter Princeton, New Jersey-based Resilience Healthcare, led by Manoj Prasad and partner Rathnakar R. Patlola. It bought Weiss and West Suburban along with their associated medical properties in a move approved by state regulators in 2022. While the transaction was set to close, Pipeline filed for bankruptcy, temporarily stalling the sale, previous news reports indicate.

The deal, which Prasad told media outlets at the time was worth $92 million, eventually closed and was funded in part by a $22 million loan from California-based First Credit Bank and a $67 million loan note with a December 2024 maturity date, public records show.

According to a lawsuit filed by former Pipeline affiliates in Cook County Circuit Court this month, Resilience late last year failed to pay back the $67 million owed to the Pipeline entities.

Attorneys for Pipeline and representatives of Resilience did not respond to requests for comment.

Six months after the alleged loan note default, the Center for Medicare Services in June 2025 terminated Weiss Memorial’s participation in Medicaid reimbursement, leaving a massive hole in its budget.

The Illinois Department of Public Health had reportedly paid several visits to the properties and found compliance issues in “nursing services, physical environment, and emergency services,” healthcare news outlet Chicago Health reported in August. Specifically, its air conditioning system failed and led to overheating, forcing closures of inpatient rooms. Weiss reportedly received 87 percent of its funding from Medicare and Medicaid in 2024.

Resilience this fall promptly shut down Weiss Memorial, though it still offers some outpatient services, according to its website. West Suburban Hospital in Oak Park remains open.

Pipeline confirmed it re-emerged from bankruptcy in 2023 in a statement on its website, and alleges in its recent legal filing that it bought the medical properties back via a credit bit shortly after issuing Resilience a notice of default in early 2025.

Since then, Pipeline alleges it should have been in charge of the assets but Resilience had refused to acknowledge the sale. Separately, the other $22 million debt tied to the properties, which was packaged into a commercial mortgage-backed securities offering, is also in trouble.

Resilience fell behind on debt payments in November, according to CMBS tracking platform Morningstar Credit, and it’s headed to special servicing, which usually brings on tougher conditions for borrowers.

The $67 million debt subject to Pipeline’s lawsuit is listed in public records as a subordinate mortgage, meaning Resilience is likely on the hook to cover the $22 million CMBS debt before making the lenders of the larger debt whole.

For now, the tangled legal mess leaves West Suburban Hospital in a precarious situation and puts a heavier burden on Weiss Memorial Hospital’s potential to reopen.