Mr. Green did not disclose other terms of the deal, including a proposed sale price.
A lawyer for the hospital declined to specifically comment on Mr. Green's account.
“We are and have been in discussions with several parties regarding a purchase of the hospital which will provide for its continued operation,” Robert Wild, an attorney in the Chicago office of law firm Krieg DeVault LLP, said in an email. “The suspension of payments by (Medicare) has made the continuation of operations at the hospital and negotiations for its sale extraordinarily complicated.”
State officials on Tuesday moved to revoke the hospital's license.
Sacred Heart hopes to gain the cooperation of officials with the Illinois Department of Public Health and the Centers for Medicare and Medicaid Services, which runs Medicare, so that the hospital could complete a sale with bankruptcy court approval, Mr. Wild said.
In a letter to state officials yesterday, Karen Davis, the hospital's interim CEO, described the closing as a temporary step.
The bankruptcy petition was crucial because “the hospital could no longer operate until the facility enters protection under Chapter 11 of the Bankruptcy Code, and hopefully secures a buyer,” according to Ms. Davis, an executive at turnaround firm Alvarez & Marsal Holdings LLP.
Any offer would almost certainly come with a deep discount considering the risk the buyer would be undertaking.
The hospital has been on life support since mid-April, when federal authorities arrested Mr. Novak, Sacred Heart CFO Roy Payawal and four physicians in connection with an investigation into an alleged kickback scheme that paid doctors thousands a month in exchange for referring their Medicare patients to the hospital for care.
Sacred Heart owes about $866,000 to its top largest creditors, according to the bankruptcy petition filed in U.S. Bankruptcy Court in Chicago. The largest item was $197,378 to the Illinois Department of Employment Security. Sacred Heart cut about 40 employees on Monday.
"Sacred Heart owner rejected deal that would have saved hospital" originally appeared in Crain's Chicago Business.