OSF HealthCare System is suing the Knox Clinic Corporation for nearly $48,000 for breach of contract and damages over unpaid rent.
OSF bought Cottage properties in April 2022 for $4 million, including the Medical Arts Clinic at 834 N. Seminary St.
At the time, Galesburg's Cottage Hospital had already been closed for several months and its affiliated clinic operation was on life support. Bankruptcy proceedings were underway and only a couple physicians remained.
As part of the sale, former Cottage owner and CEO Sanjay Sharma signed a lease with OSF for $23,628.46 a month for use of the Medical Arts building for remaining clinic operations.
The lease expired at the end of June 2022, but the lawsuit filed in Knox County court in October of this year alleges the Knox Clinic Corporation “wrongfully failed and refused to pay the amounts due.”
Knox Clinic Corporation is the legal entity of the former Cottage clinics.
Per the complaint, OSF sent a notice of default and demand for rent to Sharma’s legal counsel in December 2022, but the rent remains unpaid.
The lawsuit seeks unpaid rent, interest, and legal fees.
However, the Knox County Sheriff’s Office was unable to serve the summons to Sharma.
Ninth Circuit Judge William Rasmussen approved a motion on Dec. 7 for a special process server to locate the former Cottage owner and serve the summons.
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