News
March 16, 2006

Jenner & Block client HealthSouth Corporation recently reached a preliminary agreement in principle with the lead plaintiffs in the federal securities class actions and derivative actions, as well as with its insurance carriers, to settle litigation pending in Alabama federal and state court against HealthSouth and certain of its former directors and officers relating to financial reporting and related activity that occurred at the company prior to March 2003.

Under the proposed settlement, HealthSouth will pay $215 million in common stock and warrants, and its insurance carriers will pay $230 million in cash  to settle the federal securities and fraud claims.  In addition, the class action plaintiffs will receive 25 percent of any net recovery from future judgments against Richard Scrushy, the company's former chief executive officer, Ernst & Young, the company's former auditors; and UBS, the company's former primary investment bank, each of which remains a defendant in the derivative actions as well as the federal securities class actions.  The proposed settlement is subject to a number of conditions, including the successful negotiation of definitive documentation and court approval. 

The Jenner & Block team serving as co-counsel to HealthSouth on this matter includes Chairman Jerold S. Solovy, Partners Deirdre E. Connell, Christopher C. Dickinson, William D. Heinz, C. John Koch, Robert T. Markowski and John H. Mathias Jr., and Associates  Adam A. Hachikian, Kathryn C. Newman, Christopher M. O’Connor and Blair R. Zanzig. 

HealthSouth is one of the nation's largest providers of outpatient surgery, diagnostic imaging and rehabilitative healthcare services.