Larry R. House abruptly resigned Friday as chairman and chief executive officer of MedPartners, the physician practice management giant that had been involved in an aborted multibillion-dollar merger with rival PhyCor.
Richard M. Scrushy, chairman and CEO of HealthSouth Corp., was named chairman and acting CEO of MedPartners pending a search for a full-time CEO. Scrushy said he would continue at the helm of HealthSouth and relinquish all management functions at MedPartners once a replacement is appointed.
Scrushy and House are longtime associates. As of last year, Scrushy owned 800,000 shares of MedPartners stock. Both HealthSouth and MedPartners are based in Birmingham, Ala.
In a written statement released by MedPartners and HealthSouth, House said: "The time is right for me to step aside. After focusing on rapid growth since our inception in 1993, I believe MedPartners should focus internally on operations."
Meanwhile, a class-action lawsuit has been filed against MedPartners, alleging the company and its officers made misleading statements about its financial condition to promote the merger with PhyCor. The deal with PhyCor was called off Dec. 7, the same day MedPartners announced it would not meet earnings projections.