Facing federal allegations that it overstated earnings by as much as $1.4 billion, HealthSouth Corp., the largest provider of outpatient surgery and rehabilitation services in the country, may need $1 billion in financing to avoid filing for Chapter 11 bankruptcy protection, according to some analysts.
The Birmingham, Ala.-based company says it has hired a turnaround company, a new legal team and a forensic auditing team.
HealthSouth says its previously filed financial statements "should no longer be relied upon" in light of Securities and Exchange Commission and Department of Justice investigations into possible accounting fraud.
The company also put Chairman and CEO Richard Scrushy on administrative leave. Former Chief Financial Officer Weston Smith has pleaded guilty to fraud.