HealthSouth Corp., piecing together financial records that were allegedly inflated by $2.5 billion, says it will indefinitely delay filing its financial report for the first quarter of 2003 and will eliminate 80 more jobs to stabilize the company and fend off bankruptcy.
Meanwhile, today's Wall Street Journal reports that the U.S. Department of Justice is seeking to freeze some of the assets of ousted HealthSouth Chairman and CEO Richard Scrushy. The action follows a federal judge's ruling that Scrushy could have access to all his cash and property.
News of ongoing investigations of the Birmingham Ala.-based company by the Securities and Exchange Commission and the Justice Department broke in late February.
HealthSouth is already $1.25 billion in default to lenders. On May 1, it announced that its bank lenders had refused to extend a forbearance agreement that would prevent them from calling in debts and throwing the company into bankruptcy.
On Wednesday, in a letter to the SEC, HealthSouth said it would indefinitely delay filing its first quarter financial report with the SEC because it is still reviewing financial documents. The company has said its past financial statements cannot be relied upon.
Today the company announced it would eliminate 80 "non-clinical corporate positions," which would bring HealthSouth "to a size more appropriate for the company's operations across the country."
In early April, the company laid off 250 employees, including 165 positions at the corporate office as well as corporate-based positions around the country.
In addition, today's release says HealthSouth has "made progress" in "disposing of" several corporate aircraft, including its Gulfstream G-V, Sikorsky S-76 C+ helicopter, two Cessna Citation Jets and a Beechcraft Bonanza.
The company says it has reached an agreement with GE Capital, the lessor of the G-V, to "satisfy HealthSouth's obligations under the lease."