Officials from HealthSouth Corp. will meet Monday with shareholders and creditors to review a new business plan and discuss the future of the embattled ambulatory surgery and rehabilitation center operator.
HealthSouth interim Chairman Joel Gordon, interim CEO Robert May and Chief Restructuring Officer Bryan Marsal will brief shareholders and creditors in New York City next Monday afternoon. The meeting will be broadcast live on the Web and be accessible by conference call, HealthSouth says.
While it is uncertain whether a multibillion-dollar accounting scandal will push the Birmingham, Ala.-based company into bankruptcy, HealthSouth has begun shedding some noncore assets.
Medical device manufacturer Orthofix International, Huntersville, N.C., said Tuesday that HealthSouth has sold its stake in OrthoRx, a 50/50 joint venture that produces orthopedic durable medical equipment. According to OrthoFix, private healthcare equity investment firm Ferrer Freeman and Co., Greenwich, Conn., has purchased HealthSouth's holdings in OrthoRx, a Plano, Texas-based company founded in 2001.
HealthSouth spokesperson Andy Brimmer says the sale reflects HealthSouth's desire to focus on its core business of caring for patients.
HealthSouth indicated in late April that it would decide before the end of June whether to seek Chapter 11 protection, but so far it has avoided bankruptcy court. However, that decision has been delayed because independent auditor PricewaterhouseCoopers will not finish its review of HealthSouth's books until some time in the third quarter, according to Brimmer.
An in-house review by HealthSouth officials and corporate restructuring specialists Alvarez & Marsal will be the subject of Monday's meeting, Brimmer says. Bryan Marsal is a managing director of that firm.
HealthSouth stands accused of overstating profits by $2.5 billion between 1997 and 2002 and with inflating the value of company assets by $800 million in public financial reports.
Eleven former company executives--including all five former CFOs--have pleaded guilty to federal charges taking part in the accounting scheme that prosecutors suspect may go back as far as 1986.
Company founder Richard Scrushy was ousted as chairman and CEO in March after accounting irregularities came to light, but Scrushy so far has not been charged with any crime.