Richard Scrushy resigned from the board of HealthSouth Corp., Birmingham, Ala., having resisted company pressure to vacate his seat for almost three years. Scrushy, who was fired as HealthSouth's chief executive officer in March 2003 after a massive accounting scandal became public, issued a news release through a spokesman saying he now realizes he won't be a part of HealthSouth's board or management team. But Scrushy said he plans to nominate at least one director for upcoming board elections and has petitioned the Securities and Exchange Commission to amend HealthSouth's proxy statement to allow a majority of shareholders to increase the company's board size and fill vacancies. HealthSouth said it was pleased Scrushy had resigned and the action was long overdue.
Scrushy spokesman Charlie Russell said Scrushy resigned because the company had denied him all powers customary to a director. HealthSouth was unable to remove Scrushy from the board without a shareholder vote and could not schedule a vote without first issuing revised financial statements. The company has done so and set scheduled a Dec. 29 shareholder meeting, its first since 2002. According to HealthSouth's proxy statement, Duquesne Capital Management is the largest shareholder with 27 million shares, or 6.8%. Scrushy owns 3.7 million shares and the board as a group owns 5.5 million shares. A jury this summer acquitted Scrushy on criminal charges in connection with the accounting fraud at HealthSouth. He still faces a suit by the Securities and Exchange Commission and recently was charged with bribing the former governor of Alabama to keep a seat on the state Certificate of Need Review Board. -- by Joseph Mantone