HealthSouth Corp., Birmingham, Ala., filed a countersuit against Richard Scrushy, saying fraud that occurred under Scrushy's reign as chief executive officer and the resulting litigation has cost the company about $580 million. Even as HealthSouth's earnings were being overstated, Scrushy realized $34.5 million in annual bonuses from 1996 to 2002 based on the company's profitability, $12 million in bonuses for the company reaching analysts' earnings expectations, and $207 million from selling stock that was trading at an inflated price because of the overstated earnings, HealthSouth said in its suit in Jefferson County (Ala.) Circuit Court. The company asked a jury to decide how much it should be compensated. HealthSouth rejected claims by Scrushy that the company violated his contract when it fired him in 2003. Scrushy is seeking more than $70 million in back pay, bonuses and legal fees. Scrushy spokesman Charlie Russell declined to comment on the suit, saying lawyers hadn't reviewed it yet. In June, a jury acquitted Scrushy on criminal charges related to the fraud. Scrushy is scheduled to begin trial in April 2007 on civil charges filed by the Securities and Exchange Commission and has pleaded not guilty in a separate case to allegedly bribing an Alabama governor to retain influence with the state certificate-of-need board. -- by Joseph Mantone
HealthSouth sues Scrushy to recoup costs of fraud
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