In a summary judgment for a shareholder lawsuit, an Alabama state judge ordered Scrushy to repay the money based on his "unjust enrichment," according to a law clerk for the judge, Alwin Horn III, of Alabama's 10th Judicial Circuit Court.
Scrushy will appeal the ruling, his lawyer said in a statement. "We believe the ruling is in error in that no state or federal court in the United States has ever made a finding on the basis cited in this case," said Kile Turner, attorney for Scrushy, in the Jan. 3 statement. "We will appeal the entire matter to the Alabama Supreme Court and we are confident it will be reversed," Turner said.
On Dec. 29, 2005, HealthSouth Corp. filed a countersuit against founder Scrushy, demanding he return millions in bonuses that he received during the fraud conducted under his leadership as CEO. The Birmingham, Ala.-based company estimates the fraud and resulting litigation has cost the company $579 million (Jan. 3, p. 4). The lawsuit claims that while the fraud was being conducted, Scrushy realized $46.5 million in bonuses and $207 million from selling stock that was trading at an inflated price because of the overstated earnings.
Scrushy lawyers had filed a breach-of-contract lawsuit against HealthSouth on Dec. 9, 2005, saying that Scrushy was wrongfully terminated in March 2003.
In June 2005, a jury acquitted Scrushy of criminal charges related to the fraud. His trial is scheduled to begin April 2007 on civil charges filed by the Securities and Exchange Commission, and has pleaded not guilty in a separate case about allegedly bribing an Alabama governor to retain influence with the state certificate-of-need board.