HealthSouth Corp., Birmingham, Ala., said it received the final court approval necessary to settle class action and derivative litigation stemming from multibillion-dollar accounting fraud at the company. U.S. District Court in Birmingham and Jefferson County (Ala.) Circuit Court approved the definitive agreements, which were announced in September 2006. Under the settlements, eligible shareholders will receive a total of up to $215 million in HealthSouth common stock and warrants and $230 million in cash payments from the companys insurance carriers. Eligible shareholders also will receive 25% of net recoveries from future judgments obtained by or on behalf of HealthSouth with respect to certain claims against the companys former chief executive officer, Richard Scrushy, former auditor, Ernst & Young, or former investment bank, UBS. In a news release, current HealthSouth CEO Jay Grinney said the company would now focus our legal resources on asserting our claims against Scrushy, Ernst & Young and UBS for the role each of them played in the fraud perpetuated against HealthSouth and its shareholders. In settling the litigation, HealthSouth didnt admit wrongdoing. -- by Jessica Zigmond
HealthSouth resolves fraud litigation
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