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HealthSouth, Investors Settle Suits

September 28, 2006|From the Associated Press

A final, $445-million settlement between HealthSouth Corp. and investors was announced Wednesday to end class-action lawsuits stemming from a huge fraud at the health services company.

Under the agreement, which goes to a judge for approval, the Birmingham, Ala.-based company would pay $215 million in cash, stocks and warrants. Insurance companies would pay the remaining $230 million.

"This settlement represents another significant milestone in HealthSouth's recovery and is a powerful symbol of the progress we have made as a company," Chief Executive Jay Grinney said in a statement.

Fifteen former HealthSouth executives pleaded guilty in what prosecutors described as a $2.7-billion fraud, and jurors convicted a 16th. Fired CEO Richard Scrushy was acquitted in the fraud, but he was subsequently convicted in a separate government bribery scheme linked to his years at HealthSouth.

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