Thursday, August 9, 2007

$2.7 billion accounting fraud


The Firm represents certain former outside directors of HealthSouth in numerous civil litigations. These matters include federal consolidated securities class actions, state and federal derivative litigation, and class action ERISA claims. The Firm also represented these outside directors in an investigation by a Congressional subcommittee. These litigations, and the Congressional investigation, generally arise out of a $2.7 billion accounting fraud at HealthSouth.

To date, 15 HealthSouth executives and employees, including all five of the Company’s former CFOs, have pleaded guilty to criminal charges of accounting fraud. The Firm recently reached agreements in principle to settle all of the outstanding civil litigation pending against the outside directors – including the federal securities class actions, the derivative litigation, and the ERISA litigation – with no contribution from them. These settlements are subject to additional documentation and Court approval.

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