11th Circuit Rejects Bids to Kill $445 Million Settlement of Suit Against HealthSouth

11th Circuit Rejects Bids to Kill $445 Million Settlement of Suit Against HealthSouth - 6-18-2009

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

11th Circuit Rejects Bids to Kill $445 Million Settlement of Suit Against HealthSouth, Former CEO Scrushy Had Complained The Settlement Was Unfair Because It Cut Off His Legal Defense Funds And Other Benefits
Alyson M. Palmer

Fulton County Daily Report. June 18, 2009
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EXCERPT: The federal appeals court in Atlanta has rejected objections to the settlement of a securities fraud suit against HealthSouth. Former HealthSouth Chief Executive Officer Richard Scrushy, who is serving a prison sentence for an unrelated bribery charge, had complained that the settlement was unfair to him because it cut off his legal defense funds and other benefits. AIG Global Investment Group, a division of the embattled insurance giant, had argued that it should have been allowed to opt out of the class of plaintiffs in the case. Absent further appeals, Wednesday's rulings against Scrushy and AIG appear to remove all impediments to the $445 million settlement, which resolves massive securities fraud claims against HealthSouth, its insurance carriers and some of its directors and officers -- but not Scrushy. Appearing in January at the 11th U.S. Circuit Court of Appeals, Scott B. Smith of Bradley Arant Boult Cummings' office in Huntsville, Ala., defended the settlement on behalf of HealthSouth, which operates rehabilitation centers as well as providing home health services. Smith on Wednesday provided a statement on the rulings from HealthSouth's general counsel, John P. Whittington. "We are gratified that the 11th Circuit Court of Appeals has resolved these two impediments to the company's 2006 settlement of the federal securities class action," said Whittington. "This is another milestone in the company's efforts to put the past behind it and focus on the future of its business." Patrick J. Coughlin, who represents the plaintiff class, said Wednesday's decision on Scrushy's appeal addresses situations where a key company officer or two hold settlement discussions hostage. "It allows us to go into an egregious situation where a few bad guys are holding up the works and settle around them and continue to pursue them," said Coughlin, of the San Diego office of Coughlin Stoia Geller Rudman & Robbins.

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