HealthSouth Corporation has reached a $445 million preliminary agreement to settle federal lawsuits resulting from a massive financial fraud that nearly drove the rehabilitation chain to ruin.
The Birmingham-based company announced today that it will pay $215 million in common stock and warrants under the global settlement, and insurance companies will pay another $230 million in cash.
Investors involved in class-action suits filed in federal court also will receive 25 percent of anything the company eventually gets in its lawsuit against fired chief executive Richard Scrushy, who was acquitted last year on criminal charges in the fraud.
The company said attorneys are still working on a final version of the agreement, which must be approved by a judge. HealthSouth did not admit any wrongdoing.
HealthSouth's top attorney said the global settlement puts most of the company's legal issues to rest and allows the company to move forward.
HealthSouth and Scrushy are still in court fighting over his claims for as much as $100 million in compensation related to his ouster.