ATLANTA, Sept. 4, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit has been filed in the United States District Court for the Northern District of Alabama on behalf of all persons who purchased or otherwise acquired the securities of HealthSouth Corporation ("HealthSouth" or the "Company") (NYSE:HRC) between January 14, 2002 through August 27, 2002, inclusive (the "Class Period"). The lawsuit asserts securities fraud claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and alleges that HealthSouth failed to disclose that the Centers for Medicare and Medicaid Services ("CMS") had reclassified certain categories of reimbursements, thereby threatening HealthSouth's business.
The complaint claims that HealthSouth and its officers, including defendant Richard Scrushy, CEO and Chairman of the Board of Directors, made materially misleading statements and omitted to disclose material adverse information about the Company's operations and prospects during the Class Period. In particular, HealthSouth misled the market concerning expectations for revenues and earnings by failing to disclose the impact on its operations of certain Medicaid reimbursement policies. The complaint alleges that HealthSouth knew throughout the Class Period that it was in no position to meet the revenue and earnings guidance it had given to investors. Thus, those claims were knowingly or recklessly made without any reasonable basis. Meanwhile, during the class period, HealthSouth insiders, and in particular defendant Scrushy, sold nearly $100 million worth of HealthSouth stock.
According to the complaint, on August 27, 2002, Healthsouth shocked the market by issuing a press release announcing that the CMS directives issued on July 1, 2002 relating to reimbursements may result in a $175 million shortfall in EBITDA from previously issued financial guidance for 2002 and that the Company could not provide further guidance for 2002 and 2003 because of uncertainties posed by the directives. In response to this disclosure, Healthsouth stock plummeted by over 43%.
If you bought the securities of HealthSouth during the Class Period, you may, no later than October 28, 2002, join in the action and/or move for appointment as lead plaintiff. In order to serve as lead plaintiff, you must meet certain legal requirements.
Plaintiff is represented by Chitwood & Harley, a law firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States in both federal and state courts and has been instrumental in recovering billions of dollars on behalf of its clients.
If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Nikole Davenport at 1-888-873-3999 (toll-free) or by e-mail at nmd@classlaw.com, CHITWOOD & HARLEY, 2900 Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309. For more information about Chitwood & Harley, please visit our website at www.classlaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca