CHICAGO, Sept. 23, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that class action lawsuits are pending in the United States District Court for the Northern District of Alabama on behalf of purchasers of the securities of HealthSouth Corporation (NYSE:HRC) ("HealthSouth" or the "Company") between January 14, 2002 and August 27, 2002, inclusive ("Class Period").
It has been alleged that HealthSouth violated the federal securities laws by issuing a series of materially false and misleading statements to the market, which had the effect of artificially inflating the market price of HealthSouth's securities. In addition to HealthSouth the complaints name Richard M. Scrushy, HealthSouth's CEO and Chairman of the Board of Directors; Weston L. Smith, HealthSouth's CFO; and William T. Owens, HealthSouth's President and COO.
Much Shelist is currently investigating these claims. If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to HealthSouth.
According to the complaints, throughout the Class Period, HealthSouth issued press releases and filed reports with the SEC announcing impressive revenue and earnings growth and repeatedly assuring the market that the Company was well on its way to meeting its financial targets for the year 2002 and that its fundamentals were strong. These and other statements were allegedly materially false and misleading because they failed to disclose that the Centers for Medicare and Medicaid Services ("CMS") had issued directives reclassifying certain categories of reimbursements, which would have a materially negative impact on HealthSouth's business. The Complaint further alleges that defendants failed to disclose these facts, which had been known to them for many months, in order to allow defendants Scrushy and Strong to collectively sell millions of shares of the Company's stock at artificially inflated prices and so that the Company could commence a $998 million note exchange/offer on more favorable terms than if the truth regarding the CMS directives and their impact on the Company was known publicly. The note exchange/offering was commenced on August 27, 2002 -- one-day before the Company disclosed the negative developments for the first time. On August 27, 2002, HealthSouth shocked the market by issuing a press release announcing that CMS directives issued on July 1, 2002 concerning reimbursements may result in a $175 million shortfall in EBITDA from previously issued financial guidance for 2002 and that it could not provide further guidance for 2002 and 2003 because of uncertainties posed by the directives. In addition, the Company announced that it would spin-off its surgery-center division as part of a massive restructuring undertaken to deal with the developments and that defendant Scrushy would be replaced as CEO by defendant Owens. In response to this disclosure, HealthSouth stock plummeted by over 43% to close at $6.71 per share in a single day on extremely high trading volume.
If you purchased HealthSouth securities during the Class Period and if you meet certain other legal requirements, you may file a motion in the court where the lawsuit has been filed to serve as a lead plaintiff. You must file your motion no later than October 28, 2002.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca