Shareholders Seek $2.8 Billion From Scrushy

     BIRMINGHAM, Ala. (CN) – Shareholders are trying to collect a $2.8 billion judgment against former HealthSouth CEO Richard Scrushy. Their derivative lawsuit accuses Scrushy of violating the Alabama Fraudulent Transfer Act, alleging that as early as 1996, Scrushy transferred millions of dollars of property to third parties, including trusts set up for his children, to avoid collection attempts.




     The lawsuit in Jefferson County Court alleges that in 2005, co-defendant Jose Casanova approached Birmingham real estate agent William Eyster, to buy property on behalf of Scrushy. Eyster said in an affidavit that Casanova informed him that Scrushy had “over $600 million hidden offshore” and that Eyster said he believed that Scrushy had set up “dummy corporations” to bring assets back into the United States without his creditors’ knowledge.
     Scrushy was acquitted in a criminal trial related to the $2.6 billion accounting fraud at HealthSouth that put the rehabilitation company on the verge of bankruptcy. But Jefferson County Judge Allwin E. Horn found him liable in a civil trial in June. HealthSouth shareholders filed that derivative lawsuit accusing Scrushy of abusing corporate perks, falsifying earnings and spending company money for personal reasons.
     Art Leach, a lawyer for Scrushy, 56, who is serving time in a Texas federal prison on an unrelated bribery charge, issued a statement calling claims that Scrushy had hidden money in offshore bank accounts “outrageous and ridiculous.”
     Also named as defendants in the latest complaint are Scrushy’s wife Leslie; family trusts set up in the names of his children; his son-in-law Michael Plaia; the Richard M. Scrushy Charitable Foundation, and other businesses owned by Scrushy and his wife.
     Attorney John Q. Somerville, representing the shareholders, asked the court to freeze real estate that Scrushy transferred to various entities, including companies controlled by his son-in-law.

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