BIRMINGHAM, Ala. — Richard Scrushy’s federal criminal trial was an entertaining, white-collar whodunit with everything from a courtroom prayer circle to a big cartoon rat.
Four years later, a shareholder lawsuit seeking $2.6 billion from the disgraced HealthSouth Corp. chief executive isn’t making nearly the same splash. There have been few fireworks and no crowds this time, despite the huge amount of money at stake.
Part of the difference is a change in the times and financial environment: Wall Street’s meltdown, bailouts and the recession are bigger news than an immense corporate scam that ended six years ago.
Scrushy, who was acquitted in the fraud trial, still says he did nothing wrong and is the victim of corrupt underlings. He’ll take the stand in his own defense sometime this week.
Court documents indicate that even if a judge rules against him, he can’t afford to pay $2.6 billion.
Shareholders suing on behalf of HealthSouth argue he put the fraud in motion more than a decade ago when the company’s earnings fell below Wall Street estimates.
Revenue overstated
There’s no question top executives at the rehabilitation company cooked the books, overstating revenues and assets by millions each quarter to hide that it wasn’t meeting Wall Street projections. But Scrushy says he didn’t know about the fraud.
He’s serving nearly seven years in prison for an unrelated bribery scheme in which he agreed to help raise money for the state lottery in exchange for Alabama’s former governor appointing him to an influential hospital regulatory board.
The civil suit is being handled very differently from his 2005 criminal trial in the HealthSouth case, keeping the drama to a minimum.
Now, Scrushy’s fate is being decided by a state court judge, making for fewer theatrics for a jury’s benefit. The judge also issued a gag order on attorneys, eliminating the daily news conferences that helped make the criminal trial such a show.
Much of the evidence in the civil trial is being presented through video depositions rather than live witnesses, keeping high-pressure confrontations to a minimum and giving the trial the feel of a TV rerun.
Four years later, a shareholder lawsuit seeking $2.6 billion from the disgraced HealthSouth Corp. chief executive isn’t making nearly the same splash. There have been few fireworks and no crowds this time, despite the huge amount of money at stake.
Part of the difference is a change in the times and financial environment: Wall Street’s meltdown, bailouts and the recession are bigger news than an immense corporate scam that ended six years ago.
Scrushy, who was acquitted in the fraud trial, still says he did nothing wrong and is the victim of corrupt underlings. He’ll take the stand in his own defense sometime this week.
Court documents indicate that even if a judge rules against him, he can’t afford to pay $2.6 billion.
Shareholders suing on behalf of HealthSouth argue he put the fraud in motion more than a decade ago when the company’s earnings fell below Wall Street estimates.
Revenue overstated
There’s no question top executives at the rehabilitation company cooked the books, overstating revenues and assets by millions each quarter to hide that it wasn’t meeting Wall Street projections. But Scrushy says he didn’t know about the fraud.
He’s serving nearly seven years in prison for an unrelated bribery scheme in which he agreed to help raise money for the state lottery in exchange for Alabama’s former governor appointing him to an influential hospital regulatory board.
The civil suit is being handled very differently from his 2005 criminal trial in the HealthSouth case, keeping the drama to a minimum.
Now, Scrushy’s fate is being decided by a state court judge, making for fewer theatrics for a jury’s benefit. The judge also issued a gag order on attorneys, eliminating the daily news conferences that helped make the criminal trial such a show.
Much of the evidence in the civil trial is being presented through video depositions rather than live witnesses, keeping high-pressure confrontations to a minimum and giving the trial the feel of a TV rerun.
by the associated press
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