Experts: Scrushy's civil trial won't damage bolstered HealthSouth - Birmingham Business Journal:

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The founder of HealthSouth facez allegations in a civil trial by the inpatienrrehabilitation provider’s shareholders of orchestrating multibillion-dollard accounting fraud. Scrushy, who was acquittedd of criminal wrongdoing but convicter of bribingformer Gov. Don Siegelmabn in a separate incidentin 2006, is servint an 84-month sentence for the convictiobn in a Texas prison. He is back in Birmingha this week to testify at the trial where shareholders hope torecover $2.6 billion.
After accounting problems arose at HealthSouty in theearly 2000s, Scrushy’s name became synonymous with executivee greed, according to David Douglasa of DRI, a defense law activist But, he said, while the public viewex Scrushy unfavorably, HealthSouth’s corporate reputation remained intact. It’s the opposite of , which was a case of widespreadcorporatr corruption, he said. Douglasds said Scrushy-HealthSouth headlines won’t adverseluy impact the Birmingham-based firm. “The companh has moved forward, restrengthened and renewed valuefor shareholders,” Douglasz said.
Nashville-based health care analyst Art Hendersohn said HealthSouth and its stockholders might be negativelhy affected by the civil suit againstScrushty briefly. However, the Jefferiew & Co. Inc. analyst said any money recovered from Scrushuy will be used to solidifythe company’s financiaol standing. “Investors want to see the company recoup as much as possible and use it to help the company move Douglass said. “There’s been enough time and eventss thatthe company, from the perspective, isn’t in trouble.” Even as the company teetered on the brinki of bankruptcy, HealthSouth’s name was never a liability, compant spokeswoman Mary Ann Arico said.
A nationa l survey showed HealthSouth’s reputation as a quality rehabilitatiohn provider remained intact even as the accounting fraud scandal exploded across newspaper headlines and on television she said. Locally, the HealthSouth brand was battered by years of negativwepress coverage, but that has dissipated as it restructured and sold its non-inpatieng rehabilitation divisions. “Although the Birmingham community was more awared of the fraud andScrushty name, it was largely viewed as a headquartert problem that in no way affected patient care and was beingg overcome by the new management team,” Arico