BALA CYNWYD, Pa., Oct. 2, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
A securities class action lawsuit pending in the U.S. District Court for the Northern District of Alabama, Southern Division (CV-02-S-2232-S) claims that HealthSouth Corporation (NYSE:HRC) misled shareholders about its business and financial condition.
Plaintiff seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and/or the Securities Act of 1933) on behalf of all investors who bought HealthSouth Corporation (NYSE:HRC) securities between January 14, 2002 through August 26, 2002 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of HealthSouth Corporation (NYSE:HRC) and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at http://www.sbclasslaw.com/cgi/signup.cgi.
The complaint alleges that the Alabama-based HealthSouth Corporation 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. According to the complaint, these and other statements were 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 sell (collectively) 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. According to the complaint, 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 Corporation (NYSE:HRC) securities between January 14, 2002 through August 26, 2002, you may be a member of the class and have until October 28, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca