HealthSouth $445 Million Settlement Update
In re HealthSouth Securities Litigation (N.D. Ala.)
D&G served as Liaison Counsel for the Retirement Systems of Alabama and a certified class of other purchasers of HealthSouth bonds.
On July 26, 2010, Judge Karon Bowdre entered final judgments approving the Bondholder Plaintiffs’ settlements with investment bank UBS Warburg for $100 million, and with auditor Ernst & Young for $33.5 million. These settlements bring the total amount recovered for HealthSouth Bondholders to approximately $230 million, and bring the Bondholder litigation to conclusion.
At the final hearing to approve these settlements, the Court said the following to Mr. Guin and the other plaintiffs’ counsel:
And I just want to commend all of you for the way that you have conducted the case.[You] have proved to me that there are ways to conduct complex litigation with lots of lawyers involved and to do so in a professional manner. And I appreciate that very much. (Transcript of July 22, 2010, at 55, lines 2-13)
In 2007, a $445 Million class action settlement was reached with HealthSouth, certain of its former directors and officers, and certain of its insurance carriers. Claim forms have been mailed to all known bond investors. At about the same time, the SEC obtained a $100 million settlement for stock and bond investors.
Fact discovery has been completed in the case, with more than 120 depositions taken. On January 26, 2009, Judge Bowdre denied the investment bank’s renewed motions to dismiss the bond investors’ “scheme” liability claims.
Most recently, on September 30, 2009, Judge Bowdre certified the case to proceed as a class action on behalf of all investors in HealthSouth bonds.
UBS’s petition to appeal that decision to the Eleventh Circuit Court of Appeals has been denied.
David Guin was appointed by the Court to represent HealthSouth Bondholders on the Federal Steering Committee.
For information regarding this litigation, contact David Guin or Tammy Stokes.
