Ala. judge freezes assets of jailed HealthSouth founder Scrushy after $2.87 billion judgement

Judge freezes assets of jailed HealthSouth founder

BIRMINGHAM, Ala. — A judge froze the assets of jailed HealthSouth Corp. founder Richard Scrushy to help pay for a nearly $2.9 billion judgment after he was found liable for the accounting fraud that nearly wrecked the company.

Jefferson County Circuit Judge Allwin E. Horn issued the order Tuesday at the request of lawyers who won the judgment against Scrushy. The decision barred Scrushy from selling or concealing his holdings — including homes worth $33 million, artwork by Picasso, racing boats and airplanes — while the other side tries to collect.

Horn previously ruled in a lawsuit that Scrushy led the fraud at HealthSouth, even though he was cleared of criminal charges three years ago. The judge found that Scrushy was involved in faking earnings reports to meet analyst’s forecasts during 1996-2002.

“We want to identify the extent of Mr. Scrushy’s assets and seize them as quickly as possible,” said John Somerville, an attorney representing shareholders who filed suit on behalf of the rehabilitation chain. “We will seek every penny.”

Horn told lawyers for shareholders and for Scrushy to agree by Aug. 7 on the extent of Scrushy’s wealth and on a plan to pay whatever he can of the $2.87 billion judgment, issued last week by Horn after a non-jury trial.

Scrushy’s lawyers did not dispute the order, according to court documents.

Prosecutors said Scrushy, owner of multimillion-dollar Alabama homes in Vestavia Hills and on Lake Martin, earned $226 million during the fraud period of 1996 through 2002 and had a net worth of $287 million in 2004.

A government audit of his holdings a year earlier showed he owned millions in art, furniture, cars, offshore racing boats and airplanes. The asset list included paintings by Picasso, a 22-carat diamond ring worth $370,000 and Alabama and Florida homes worth a combined $33 million.

Scrushy is serving nearly seven years in federal prison after being convicted in a state bribery scheme with former Gov. Don Siegelman.

Information from: The Birmingham News,


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