Corporate expert says ex-CEO Scrushy left HealthSouth in a mess after FBI raid uncovered fraud

Testimony: Scrushy left HealthSouth in a mess

BIRMINGHAM, Ala. — A corporate restructuring expert says fired CEO Richard Scrushy left HealthSouth Corp. in a mess after investigators uncovered a massive fraud at the Birmingham-based rehabilitation company.

A judge heard deposition testimony from turnaround specialist Bryan Marsal on Thursday in a civil lawsuit against Scrushy.

Shareholders suing on behalf of HealthSouth are seeking $2.6 billion from Scrushy, whom they blame for the accounting scandal.

Scrushy denies any wrongdoing, and he was acquitted on criminal charges in the fraud in 2005. He was later convicted in a separate case and is serving seven years in federal prison.

Marsal said HealthSouth had no internal controls when Scrushy left in 2003. He said the company was in the worst shape he’s ever seen.

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