HealthSouth Lawsuit Against UBS Settled For A Total Of $133 Million

Main Category: Litigation / Medical Malpractice
Also Included In: Pharma Industry / Biotech Industry
Article Date: 27 Oct 2008 - 6:00 PDT

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On October 23, 2008, the claims of Wade Tucker and other derivative plaintiffs, on behalf of HealthSouth Corporation and against UBS were settled for a total amount of 133 million dollars, including 100 million dollars in cash and a release or waiver of a UBS judgment in the approximate amount of 33 million dollars.

The case began in 2002 when the Birmingham, Alabama law firm of Hare, Wynn, Newell, and Newton, LLP, filed a case representing Wade Tucker on behalf of HealthSouth Corporation against Richard Scrushy and other disloyal officers and directors of HealthSouth for fraud in the false reporting of income in excess of earnings and breach of their fiduciary obligations to the Corporation, along with other claims. Later, UBS was added as a defendant with a claim of aiding and abetting the fraud and breach of fiduciary duty. This settlement resolves all claims of HealthSouth against UBS. Previously, other claims against Richard Scrushy and the directors resulted in a recovery to HealthSouth of approximately 175 million dollars. With today's settlement, the total recovery pursuant to the derivative claims exceeds 300 million dollars.

There remains to be tried in this case additional claims Wade Tucker and the other derivative plaintiffs have asserted against Richard Scrushy and the accounting firm of Ernst and Young. The additional claims against Richard Scrushy are presently set for trial in the Circuit Court of Jefferson County in January, 2009. The claims against Ernst and Young will be determined before a panel in arbitration.

John Haley, of the Hare, Wynn firm, one of the attorneys representing Mr. Tucker said: "In any lawsuit there is risk. Risk that all parties incur. While we felt very good about our case, a fair settlement is mutually beneficial to all parties. HealthSouth has made great progress since the fraud occurred and this settlement allows the company to continue to move forward and put some things behind them."

Tucker attorney, Ralph Cook, also of the Hare, Wynn firm, stated: "HealthSouth Corporation is important to our community and exercises a significant role in our nation's healthcare. We are pleased that this part of the case has been resolved and we look forward to the resolution of the claims against the other defendants."

The Tucker case is a shareholder derivative action. Wade Tucker, et al., v. Richard M. Scrushy, et al., Circuit Court of Jefferson County, Alabama, Civil Action No. CV-02-5212. The Tucker plaintiffs were represented by the following lawyers:

John W. Haley
Ralph D. Cook
Bruce J. McKee
Michael D. Ermert

Hare, Wynn, Newell and Newton, LLP, is the oldest existing plaintiff's firm in the state of Alabama. Now in its second century of existence, the firm has dedicated its practice to the representation of individuals and businesses in circumstances involving catastrophic personal injury, wrongful death and complex business litigation.

Hare, Wynn, Newell and Newton