HealthSouth working to avoid bankruptcy
Leaders of the outpatient services giant call for more time from creditors to recover from accounting scandals.
By Katherine Vogt, amednews staff. July 28, 2003.
Interim leaders say scandal-and-debt-ravaged HealthSouth can likely avoid bankruptcy if creditors allow more time for turnaround tactics to be planted and take root.
In debt nearly $3.3 billion, the outpatient services giant held a meeting in New York on July 7 to address the concerns of stockholders and creditors. It marked the first major update on the company's finances since March, when a massive accounting scandal involving top executives was revealed and chief executive Richard M. Scrushy was ousted.
"There's no assurance of where we are going, but we feel confident if we have another 90 to 120 days to get the things together, to institute the plans we have and bring them about, we think our company has an awfully good chance of moving forward and avoiding bankruptcy," said Joel C. Gordon, interim chair of the board.
Gordon said company operations were solid but he acknowledged that HealthSouth still faces several "rocks in the road." The company has been accused of overstating expenses by at least $2.4 billion. At least 11 employees, including five former chief financial officers, have pled guilty to criminal charges. Scrushy faces civil insider trading charges and has been accused of urging employees to overstate earnings.
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