HealthSouth bond litigation Update

In re HealthSouth Securities Litigation (N.D. Ala.)

D&G serves at the Court-appointed Liaison Counsel for the Retirement Systems of Alabama and a proposed class of other purchasers of HealthSouth bonds.

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. More information on those settlements - including information on the timing of expected payouts - can be found here.

Since then, we have continued to pursue claims against HealthSouth's auditor and investment bankers. Fact discovery has been completed in the case, with over 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. See the 66-page opinion here.

UBS's petition to appeal that decision to the Eleventh Circuit Court of Appeals has been denied.

Trial is set to begin October 3, 2010.

For information regarding this litigation, contact David Guin or Tammy Stokes.