Scrushy Hits Back with Wrongful Firing Suit

December 16, 2005 ( - The founder and former chief executive of HealthSouth Corp., has slapped the company with a $70-million breach of contract suit saying that, because he was cleared of criminal charges, he should not have been ousted from his job.

Richard Scrushy had been fired from the Birmingham, Alabama company after being accused of masterminding the multi-billion dollar accounting fraud scheme. The suit seeks recovery of accrued pay, bonuses, unreimbursed business expenses, severance pay, fringe and retirement benefits and the value of vested stock options, as well as legal fees and expenses, according to Reuters.

Scrushy was found not guilty in June by a federal jury in Birmingham of all criminal charges related to years of bogus accounting and fraudulent financial reporting at the health care company. However, he still faces related civil charges in a trial scheduled for 2007.

According to a statement released by Scrushy spokesman Charlie Russell on Thursday, Scrushy’s lawyers said that under his 2002 job contract, Scrushy could be terminated “for cause” including being found guilty of felony.

The statement cites Scrushy’s acquittal to support his claim that the company failed to abide by his employment contract.

HealthSouth was dragged down by the accounting scandal, which nearly put it into bankruptcy. But earlier this week, it mapped out a three-phase strategy that over the next four years was expected to improve operations and pay down debt, it said.