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A federal appeals court ruled Wednesday against former HealthSouth Chief Executive Richard Scrushy's challenge to a $445 million settlement in 2006 between the health rehabilitation company and some of its investors.
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A three-judge panel of the 11th U.S. Circuit Court of Appeals denied Scrushy's claim that the settlement should have left open the possibility of HealthSouth paying his legal bills or reimbursing him for anything he is ordered to pay investors.
The case was among several stemming from a huge accounting fraud at Birmingham-based HealthSouth.
In its order, the 11th Circuit panel said it could not determine that any errors were committed when the settlement barred Scrushy's claims for attorney fees or reimbursement.
Scrushy's attorney, David Russell, said a decision has not been made on whether to appeal to the full 11th Circuit or to the U.S. Supreme Court.
Russell said he felt the appeals court was mostly trying to keep from upsetting the $445 million settlement with its ruling. Russell said HealthSouth was supposed to reimburse Scrushy for settlements under his employment contract.
Mark Hart, a Birmingham attorney who represented some of the investors in the lawsuit, did not immediately return calls seeking comment.
While Scrushy was fired as CEO of HealthSouth after the accounting scandal was uncovered, he was acquitted of criminal charges in the fraud.
A ruling is pending on a separate civil suit filed by shareholders seeking $2.6 billion from Scrushy, who testified that he knew nothing about the scheme to inflate earnings. He is serving a nearly seven-year federal prison term on his conviction in an unrelated bribery case in Montgomery.
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