Jefferson County Circuit Court Rules Against HealthSouth In Ernst & Young Arbitration Appeal

  Jefferson County Circuit Court Rules Against HealthSouth In Ernst & Young
                              Arbitration Appeal

PR Newswire

BIRMINGHAM, Ala., April 30, 2013

BIRMINGHAM, Ala., April 30, 2013 /PRNewswire/ -- HealthSouth Corporation
(NYSE: HLS) today announced that the Circuit Court of Jefferson County,
Alabama denied the Company's motion to vacate the decision of the American
Arbitration Association (the "AAA") panel which, on December 18, 2012,
dismissed the Company's claims against Ernst & Young. HealthSouth has until
June 6, 2013, to file a notice of appeal with the Supreme Court of Alabama and
is currently evaluating whether to file such appeal.

In December 2012, the AAA panel that since July 2010 had been adjudicating the
Company's claims against its former auditor, Ernst & Young, granted Ernst &
Young's motion to dismiss the claims based on legal grounds that did not
address the underlying merits of HealthSouth's claims. HealthSouth then,
together with the stockholder derivative plaintiffs, filed a notice of appeal
of the panel's decision in the Circuit Court of Jefferson County, Alabama and
on December 28, 2012, filed the motion to vacate the AAA decision.

This arbitration has its origin in March 2003 when stockholder derivative
plaintiffs acting on behalf of HealthSouth filed a lawsuit against Ernst &
Young. Ernst & Young served as the Company's auditor during the period when
HealthSouth was a victim of fraudulent and improper accounting practices
directed by certain former officers and employees of the Company. The claims
against Ernst & Young included, among other things, that from 1996 through
2002, Ernst & Young acted recklessly and with gross negligence and failed to
perform reviews and audits of the Company's financial statements with due
professional care as required by law and by its contractual agreements with
the Company. This matter was referred to arbitration by Judge Allwin E. Horn,
III, Circuit Court Judge, Jefferson County, Alabama, and in August 2006, the
Company and the derivative plaintiffs agreed to jointly pursue the claims in
arbitration.

"We respectfully disagree with the decision of the Circuit Court of Jefferson
County," said John Whittington, Executive Vice President and General Counsel
of HealthSouth. "HealthSouth will continue to evaluate all options in regards
to its appellate rights and remains committed to seeking recovery of amounts
from parties involved during the period when improper accounting practices
directed by former officers and employees of the Company occurred."

About HealthSouth
HealthSouth is the nation's largest owner and operator of inpatient
rehabilitation hospitals in terms of patients treated and discharged, revenues
and number of hospitals. Operating in 28 states across the country and in
Puerto Rico, HealthSouth serves patients through its network of inpatient
rehabilitation hospitals, outpatient rehabilitation satellite clinics and home
health agencies. HealthSouth's hospitals provide a higher level of
rehabilitative care to patients who are recovering from conditions such as
stroke and other neurological disorders, orthopedic, cardiac and pulmonary
conditions, brain and spinal cord injuries, and amputations. HealthSouth can
be found on the Web at www.healthsouth.com.

Statements contained in this press release which are not historical facts,
such as future litigation efforts, are forward-looking statements. In
addition, HealthSouth, through its senior management, may from time to time
make forward-looking public statements concerning the matters described
herein. All such estimates, projections, and forward-looking information speak
only as of the date hereof, and HealthSouth undertakes no duty to publicly
update or revise such forward-looking information, whether as a result of new
information, future events, or otherwise. Such forward-looking statements are
necessarily estimates based upon current information, involve a number of
risks and uncertainties, and relate to, among other things, future events,
HealthSouth's business strategy, its financial plans, its future financial
performance, or its projected business results or model. Actual events or
results may differ materially from those anticipated in these forward-looking
statements as a result of a variety of factors. While it is impossible to
identify all such factors, factors which could cause actual events or results
to differ materially from those estimated by HealthSouth include, but are not
limited to, any adverse outcome of various lawsuits, claims, and legal or
regulatory proceedings involving HealthSouth, including its pending HHS-OIG
investigations; potential disruptions, breaches, or other incidents affecting
the proper operation, availability, or security of HealthSouth's information
systems; significant changes in HealthSouth's management team; changes, delays
in (including in connection with resolution of Medicare payment reviews or
appeals), or suspension of reimbursement for HealthSouth's services by
governmental or private payors; changes in the regulation of the healthcare
industry at either or both of the federal and state levels, including as part
of national healthcare reform and deficit reduction; general conditions in the
economy and capital markets; and other factors which may be identified from
time to time in HealthSouth's SEC filings and other public announcements,
including HealthSouth's Form 10‑K for the year ended December31, 2012 and
Form 10-Q for the quarter ended March31, 2013.

Media Contact
Casey Lassiter, 205-410-2777
Casey.lassiter@healthsouth.com

Investor Relations Contact
Mary Ann Arico, 205-969-6175
Maryann.arico@healthsouth.com

SOURCE HealthSouth Corporation

Website: http://www.healthsouth.com
 
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