HealthSouth Takes a Turn for the Better

With CEO Scrushy out of the picture, the stock has come back to life. However, plenty of problems -- including some doozies -- remain

Since HealthSouth Corp. launched in 1984, it has always been hard for Wall Street and the health-care industry to think of the country's largest chain of in-patient rehabilitation hospitals without its founder, CEO Richard Scrushy. Most bet the $4 billion Birmingham (Ala.)-based company would quickly collapse into bankruptcy when directors ousted Scrushy on Mar. 31 amid charges by federal investigators of nearly $3 billion in inflated profits between 1996 and 2002 (see BW, 4/14/03, "Too Good to Be True").

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