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Former CEO Scrushy sues HealthSouth

BIRMINGHAM, Ala. -- Former HealthSouth Corp. CEO Richard M. Scrushy is suing the company he founded, seeking more than $70 million for what he says was a breach of contract stemming from his March 2003 firing.

Scrushy also wants to recover legal expenses. He was fired shortly after a $2.7 billion fraud was uncovered at the rehabilitation and medical services chain.

HealthSouth board members planned to vote him off the company's board at a Dec. 29 shareholders meeting, but he resigned Dec. 4 and formally invoked provisions requiring back payment and other benefits.

Scrushy claims in the suit filed Wednesday that his employment agreement with HealthSouth should remain in force given his June acquittal on 36 criminal counts related to the fraud. He still faces civil lawsuits by the Securities and Exchange Commission and HealthSouth investors.

A HealthSouth spokesman declined to comment Thursday on the lawsuit but said the company considers Scrushy's employment contract null and void.

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