Encompass Health Corp (EHC)

[Gambit]

I have a quick question. If/When HLSH moves out of the pinksheets will your shares be carried up as well? How does that work?

I missed the bus on this one, and I was wondering if it's not too late to jump on?

[BullNBear52]

HealthSouth in talks to settle with DOJ -WSJ
Thu Dec 23, 2004 01:45 AM ET
NEW YORK, Dec 23 (Reuters) - HealthSouth Corp. (HLSH.PK: Quote, Profile, Research) is in discussions with the Justice Department about reaching a $325 million settlement of Medicare fraud claims, the Wall Street Journal reported on Thursday.
The healthcare company has said it hoped to resolve its regulatory problems by the end of the year, including an investigation by the Justice Department into Medicare reimbursement issues.

The settlement could be reached next week, people familiar with the matter told the newspaper.

Scandal-plagued HealthSouth has been accused of improperly inflating earnings by $2.7 billion over several years. The company's former chief executive, Richard Scrushy, faces a 58-count indictment for his alleged role in the scandal.

HealthSouth could not be immediately reached for comment.



http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh11564_2004-12-23_06-45-48_n23...

[extelecom]

Ex-HealthSouth CFOs finger Scrushy
Underlings tell FBI boss ordered balance sheet fraud; offered to 'take care' of employee's wife.
December 7, 2004: 8:41 PM EST


BIRMINGHAM (Reuters) - Former HealthSouth Corp. Chief Executive Richard Scrushy ordered his company's earnings and assets to be artificially inflated to prop up the stock price and exceed Wall Street expectations, two former chief financial officers told the FBI.

The accusations of fraud as well as attempted bribery at the health-care company were contained in affidavits released late Monday by a federal judge in Birmingham.

Former Chief Financial Officers William Owens and Weston Smith told FBI investigators they were told to falsify financial reports to fill the holes between actual information and the manufactured numbers the company would be reporting.

This was accomplished by padding false reports on cash accounts, inventory accounts, investment accounts, intangible assets account, and property, plant and equipment accounts, they told the FBI.

According to the affidavits, Owens said Scrushy told management in a 1999 meeting to bring HealthSouth earnings to $1.00 per share when internal records showed actual earnings to be half that amount.

Both Owens and Smith were among more than a dozen former HealthSouth officers who pleaded guilty to a variety of fraud charges in connection with what the government charges was some $2.7 billion in fraud over several years.

Scrushy last year pleaded not guilty to more than 80 counts that have since been reduced to a 58-count indictment. He is awaiting criminal trial scheduled to begin next month.

Owens, in his statements to the FBI, said Scrushy asked how much of a pay raise it would take to "control" employees with access to potentially harmful information.

Owens also claimed that Scrushy offered to "take care" of Owens's wife if Owens would agree to be the HealthSouth "fall guy."

Scrushy has repeatedly denied any knowledge of the fraud that he says was directed by underlings. Prosecutors have accused Scrushy of being mastermind of the scheme.

Scrushy attorney Arthur Leach declined comment, citing a hearing on Wednesday regarding the defense's contact with the media.

Owens said that in 1997, Scrushy told him he planned to sell a large quantity of HealthSouth shares and asked Owens to keep the financial number inflated for at least a year to avoid any suspicion of insider trading by Scrushy.

Smith said he was coerced into signing off on false financial reports filed with government regulators in 2002 with the promise of a position as CFO of a surgical hospital division the company planned to spin off. Smith said he was also told he would not be asked to falsify reports in the new division.

Scrushy told Smith that if the surgical hospital division has a bad quarter, "that would be reported as a bad quarter. We're not going to play games any more," the FBI documents said.
Copyright 2004 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.




Find this article at:
http://money.cnn.com/2004/12/07/news/newsmakers/health_south.reut/index.htm

[Joe Stocks]

HLSH- From That yahoo board
HLSH: December 2nd Update Meeting
by: mirro7 (55/M/New York/New Jersey)
Long-Term Sentiment: Strong Buy 11/27/04 04:50 pm
Msg: 255049 of 255052

The last HealthSouth meeting for its investors was held in New York City on Wednesday, June 30th, at 4:00 p.m. Eastern Time, to review its business plan and to provide an update on the status of its current operations.

The following is the summary of what was presented [as facts stated in SEC filings] and can be used as the yardstick to measure the corporate performance data that will be presented at the December 2nd [Thursday morning at 8AM] meeting in New York City.

At the June 30th meeting, the following facts were presented and are noted in various SEC filings:

-- 650MM EBITDA target for year ending December 31, 2004
-- 985.5MM Q1 2004 Net Revenue
-- 600.9MM consolidated cash as of June 25, 2004
-- 196.7MM restricted cash as of June 25, 2004
-- 404.2MM available cash as of June 25, 2004
-- Current on all interest and bond payments [since January 2004: paid 130.2MM in debt service]
-- Success of consent solicitations for all outstanding public debt [paid 80.2MM in consent fee]
-- Company has no defaults on outstanding public debt
-- Adequately funded the Digital Hospital CAPX [at 22MM]. Currently in negotiations to sell
-- Adequately funded other Maintenance CAPX [at 13.8MM]
-- Spent 37.6MM in restructuring expenses
-- Received 34.2MM from sale of non-core assets
-- New President and Chief Executive Officer, Mr. Jay Grinney, May 10, 2004
-- New Chief Operating Officer, Mr. Mike Snow, June 23, 2004
-- New Non-Executive Chairman of the Board, Mr. Robert May, elected June 30, 2004
-- Target plan for filing of audited financial statements:
* Q3 2004: Complete first close of reconstructed 2000-2003 accounting records
* Q1 2005: Comprehensive 10-K for 2000-2003 filed
* Q3 2005: 10-K for 2004 filed
* Q1 2006: 10-K for 2005 filed
-- 2005-2006: Possible NYSE re-listing
-- Bank facility resolution – establish new bank facility and retire current bank debt: Q3 2004
-- CMS/DOJ Civil Complaint resolution: Q4 2004
-- Main goal of new executive team: MAXIMIZE shareholder value
-- Top institutional holdings:
* FMR Corporation (Fidelity), 15% ownership stake, 59,464,080 shares as of February 17, 2004
* American Express Financial Corporation, 13,017,640 shares as of March 31, 2004
* Duquesne Capital Management, 9,100,300 shares as of March 31, 2004
-- Top Insider Holding:
* Mr. Joel Gordon, Chairman Emeritus, 9,000,000 shares

HealthSouth trades at a significant discount to its industry peers [trading at 5.71] and is well on the road to recovery. Earnings per share estimates [by one analyst who has reported] range from 0.46 in 2004 to 0.82 in 2007. Clearly, the best is yet to come for the new HealthSouth and any remaining rocks in the road to recovery are mere pebbles now.

Glotech

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7076888&tid=hrc&sid=7076....




Joe

[4Zoe]

AMHI has more great news..looks like this could be a good one for a possible long run...

4Zoe
<><

[4Zoe]

You might consider AMHI...it appears to have lots of "potential" for the future...

4Zoe
<><

[occams_razor]

http://www.investorshub.com/boards/read_msg.asp?message_id=3460736

[BullNBear52]

UPDATE - HealthSouth gets waiver on debt default
Tuesday June 22, 2:00 pm ET


(Rewrites first paragraph, adds quote from company, stock price, possible new chairman; changes dateline from CHICAGO)
NEW YORK, June 22 (Reuters) - HealthSouth Corp. (Other OTC:HLSH.PK - News) said on Tuesday holders of a majority of its notes have agreed to waive a default on all $2.6 billion of its outstanding public debt.

The Birmingham, Alabama, operator of rehabilitation and surgery centers defaulted on its bonds after a $3 billion accounting fraud left it unable to file audited financial statements, one of the conditions of its bonds.

HealthSouth has been making interest payments on its debt.

"With this approval by our noteholders, we have accomplished another important part of our turnaround plan that will bring us into compliance on all of our public debt issues," HealthSouth President and Chief Executive Jay Grinney said in a statement.

HealthSouth had reached terms with its creditors on June 8 after the company agreed to increase a payment to creditors to allow the default to be remedied. Some creditors were threatening to accelerate the demand for repayment on the bonds.

HealthSouth said on Tuesday it has received the consents for 6.875 percent senior notes due in 2005 and for 8.375 senior notes due in 2011.

Under the consent solicitation, HealthSouth will pay $30.00 per $1,000 in principal amount to holders of those two issues and 7.375 percent senior notes due 2006.

Holders of its 7.00 percent senior notes due 2008 will receive $32.50 per $1,000 in principal amount, while creditors owning the 7.625 percent senior notes due 2012 will receive $45.00 per $1,000 in principal.

HealthSouth says it will close on outstanding consent solicitations following the June 23 expiration date. If holders did not grant their consent to waive the defaults by that date, they would not receive the fee, the company said.

HealthSouth shares traded at $6.01, up 23 cents, on the pink sheets during early afternoon trade on Tuesday. The stock has surged from a recent low of $4.20 over the past month ahead of a June 30 investor presentation.

Shortly after the scandal that erupted in March 2003, the stock traded as low as a dime. As the prospect of bankruptcy waned, the value of the company's stocks and bonds recovered.

Separately, the Wall Street Journal reported that Robert May, the former acting chief executive of the company, is likely to be named as chairman in a board meeting this afternoon.

Chairman Joel Gordon will be named chairman emeritus and remain on the board, the paper said. Gordon is HealthSouth's largest individual shareholder, who built his stake in the company from the sale of Surgical Care Affiliates Inc. in 1995.

Representatives for HealthSouth declined to comment on the report.


http://biz.yahoo.com/rf/040622/health_healthsouth_2.html

[Dancing in the dark]

Healthsouth Corporation (OTC: HLSH) has reached agreement with its Unofficial Committee of Noteholders to obtain consents and waivers in connection with its amended consent solicitations for its 6.875% Senior Notes due 2005, 7.375% Senior Notes due 2006, 7.000% Senior Notes due 2008, 8.375% Senior Notes due 2011 and 7.625% Senior Notes due 2012, representing approximately $1.9 billion in debt. The cost of the restructuring is expected to be in the range of approximately $73 million to $80 million depending on the final level of participation in the consent solicitations.

[BullNBear52]

HealthSouth ups payment to settle debts
Tuesday June 8, 8:41 am ET


NEW YORK, June 8 (Reuters) - HealthSouth Corp. (Other OTC:HLSH.PK - News) said on Tuesday its debtholders have agreed to waive the company's default in return for an increased cash offer for their notes.
The scandal-plagued operator of rehabilitation and surgery centers said debtholders have agreed to accept as much as $45 per $1,000 of principal amount of debt. Previously the company had offered $13.75. Noteholders have accepted a range of payments starting at $30.

http://biz.yahoo.com/rf/040608/health_healthsouth_1.html

[BullNBear52]

UPDATE - HealthSouth creditors: Talks to cure default stall
Tuesday May 18, 6:17 pm ET


(Adds details, comment from HealthSouth representative)
NEW YORK, May 18 (Reuters) - Negotiations between HealthSouth Corp. (Other OTC:HLSH.PK - News) and its creditors to remedy a default of its bonds have stalled, the Unofficial Committee of Holders of HealthSouth's senior notes said on Tuesday.

The group said it wants HealthSouth, which defaulted on its bonds after an accounting scandal left the company unable to file audited financial results, to increase its payment to creditors in a consent solicitation.

"HealthSouth continues to want to resolve this on a fair and consensual basis in order to move forward with its financial restructuring," said Andy Brimmer, a spokesman for HealthSouth.

HealthSouth, which is still paying interest on the bonds, is offering to pay bondholders $13.75 per $1,000 in principal amount to bondholders that grant a waiver to the default. The group is urging the bondholders not to consent to the company's proposal.

"HealthSouth is determined to avoid paying fair compensation to bondholders by championing consents from a small minority that has either been coerced or which gave their consents to accommodate such consenting bondholders' other objectives," said Brad Scheler, counsel to the Unofficial Committee of Bondholders and an attorney at Fried, Frank, Harris, Shriver & Jacobson.

HealthSouth said last week it had received waivers from holders of its 8.5 percent senior notes due 2008 and 10.75 percent senior subordinated notes due 2008. The company had extended its consent solicitation to May 20.

"The company continues to be encouraged by the significant and positive response it has received so far under its consent solicitations, as demonstrated by the recent success of the 8.5 percent and 10.75 percent consents," Brimmer said.

The company believes this shows the market is validating its consent fees as commercially reasonable," he added.

Scheler said in a statement that holders of five of HealthSouth's six senior note issuances, which represent $2 billion of HealthSouth's $2.3 billion of senior notes have not consented. The company's total liabilities exceed $3 billion.

Last year, the Securities and Exchange Commission (News - Websites) accused HealthSouth of accounting fraud by inflating the company's financial results by billions of dollars over several years.

Several former accounting and finance executives have pleaded guilty to fraud charges. Founder and former chief executive Richard Scrushy denies the allegations.

[BullNBear52]

UPDATE - HealthSouth gets waivers on 2008 senior notes
Thursday May 13, 1:41 pm ET

NEW YORK, May 13 (Reuters) - HealthSouth Corp. (Other OTC:HLSH.PK - News) said on Thursday it obtained waivers from noteholders to remedy a default on its 8.5 percent senior notes due 2008.

The company, which is in default of its bonds due to a lack of audited financial statements after an accounting scandal, has been making interest payments on its outstanding debt, which totals more than $3 billion.

The 8.5 percent senior notes due 2008 had $343 million in principal outstanding as of September 2002, according to a Securities and Exchange Commission (News - Websites) filing made in November 2002.

HealthSouth, a provider of rehabilitation, diagnostic imaging and outpatient surgery, has been seeking consents from its bondholders to remedy the default. The consent solicitation is scheduled to expire 11:59 p.m. (0359 GMT) on Thursday.

Some of HealthSouth's creditors are seeking better terms than the consent payment of $13.75 per $1,000 in principal that the company is offering to bondholders to obtain a waiver. Those creditors went to court in Alabama to assert their rights to accelerate payment on the bonds.

HealthSouth said it is encouraged by the "significant positive response that it has received on its consent solicitation" and "the market is validating its offer as commercially reasonable."

HealthSouth is facing civil charges for accounting fraud in a case filed March 2003 that accused the company and former Chief Executive Richard Scrushy of inflating financial results. Several of its former executives have pleaded guilty to criminal fraud charges, but Scrushy denies the allegations.

[Dancing in the dark]

NEW YORK, May 3 (Reuters) - HealthSouth Corp. (Other OTC:HLSH.PK - News) on Monday said HCA Inc. (NYSE:HCA - News) executive Jay Grinney would be its new chief executive, a move meant to further the company's turnaround after a massive accounting scandal.

Grinney said in an interview he hopes to present a strategic plan to the company's board in the third quarter or fourth quarter of this year.

The Birmingham, Alabama-based operator of rehabilitation and outpatient surgery centers said Grinney would take the helm on May 10, replacing interim CEO Robert May.

At HCA, the largest U.S. hospital company, the 53-year-old Grinney served as the president of the eastern unit of hospitals since 1996.

By hiring Grinney, HealthSouth may be able to restore some confidence in the company following last year's accounting scandal in which 15 company executives have pleaded guilty and founder Richard Scrushy has been indicted for fraud.

"I want to do what I can to restore credibility with our various external publics. I plan to meet with business leaders, government leaders, legislators and try to put a new face on the company," said Grinney, who will also serve as HealthSouth's president.

Grinney's unit at HCA has about 100 hospitals and generated annual revenue in excess of $10 billion. Before he joined HCA, he worked for Houston's Methodist Hospital System for nine years.

He serves as chairman of the board of the Federation of American Hospitals.

As an HCA executive, Grinney has gone through corporate turmoil before. In 1997, the company, then Columbia/HCA Healthcare Corp., was hit by a Medicare fraud scandal that prompted a company shake-up and the ouster of its CEO.

"I don't know if the situations are identical. But clearly from an operational standpoint, there are parallels," Grinney said.

"There are some strategic parallels as well. It's the same game plan in terms of building volumes, making sure you're adequately paid for the services you are providing, controlling costs," he said.

The HealthSouth scandal, in which the company deliberately overstated earnings and assets by billions of dollars over several years, left the company in default on some of its loans and battling to avoid bankruptcy.

But the company has overhauled its board of directors, ousted Scrushy, and is working to restructure its debt, leaving analysts more confident it has put the worst behind it.

"One of the first things I want to do is to begin the process to fill some of the key senior management positions, most notably the chief financial officer position. I'm also interested in getting out and learning as much as I can about the company and where it can grow," Grinney said.

He declined to comment about some of the internal business considerations at HealthSouth, saying it was too early.

But he is hopeful that HealthSouth's operations will not be hurt by the taint of the scandal.

"For practically all the people who know HealthSouth, they know about it because of the local rehabilitation hospital or the local surgery center or the local outpatient imaging center that provides quality health care in the community," Grinney said.

When asked about the company's stock listing, which is now on the Pink Sheets, and its debt obstacles, Grinney said: "Those are going to be key issues that are going to have to be addressed and successfully resolved." (Additional reporting by Bill Berkrot)

[BullNBear52]

I'm on the sidelines for the time being. The bondholder issue is going to make or break them.

[extelecom]

I slooking attractive to buy again, but I think I'll avoid the risk here, too many other opportunities!<G>

[BullNBear52]

HLSH needs to sweeten the deal. A 1% premium is not going to cut it imo.

[extelecom]

Judge to set hearing in HealthSouth bonds case
Thursday April 15, 8:55 am ET

NEW YORK, April 15 (Reuters) - HealthSouth Corp. (Other OTC:HLSH.PK - News) said on Thursday a judge would schedule an expedited hearing in a case to determine whether bondholders can force acceleration of payments due to them after last year's accounting scandal landed the company in default.

HealthSouth said the court in Alabama did not grant its request for a preliminary injunction and dissolved a temporary restraining order against acceleration by bondholders.

But it said the court stated that the parties involved should not take the decision to mean the court has ruled that default notices issued by some bondholders are validly and legally issued, and that it would set a hearing date. Lawyers for the bondholders said in a letter to the court that the bondholders would not issue any notice of acceleration for at least 30 days, as long as HealthSouth engages in good-faith negotiations.


Email this story - Set a News

[BullNBear52]

HealthSouth Says Group May Force Bankruptcy
By THE ASSOCIATED PRESS

Published: March 30, 2004

Filed at 4:39 p.m. ET

BIRMINGHAM, Ala. (AP) -- The acting chief financial officer of HealthSouth Corp. testified Tuesday that bondholders seeking quicker debt payments could force the rehabilitation giant into bankruptcy.

The testimony from Guy Sansone came as HealthSouth tried to convince a court to rule that funds holding about $2.5 billion in bonds don't have the legal right to seek repayment on an accelerated schedule.

Circuit Judge Allwin E. Horn III said he would not rule for at least 10 days on the question, which Sansone characterized as being vital to the future of the scandal-plagued company.

HealthSouth has been struggling for survival since a year ago, when the government accused the company and then-CEO Richard Scrushy of overstating profits by billions.

HealthSouth filed suit earlier this month in its hometown of Birmingham seeking to keep bondholders at bay. It contends bondholders previously waived their right to accelerated payments.

Sansone, a managing director with the turnaround firm Alvarez and Marsal, said repaying bondholders on an stepped-up pace would throw HealthSouth into default on other debts.

``We believe that acceleration would lead to a Chapter 11 (bankruptcy), which would be shameful after all we've been through,'' Sansone testified in a hearing.

Evidence showed HealthSouth has offered bondholders a premium of 1 percent -- $25 million to $27 million -- to waive the right to accelerated repayments, but creditors want as much as 11 percent, or as much as $297 million.

Under questioning from bondholder attorney William Brooks, Sansone acknowledged that HealthSouth was still months away from giving creditors and investors annual audited statements to verify its finances.

Instead, Sansone said, HealthSouth is giving bondholder advisors frequent financial updates. Sansone said those reports are better than statements filed with the Securities and Exchange Commission.

``I don't think that's true at all,'' replied Brooks, noting that the HealthSouth reports include disclaimers stating they may not be correct.

HealthSouth has $650 million in cash and is trying to get back into a growth mode, Sansone said. The company is ``substantially'' better off than it was when the accounting scandal broke a year ago, he said.

``It was in chaos,'' he said.

Officials have completed the field work on a forensic audit to determine HealthSouth's finances, Sansone said, and a special committee of directors has the information. The company hopes to release statements for 2003 by the end of the first quarter of 2005, he said.

The company has said it expects the forensic audit to show earnings were overstated by as much as $4.6 billion over a decade.

Seventeen former HealthSouth executives have pleaded guilty in the fraud, and Scrushy is free on $10 million bond awaiting an August trial. He has pleaded innocent.

HealthSouth calls itself the largest U.S. provider of rehabilitation therapy, diagnostic imaging and outpatient surgery center. The company has more than 46,000 employees and about 1,700 sites in all 50 states and abroad.

http://www.nytimes.com/aponline/business/AP-HealthSouth.html

[BullNBear52]

Catch up on the DD here.

[sdhollen]

HealthSouth Granted Temporary Restraining Order to Prevent Acceleration of Notes

BIRMINGHAM, Ala., Mar 12, 2004 /PRNewswire-FirstCall via COMTEX/ -- HealthSouth Corp. (OTC Pink Sheets: HLSH) today announced that the Circuit Court of Jefferson County, Alabama, has granted its request and issued a temporary restraining order to prevent acceleration of its outstanding notes.

HealthSouth said it sought this relief to prevent certain holders of its notes from accelerating their indebtedness, which HealthSouth believes would cause substantial harm to its enterprise value and all of its stakeholders. The suit also seeks a judicial determination regarding several indenture issues, including the applicability of certain acceleration and payment provisions. HealthSouth said it is hopeful these actions will assist the Company in reaching a consensual agreement with these noteholders with respect to certain technical defaults and in completing its restructuring.

The Special Committee of HealthSouth's board, its new management team and its more than 46,000 employees have worked tirelessly since the events of March 2003 to restore credibility with its patients, doctors, employees, creditors, stockholders and other constituencies. HealthSouth said it is current on all principal and interest payments and has made great progress in its turnaround.

About HealthSouth

HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with nearly 1,700 locations nationwide and abroad. HealthSouth can be found on the Web at www.healthsouth.com.

SOURCE HealthSouth Corp.

Andy Brimmer, [phone], for HealthSouth Corp.

http://www.healthsouth.com

[Dancing in the dark]

institutional holders of healthsouth as of 12/31/03

…………………………………………………….. 31-Dec ……………….. net change from 09/30/03

FMR Corp. (Fidelity)…………………………… 59,464,080 ……………….. 9,330,780
Brahman Capital Corp 4,895,700 ……………….. 4,895,700
American Express Financial Corp………… 9,000,900 ……………….. 1,592,985
Lehman Brothers Holdings Inc………………… 1,688,557 ……………….. 1,560,675
S Squared Technology Corp……………….. 1,100,000 ……………….. 1,100,000
Westfield Capital Management Co LLC….. 837,800 ……………….. 837,800
Russell Frank Co 708,500 ……………….. 708,500
Ci Mutual Funds Inc…………………………… 400,000 ……………….. 400,000
Jemmco Investment Management LLC……….. 403,948 ……………….. 348,193
US Trust Corp/NY 103,110 ……………….. 103,110
Duquesne Capital Management, L.L.C. 100,000 ……………….. 100,000
Hussman Econometrics Advisors Inc………… 350,000 ……………….. 100,000
Loeb Arbitrage Management Inc………………. 186,000 ……………….. 50,000
Friedman, Billings, Ramsey Inv Mgt Inc 20,512 ……………….. 20,512
Old Mutual Asset Managers Uk Ltd………….. 30,700 ……………….. 9,900
Highland Capital Management Corp…………… 47,628 ……………….. 4,440
Commerce Bank NA………………………….. 43,000 ……………….. 2,500
Amsouth Bancorporation……………………….. 10,061 ……………….. 1,061
Tal Global Asset Management Inc 699 ……………….. 699
Aberdeen Asset Management PLC UK 200 ……………….. 0
Bank One Corp………………………………… 4,214 ……………….. 0
Cohen Klingensein & Marks Inc……………. 37,000 ……………….. 0
Excalibur Management Corp……………….. 40,000 ……………….. 0
Haberer Registered Investments Inc………. 10,000 ……………….. 0
Keybank National Association………………… 18,150 ……………….. 0
National City Corporation………………………. 14,000 ……………….. 0
Regentatlantic Capital LLC…………………….. 835 ……………….. 0
Shell Pensions Mgmt Services Ltd…………. 1,513 ……………….. 0
STRS Ohio……………………………………….. 182,600 ……………….. 0
Synovus Financial Corp……………………… 2,000 ……………….. 0
Leavell T & Associates………………………. 26,700 ……………….. -2,700
RBC Dain Rauscher Corp………………………. 8,055 ……………….. -4,843
Al Frank Asset Management Inc……………… 91,625 ……………….. -9,550
California Public Employee System……….. 81,500 ……………….. -90,600
JMG Capital Management LLC……………….. 25,400 ……………….. -105,000
Pacific Asset Management LLC………………. 25,400 ……………….. -105,000
Wells Fargo & Co………………………………. 147,316 ……………….. -127,990
Meeder Asset Management Inc…………….. 6,148 ……………….. -245,786
Gruber & McBaine Capital Mgmt LLC……. 3,996,000 ……………….. -260,000
Greene David J & Co……………………………. 4,677,611 ……………….. -925,720
Forstmann Leff Associates LLC………………. 5,353,700 ……………….. -1,207,500
GMT Capital Corp………………………………. 4,946,390 ……………….. -1,580,710
Advest Inc………………………………………… no report yet ………………..
Axa Financial Inc……………………………….. no report yet ………………..
Bankmont Financial Corp………………………. no report yet ………………..
Barclays Global Investors NA…………………. no report yet ………………..
Citadel LP……………………………………….. no report yet ………………..
Dresdner Bank AG……………………………… no report yet ………………..
Fraser Management Associates Inc………….. no report yet ………………..
Fulton Financial Advisors NA…………………. no report yet ………………..
Gartmore Mutual Fund Capital Trust………….. no report yet ………………..
Moore Capital Management Inc……………….. no report yet ………………..
Private Capital Management Inc………………… no report yet ………………..
Ramius Capital Group LLC…………………….. no report yet ………………..
Schroder Investment Mgmt Group……………. no report yet ………………..
Staro Asset Management, L.L.C……………… no report yet ………………..
Trinity Capital of Jacksonville Inc………………. no report yet ………………..

99,087,552 (25.0%) of outstanding 396,427,172

[dirk]

wath is te acual p/e of healtshout, ore the EPS

[jmhollen]

HealthSouth Corporation Elects Steven R. Berrard and Edward A. Blechschmidt to Board of Directors

BIRMINGHAM, Ala., Feb 2, 2004 /PRNewswire-FirstCall via COMTEX/ -- HealthSouth Corp. (OTC Pink Sheets: HLSH) today announced the election of Steven R. Berrard, 49, and Edward A. Blechschmidt, 51, to its board of directors and to the special committee of its board of directors, effective January 31, 2004. Berrard is a former vice chairman, president and chief executive officer of Blockbuster Entertainment Group, a division of Viacom, Inc. Blechschmidt is a former chairman and chief executive officer of Gentiva Health Services and former chief financial officer of Unisys Corp.

Berrard brings a strong financial and administrative background to the HealthSouth board of directors. He is co-founder and principal of New River Capital, a private equity fund that invests in both public and private companies at different stages of maturity. He co-founded and worked until 1999 as co-chief executive officer of AutoNation, Inc., which through its affiliated dealers is the largest new and used vehicle retailer in the United States. He also served as vice chairman of Blockbuster Entertainment Corporation prior to its acquisition by Viacom in 1994.

Florida Governor Jeb Bush appointed Berrard to the board of directors of North Broward Hospital District, one of the ten largest public health systems in the United States. He currently serves on the board of directors of Boca Resorts, Inc. and served on the board of directors of Birmingham Steel Corp.

Berrard held various finance positions in his career, including chief financial officer of Blockbuster. He holds an accounting degree from Florida Atlantic University and has worked as an auditor for Coopers & Lybrand, LLP

Blechschmidt brings extensive experience across diverse industries and a strong healthcare, financial and technology background to the HealthSouth board. Under Blechschmidt's leadership, Gentiva Health's market valuation more than tripled, and the company was named to Fortune magazine's prestigious "Fortune 1000" list.

Blechschmidt served as chief executive officer and director of Olsten Corporation. He also served as president and chief executive officer of Siemens Nixdorf Americas and Siemens' Pyramid Technology. Prior to Siemens, he spent more than 20 years with Unisys Corp., a global provider of information technology and consulting services. He has chaired Unisys' worldwide corporate quality council and was a member of the board's ethics committee. Blechschmidt serves on the boards of directors of Gentiva Health Services, Inc., Neoforma, Inc., Lionbridge Technologies, Inc., and Garden Fresh Restaurant Corp.

"Steve and Ed bring extensive financial, administrative, and healthcare experience to the board," said Joel C. Gordon, acting HealthSouth chairman of the board. "We are very pleased to have them join us as new independent directors, and we look forward to their help in continuing to develop HealthSouth's platform for future growth and success."

The addition of the two new directors is another step in the board transition plan announced in December 2003 and a result of the company's ongoing efforts to bring on more independent directors and to strengthen the company's governance program.

About HealthSouth

HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with nearly 1,700 locations nationwide and abroad. HealthSouth can be found on the Web at www.healthsouth.com .

CONTACT:
Andy Brimmer
HealthSouth Corp.
205-410-2777.

SOURCE HealthSouth Corporation
Andy Brimmer of HealthSouth Corp., [phone]
http://www.healthsouth.com

[extelecom]

BNB, Thanks, I am watching and slowly adding...

[BullNBear52]

I would advise a word of caution on this stock. IMO it will take a hit eventually for civil penalties from the SEC. It will also take a hit from Medicare and Medicaid for filing cost reports if they relied on the financials in question. (That they can't escape from.) If today's news of alleged bribery is true tack on another civil penalty.

However on the plus side the company is composed of bricks and mortar and will survive imo. There are a lot of unanswered questions as to the dollar amounts that they will get hit with regarding civil penalties.

FWIW, I have owned this stock a couple of times but do not own it currently. I'm on the sidelines right now.

[extelecom]

Thanks B&B... Would be a big step...

[BullNBear52]

HLSH has to bring all filings current with the SEC and meet the requirements of the board they apply for. They are still undergoing a forensic audit and until that is completed and restatements filed it's anyone's guess.

[nwsailor]

Health Care Services Industry Profile

Profiting from someone else's misery isn't as easy as it seems, but the opportunity is present. The US health care services market, the world's largest, is worth nearly $1.4 trillion, while the European market is worth about $700 billion. Many companies, though, have failed miserably trying to claim some of that money.

A problem (and an opportunity) is the rising demand for services. People are living longer and need more care. The rise and fall of long-term care centers in the US is an example of the peril. Such firms as Kindred Healthcare, Sun Healthcare, and Beverly Enterprises, which once built and bought nursing homes and opened home care and other specialized care units, are now hurting. Taking care of patients requiring expensive drugs and other care drains budgets. Cutbacks prescribed in the 1997 Balanced Budget Act didn't help: Starting in 1998, providers were reimbursed based on per-day cost caps, not on the total cost of care.

In most nations, though, the government controls health care, but many of those are also suffering as costs rise and demand exceeds capacity. The UK National Health Service has announced it will team with such private sector providers as BUPA to help clear crowded waiting rooms.

Slashed budgets create a domino effect. The competition among health care supply distributors, including Alliance UniChem, McKesson, and Owens & Minor, has heated up as facilities look to cut their number of vendors and the costs of their supplies. These distributors are among the industry's leaders in adopting new technology to help cut costs.

Technology may not be the industry's panacea. Loading patient and payor information, supply orders, and other administrative red tape onto computers organizes information and helps reduce costly errors, but many doctors are reluctant; after all, learning the system takes time -- time that could be spent providing care to patients. Technology solutions are also pricey and don't often fit into budgets.

[extelecom]

Joe, Perhaps you are correct. As one of those that got burned someaht in the last great bubble it is difficult for me to sit on a profit for long. I am seeing the error of my ways in some cases.

[Joe Stocks]

ET- Fundmentals and time usually work out well. HLSH has excellent value down at this level. One just needs to wait it out. It was ridiculus that this company had a market cap of just $35 mil less than a year ago. I would trying to trade in and out of these extremely undervalued stocks is pointless when many holders are so edgy. Just wait them out IMO. The value will be there eventually. In general, I think most stocks are too high and i am finding it hard to find canidates like this.

[Joe Stocks]

>>>heard on the news that one of th ehospitals in CA was selling several hospitals and having to spend literally billions to upgrade others to CA earthquake standards. Would you expect HLSH to bear a similar fate here?<<

That's the first I heard of that. I thought they had been building for earthquakes in Ca. for years and years. I don't see that is being an issue with HLSH.

[extelecom]

Thanks again Joe, I am slowly trying to accumulate a little, I have been watching its rise waiting for an Opp. to get in over last several months. Only wish I had of had the faith you have had.

[Joe Stocks]

HLSH- I would say that for HLSH to get relested they will need some spotless financials. Now they are talking that those won't be ready until early 2005. I hope it will be earlier than that but I may have to wait until then.

[nwsailor]

Joe,
I recently added HLSH to the port as a LTBH. Thanks for the heads up. Bought in at 5. I heard on the news that one of th ehospitals in CA was selling several hospitals and having to spend literally billions to upgrade others to CA earthquake standards. Would you expect HLSH to bear a similar fate here?

[extelecom]

Joe, Do you have any idea what it will take for HLSh to get off the OTC market? I notice Yahoo lists it as a pink sheet stock and they don;t keep up with any current financial info. like normal stocks..

[Joe Stocks]

>>Anyone have any thoughts on effect to HLSH?<<

I don't think it will have much effect here. I think it will tend to put a damper on much of a move up absent and good news to offset it. We could see a short term dip, but I would think we would soon return to a trading range between $5 and 5.50. I think we could stay in that range for the next few weeks. Again, absent any stock moving news. HLSH gets dull here for awhile IMO.

[dblpc]

Anyone have any thoughts on effect to HLSH?

[Joe Stocks]

Report: Feds expand HealthSouth probe
By CBS MarketWatch
Last Update: 1:24 AM ET Jan. 29, 2004


SAN FRANCISCO (CBS.MW) -- The Justice Department is expanding its probe of HealthSouth to investigate possible violations of federal antibribery laws in connection with its business in the Saudi Arabian health-care market, according to a published report.

in the online edition of the Wall Street Journal on Thursday, citing people familiar with the probe, said investigators are trying to determine whether HealthSouth (HLSH: news, chart, profile) provided kickbacks in a project to develop a hospital near Riyadh, Saudi Arabia, in 2000.

The Journal report said the inquiry is part of the federal government's investigation into a $4 billion accounting fraud at the Alabama-based operator of rehabilitation facilities.

Last week, former HealthSouth chief executive Richard Scrushy reached a deal with U.S. prosecutors to get access to some of his assets, which were frozen last year. Scrushy and more than a dozen other former HealthSouth executives all have been charged in federal court in connection with their alleged roles in the accounting fraud.

Representatives from HealthSouth could not be reached early Wednesday to comment on the Journal story. The Journal reported Scrushy's attorney, Thomas Sjoblom, said his client had nothing to do with the Saudi Arabia contract.

Shares of HealthSouth fell 4 cents on Wednesday to close at $5.25.

[jmhollen]

Thanks for the input, Joe.

John

[Joe Stocks]

HealthSouth Ends Stock Option Awards For Execs

BIRMINGHAM, Ala. (AP)--Ending a practice that may have provided motive for a
huge accounting fraud, HealthSouth Corp. (HLSH) said Friday it would quit
giving its directors stock options.
Instead, the company will provide top officials with restricted shares of
existing common stock. In the first such award, it gave directors shares worth
$50,000 each.
The move to drop options was part of a new corporate governance plan adopted
earlier this month, said HealthSouth spokesman Andy Brimmer.
Brimmer said eliminating options - which critics say can encourage
executives to inflate share prices unrealistically - was consistent with the
new federal Sarbanes-Oxley law meant to rein in corporate corruption.
"It's to bring the interests of directors in line with shareholders," said
Brimmer.
Documents filed with the Securities and Exchange Commission show HealthSouth
made stock awards worth $50,000 each this week to interim chairman Joel
Gordon, interim CEO Robert May and two new directors, Jon F. Hanson and Lee
Hillman.
The company said three more longtime directors who stepped down in a legal
settlement won't get the stock because they will be off the board by Dec. 31,
the vestment date. They include Larry Striplin, Sage Givens and John
Chamberlin.
Doug Jones, an attorney for investors suing HealthSouth, said eliminating
options may be a step in the right direction, although he was unfamiliar with
the specifics.
Options awarded to former HealthSouth executives provided some of the
incentive for leaders to overstate earnings to meet Wall Street forecasts, he
said.
"It's a circular kind of thing," said Jones, a former U.S. attorney in
Birmingham. "The more they cook the books, the more the share price goes up.
The more the share price goes up, the more their options are worth."
Prosecutors contend former chairman and chief executive Richard Scrushy
increased the value of his HealthSouth options by masterminding a scheme to
inflate earnings for years.
Scrushy has pleaded innocent and blames the fraud on subordinates. Fifteen
former HealthSouth executives - some of whom also had received stock options -
have pleaded guilty and are helping investigators.
The government has filed papers stating Scrushy exercised more than $55
million worth of stock options in 2002, his last full year with HealthSouth.
In all, Scrushy is accused of making $267 million in salary, bonuses and stock
options through the scam.
With options, workers receive a chance to purchase shares at a certain price
by a future date. Opponents contend the practice can encourage executives to
orchestrate corporate moves to increase the value of their options.

(END) Dow Jones Newswires

[Joe Stocks]

HealthSouth Loan Highlights Role Of Hedge Funds

By NICOLE BULLOCK

Of DOW JONES NEWSWIRES
NEW YORK -- The loan that gave ailing HealthSouth Corp. (HLSH) a boost as it struggles to overcome a billion-plus accounting scandal demonstrates the expanding role of hedge funds as corporate lenders.

Last week, Birmingham, Ala.-based HealthSouth , which has been dealing with allegations of improper accounting that now may total up to $4.6 billion, got a $355 million check from financial advisor Credit Suisse First Boston to pay off convertible bonds that were due last April.

It was risky for CSFB, given the myriad of problems facing HealthSouth . But a handful of hedge funds willing to take up some of the exposure eased the pain. CSFB declined to comment on how much of the loan it retained.

It's not the first time hedge funds have stepped in with funds that have helped a company get over a nasty financial hump or even sidestep bankruptcy when more traditional sources of borrowing were either unavailable, limited or less attractive.

Hedge funds played an active role in the restructuring of debt in the merchant energy sector in 2002 and 2003 when a liquidity squeeze coincided with a big retrenchment by banks and institutional investors.

About a year ago, hedge funds came in for a bond deal to American Tower Corp. (AMT), that enabled it to pay off a convertible bond issue, sources familiar with the deal said. At that time, tower companies were out of favor and the convert was out-of-the money, which meant the company risked repaying the $217 million principal in cash instead of shares.

In a perfect world, these are stop-gap transactions that are refinanced later with junk bonds at lower rates. And many of them have been thanks to the huge high-yield bond rally over the last year.

"It's a tremendous void that the hedge funds are filling," said Dhruv Narain, a managing director in the restructuring group at CSFB, who worked on the HealthSouth loan. "This type of financing in general isn't cheap, but it's better than the alternative. If it weren't for this market, a lot of companies would have had to file for bankruptcy."

The lure for the hedge funds is typically an attractive yield. In a market where yield is scarce, HealthSouth's seven-year loan offered some juice, even if it is much lower than levels seen on some earlier deals involving hedge funds.

The loan has a coupon of 10 3/8%, but includes warrants for 10 million shares at a strike price of $6.50. That takes the yield to about 11.25% to 11.50%, Narain estimated. HealthSouth shares were last quoted Friday at $5.40, down 1 cent or 0.2% on the day, on the over-the-counter Bulletin Board.

The loan is subordinated to about $370 million in bank loans and $2.3 billion in bonds.
HealthSouth , whose operations include rehabilitation services and outpatient surgery, turned to an alternative source of funds for a reason. Its circumstances would have left lots of other investors at bay - even in a loose lending environment. Time also looked like it could be running out.

HealthSouth was months past due on the $344 million convertible bonds. What's more, its failure to provide current audited financial reports had put the company in technical default on the rest of its bank and bond debt. Even though HealthSouth had paid the interest on these obligations, the holders had the right to accelerate their obligations, or call for payment. Such a move could have thrown the company into Chapter 11, even though a bankruptcy resulting from a technical default is rare.

HealthSouth has no audited reports for 2002 or 2003. The Justice Department alleges that HealthSouth Founder Richard M. Scrushy and other executives artificially boosted income back to 1996. Heading into 2004, negotiations to restructure the convertible bonds were turning up proposals that were more expensive for the company than the transaction ultimately put into place, said George Varughese, a managing director at Alvarez & Marsal, the turnaround specialists hired by HealthSouth last year.

"This is a company that really was on its deathbed nine months ago. It has no financials, audited or unaudited," Varughese said "In the face of all that, the fact that the loan got done is a testimony to how strong the market is and how well the company has restructured itself. We view this as the market validating the restructuring the management and the board is engineering."

The loan removed the payment default hanging over HealthSouth and prompted a rally among existing bonds.

On Tuesday, the company told its stock and bond investors it planned to have audited and restated financial reports next year. A new management team, including a new chief executive to succeed ousted founder Scrushy, will be in place by this summer.

Since March 2003, 15 former accounting and finance executives have pleaded guilty. Scrushy was indicted in October for his alleged role. He denies any wrongdoing and faces an August trial in federal court.

-By Nicole Bullock, Dow Jones Newswires, 201 938 2039; [e-mail]

[jmhollen]

My comment was related to the new board members and officers who seem to be dealing with the issues in a forthright manner.

Where the company "was" doesn't mean much, where it's going now is why the price trend is up (..from $0.10 ten+/- months ago when I started watching it..).

John

[BullNBear52]

Dilligently? That information was known to the company in July imo and they failed to disclose it. Financial statements are an integral part of Cost Reports. Go look what happened to HCA.

[jmhollen]

I think it's a good sign that they are dilligently cleaning out all the old closets and cobwebs. It will be interesting to see how well the company really does after they've got it relisted and tuned-up.

It's still hard to believe that this was at $0.10+/- when I first stumbled across it on Pinksheets.com.

John

[BullNBear52]

HealthSouth widens fraud estimate
Officials call operations stable; maintain outlook

WASHINGTON (CBS.MW) - HealthSouth said Tuesday its accounting fraud was much larger than previously thought and may have topped $4.5 billion.

The company also maintained its full-year earnings projections for 2004, signaling it's trying to overcome the consequences of the massive accounting scandal that has rocked the Birmingham, Ala.-based healthcare giant.

In its second meeting with investors since the scandal broke 10 months ago, HealthSouth said its operations are stable and improving and signaled that a new chief executive officer could be hired by the end of the second quarter.

"We continue to make progress each and every day," said Joel Gordon, the company's acting chairman and one of its largest investors. "While we still face rocks in the road, they are manageable."

In addition, company officials increased the dollar amount of accounting errors its forensic accounting team has uncovered. The number now falls in the range of $3.8 billion to $4.6 billion, up from around $2.5 billion last July.

In 2004, HealthSouth (HLSH: news, chart, profile) expects to generate net revenue of $3.95 billion and earnings before interest, taxes, depreciation and amortization of $650 million.

Shares fell 26 cents Tuesday to close at $5.93.

It plans to produce about $277 million in free cash flow. It currently has $527 million of total cash. Total outstanding debt is $2.85 billion.

The company estimates it will incur restructuring costs of $91 million related to the accounting fraud and closing down facilities.

One of HealthSouth's chief concerns is resolving improper Medicare reimbursement claims. It plans to reach a global settlement with the Justice Department. Company officials declined to elaborate on the costs or timing of such a deal.

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&gui....

[george8]

Joe:

Thank you for patching over excellent posts like this. Please continue.

George

[Joe Stocks]

Is HLSH over or under valued? (From Yahoo)
by: corstrat
Long-Term Sentiment: Strong Buy 01/21/04 08:08 am
Msg: 172096 of 172148

omar2552- "Stock Value is in the eyes of the beholder".

Anyone who tries to tell you that there is some "magic" formula that values actual stock prices is brain damaged. Stock trading prices are probably based on something like 40% true value and 60% perception.

Had SCHB not had his monster seller yesterday pressing the stock to its daily low, below the prior days close going into the meeting, then the odds are pretty good that the stock would have continued to go up today from say a hypothetical $6.50 level. The old trading adage never fails. "Stocks going up make stocks go up. Stocks going down make stocks go down"

I have been asked many times on this board to give some sort of stock price estimate for a specific point in time. The reason I always refuse is that after 31 years in this industry, I have learned that "Wall Street has a way of eventually humbling everyone" and I sure have been a victim of that several times in the past.

IMO, just taking the 40% that I mention above, the stock is well undervalued based on pure fundamentals that we heard yesterday. This based on only 400 million shares with 650 million projected ebitda, $1.25 per share cash and their perennial money losing Diagnostics Division turning around. But does that mean the stock can't go lower over the next few days or weeks? Of course not.

I am sure there are many holders out there that believe they can outsmart the market by selling now and buying back at a lower price while still truly believing that we have a $20 stock 18 months from now. There are others who feel that they have some other stock that they can put the proceeds in and do better then 300 or 400% during the same period of time. So of course they are going to sell. We have seen this happen time and again in this stock. We saw it at .40 a share, we saw it at .90 a share, 1.90 a share, 3.00 a share and 5.00 a share. And we are going to see it at many more price levels over the next 18 months until we get re-listed and to a lesser extent after that time.

But in the "real" world. What we heard yesterday should have been "a beautiful symphony" to the ears of anyone who intends to hold this stock for the long haul. We heard that the numbers that were announced last July were now "right on" or a little better overall. Numbers and events that virtually no one really believed at that time. I say this because if most did believe it, the stock would have spiked to and stayed at this current level at that time. We had confirmed yesterday that there is no risk of BK, something that a few of us were trying to say back in April. We had confirmed that the company is quite profitable. We found out that the company has paid all back commitments which were not being paid in July yet has more cash in the bank today then it did back then. And we had specifically confirmed what several of the old-timers here have been telling us all along. That “ironically, old management didn’t seem to mind screwing the shareholders and SEC, but for some reason he didn’t screw with Medicare”.

So, in answer to your question, but speaking only for this beholder. Yes, The stock in my eyes is very undervalued.

[jmhollen]

http://www.pcquote.com/stocks/news.php?symbol=hlsh

[Joe Stocks]

Weekly Stats-This last week was...(From Yahoo)
by: bborden (52/M/TX to FL now WA)
Long-Term Sentiment: Strong Buy 01/16/04 07:14 pm
Msg: 169251 of 169404

Well what can I say that hasn't already been said.

An investment for several years to come.

Healthsouth Weekly Stats
WkEnd____________Week_______%Chg______%Chg
Date_____Close____Volume_____WktoWk___from 3/28

03/28/03__0.080__398,846,500
04/04/03__0.125__ 87,140,300______ 56%_______56%
04/11/03__0.165__ 63,205,000______ 32%______ 106%
04/18/03__0.150__ 24,523,800______ -9%______ 36%
04/25/03__0.140__ 35,004,700______ -7%______ 75%
05/02/03__0.178__ 75,748,700______ 27%______ 123%
05/09/03__0.285__ 52,344,700______ 60%______ 256%
05/16/03__0.320__ 65,486,700______ 12%______ 300%
05/23/03__0.275__ 42,530,200______ -14%______ 244%
05/30/03__0.300__ 24,973,300_______ 9%______ 275%
06/06/03__0.560__ 82,436,800______ 87%______ 600%
06/13/03__0.565__133,822,100______ 1%______ 606%
06/20/03__0.480__ 37,406,100______ -15%_____ 500%
06/27/03__0.490__ 33,246,200_______ 2%______ 513%
07/04/03__0.900__ 76,702,200_______84%______1025%
07/11/03__1.500_145,984,800_______ 67%_____ 1775%
07/18/03__1.390__ 46,888,200_______ -7%_____ 1638%
07/25/03__1.720__ 36,683,600_______ 24%_____ 2050%
08/01/03__1.620__ 35,820,600_______ -6%______1925%
08/08/03__1.600__ 16,462,100_______ -1%_____ 1900%
08/15/03__2.340__ 57,108,700_______ 46%_____ 2825%
08/22/03__2.417__28,049,800_________3%______2921%
08/29/03__3.230__33,590,900________34%______3938%
09/05/03__3.200__22,027,800________-1%______3900%
09/12/03__3.000__21,302,700________-6%______3650%
09/19/03__2.970__22,809,400________-1%______3613%
09/26/03__2.740__15,492,400________-8%______3325%
10/03/03__2.990__17,097,200_________9%______3638%
10/10/03__2.910___8,105,300________-3%______3538%
10/17/03__2.790___9,809,700________-4%______3388%
10/24/03__2.960___9,754,100_________6%______3600%
10/31/03__2.830___7,587,500________-4%______3438%
11/07/03__3.250__21,025,500________15%______3963%
11/14/03__3.450__15,061,800_________6%______4213%
11/21/03__3.500___9,445,200_________1%______4275%
11/28/03__4.190__13,463,300________20%______5138%
12/05/03__4.780__19,675,200________14%______5875%
12/12/03__4.630__11,441,200________-3%______5688%
12/19/03__4.450___5,400,100________-4%______5463%
12/26/03__4.490___3,292,500_________1%______5513%
01/02/04__4.750___6,232,600_________6%______5838%
01/09/04__4.970__19,961,900_________5%______6113%
01/16/04__6.190__30,003,100________25%______7638%

[Joe Stocks]

A couple clarifying thoughts (from Yahoo)
by: nosleepatnight (42/M/Utah)
Long-Term Sentiment: Buy 01/16/04 10:03 pm
Msg: 169318 of 169404

I have not had time to read all of the messages that have been posted since the news release today. My apologies if this has already been addressed.

From what I have read, it seems that there is some confusion regarding CSFB's role in this deal, as well as what consideration CSFB received for advising on the transaction. The confusion is understandable because, as usual, the various news releases conflicted. Some reported, for example, that CSFB received the warrants. I don't think that is the case.

The following is the press release taken from HLSH's website. I would assume that this is the language from the 8k and the most accurate.

"BIRMINGHAM, Ala. - HealthSouth Corporation (OTC Pink Sheets: HLSH) announced today that it refinanced its 3.25% Convertible Subordinated Debentures due April 1, 2003, from the net proceeds of a $355 million loan arranged by Credit Suisse First Boston. The new senior subordinated term loan has an interest rate of 10.375% per annum, payable quarterly, with a 7-year maturity, callable after the third year with a premium. HealthSouth also issued warrants to the lender to purchase 10 million shares of common stock. Each warrant will have a term of 10 years from the date of issuance and an exercise price of $6.50 per share."

Notice that this press release says that CSFB "arranged" the loan. Notice further that the press release says that HLSH "issued warrants to the lender."

If CSFB was not the lender, then, according to the HLSH press release, CSFB does not hold the warrants. Thus, imo, what CSFB will do to assist HLSH in the future will not be motivated by stock appreciation.

CSFB is acting in the role of an investment banking advisor here and will receive a very hefty fee. It chose to take this fee rather than continue to own the stock when it assumed the advisory role to HLSH back in July.

As I said, I have not read all of the posts, but from what I read, Liquidity Ranger summed it up the best. This deal is a win win. The deal had to be a little painful for the shareholders to compensate the holders of the convertable. I believe there will be a little more pain in terms of sweetners offered to the senior debtholders. It's OK in the scheme of things. As many have mentioned, it was the price to rid the company of Scrushy.

I will be curious to see what happens to the line of credit. This new term loan to replace the convertable, rather than a payoff, underscores the need for the company to maintain liquidity. I am guessing that nothing else will be announced on Tuesday regarding deals consumated with the lenders. There will be a brief update stating that negotations are ongoing and progressing satisfactorily.

There is not question in my mind that the numbers are good. Otherwise, I think the new lenders on this term loan would have demanded security. An unsecured loan of 355 million suggests a very sound business.

In my mind, things could not be going any better. Continued best wishes to all.