Encompass Health Corp (EHC)

[aktony]

THE NEWS...

< Previous / Next > [ First / Last / Msg List ] Msg #: Reply Post
Recommend this Post - This post has 4 recommendations Ignore this User / Report Abuse
full bloomberg story just released
by: cowardly_long 04/29/03 03:29 pm
Msg: 57946 of 57952

HealthSouth Likely to Seek Bankruptcy, Company Official Says
By Keith Snider

Birmingham, Alabama, April 29 (Bloomberg) -- HealthSouth Corp., the hospital company accused of accounting fraud, probably will file for bankruptcy in the next few months with the consent of bankers and bondholders, a turnaround specialist hired by the company said.

HealthSouth will seek Chapter 11 protection in U.S. bankruptcy court unless a forensic audit due to be finished in June shows the company can support its $3.3 billion debt, said Bryan Marsal, who was hired in March as the company's chief restructuring officer.

Marsal, co-director of New York-based Alvarez & Marsal, said HealthSouth would spend July and August trying to convince creditors to back the bankruptcy plan and file for protection soon after. Under U.S. bankruptcy law, a company usually has to get a majority of creditors, representing two-thirds of its total debts, to accept a Chapter 11 reorganization plan before it can go to a federal judge for final approval.

``That's what makes the most sense to us,'' Marsal said in an interview. ``The lenders would wait until they have a fact-based assessment and then go in with a prepackaged Chapter 11. We'd like to do it in a planned fashion.''

HealthSouth, which inflated earnings by as much as $2.5 billion according to U.S. prosecutors, has warned investors not to trust financial reports dating to 1986. The Securities and Exchange Commission claims HealthSouth and former Chief Executive Officer Richard Scrushy manipulated results to meet profit forecasts and boost the company's stock price.

Shares of the Birmingham, Alabama-based company rose 5 cents to 15 cents as of 2:56 p.m. New York time in over the counter trading. They have lost almost all of their value in the past year.
Last Updated: April 29, 2003 15:09 EDT