Tuesday, June 28, 2005

What Now? 

In what some might call an amazing outcome, Richard Scrushy, former CEO of HealthSouth, was found not guilty on all 38 charges of fraud against him. The company lost a mere $2.7 billion -- chump change (ahem).

HealthSouth took the only PR step it could in light of the verdict. It put lots of daylight between the firm and the man.

"The new board and new management team remain appalled by the multibillion-dollar fraud that took place under Mr. Scrushy's management and the environment under which such fraud could occur," HealthSouth Chairman Bob May said in a statement on Tuesday.
"Under no circumstances will Mr. Scrushy be offered any position within the company by this management team or by this board of directors," May added.

Not only was the verdict an embarrassment for the prosecutors, it is a potential embarrassment for current company management. There is nothing to prevent Scrushy from commenting on their efforts to bring him down. Only civil suits remain, and there is a good chance that Scrushy will pay much of his net worth to the government and wronged shareholders. But, he has verdicts to support his contentions that he didn't know what happened, and he appears to be an adept player in the PR game. He may slip through yet while other former CEOs learn about jail.


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