HealthSouth Director Quits Panel
%mlink(STRY:; PHOTO:; AUDIO:%)
BIRMINGHAM, Ala. (AP) _ A HealthSouth Corp. director who won a major contract from the company has resigned from a board committee investigating shareholder lawsuits that followed a collapse in stock prices.
Larry Striplin, a longtime friend of HealthSouth founder Richard Scrushy, said he had also quit as chairman of HealthSouth’s compensation committee, which sets Scrushy’s salary.
Striplin’s Nelson-Brantley Glass Contractors won a $5 million contract to install glass at a hospital being constructed in Birmingham by HealthSouth, which is based in the city.
Striplin defended the glass contract, saying his company earned the work. ``We worked very hard to get the contract and we were the low bidder,″ he said Monday.
But there was so much bad publicity after details of the glass contract emerged ``it wasn’t worth it for me to continue and have negative perceptions associated with it,″ Striplin said.
As a member of a newly formed litigation committee, Striplin was assigned to examine the numerous shareholder lawsuits that were filed after the company’s stock fell 47 percent in August on the news Medicare cuts would reduce profits by $175 million.
The Securities and Exchange Commission is investigating whether HealthSouth knew about the problems earlier. It also is reviewing $100 million in stock sales in May and July by Scrushy.
Striplin said board member Robert May will join the litigation committee and replace him as head of the compensation committee.
Shares of HealthSouth rose 15 cents to $3.95 in morning trading Monday. The company’s stock price has fallen 74 percent in the past year.