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In Re: HealthSouth ERISA Litigation
(Civil Action No. CV-03-BE-1700-S,
U.S. District Court, N.D. of Alabama, Southern Division)
On June
27, 2006, the Court held a Fairness Hearing and approved the Settlement
of this case. The following two orders were entered:
Keller
Rohrback L.L.P. is Court-appointed Lead Counsel for the Class in this
case.
The
Allegations
The ERISA
Action claims that the Defendants were fiduciaries of the Plan
and violated fiduciary duties under ERISA that they
owed to the HealthSouth employees and retirees who were participants in
the Plan. In the Complaint, Settlement
Class Representatives have asserted causes of action for the
losses suffered by the Plan as the result of the
alleged breaches of fiduciary duty by the Defendants.
The ERISA
Action alleges that Defendants knew or should have known that
HealthSouth stock was not a prudent investment because HealthSouth was
allegedly engaged in inappropriate business and accounting practices,
including accounting and Medicare fraud, and, thus, knew or should have
known that HealthSouth stock no longer was a prudent investment for
retirement plan assets.
The ERISA
Action also asserts that certain of the Defendants violated
their fiduciary duties by failing to adequately monitor the persons
whom they appointed to serve as Plan fiduciaries,
and ensure that they were faithfully discharging their fiduciary duties
under ERISA.
The
Settlement
On May
11, 2006, the Court entered its order Preliminarily Approving proposed
settlement, approving form and dissemination of class notice, and
setting date for hearing on final approval. Final approval was granted
by the Court on June 28, 2006.
In
settlement of this case, the defendants have agreed to pay $28.85M in
cash to the Settlement Fund. The net amount in the
Settlement Fund, including interest, and
after payment of, and establishment of reserves for, any taxes and Court-approved
costs, fees, and expenses, including any Court-approved compensation to
be paid to the Settlement Class Representatives,
will be paid to the Plan and, after payment of
implementation expenses, the remaining amount will be allocated to the
Plan accounts of members of the Settlement Class
according to a Plan of Allocation to be approved by
the Court.
The Court
has certified that this Settlement shall proceed on
behalf of everyone who, subject to certain exceptions identified below,
fits the following description: (a) all Persons who were participants
in the Plan, at any time
during the period January 1, 1996, through June 3, 2005; and (b) as to
each Person within the scope of subsection (a) of
this paragraph, his, her or its beneficiaries, alternate payees
(including spouses of deceased Persons who were Plan
participants), Representatives and
Successors-In-Interest.
The Court
also has approved a Plan of Allocation by which the Net Settlement
Amount shall be distributed to Class Members. The Plan of Allocation
may be obtained via the link provided above.
You do
not need to submit a claim form or any documentation. For inquiries on
the settlement or to update your address, please e-mail:
HealthSouth@kellerrohrback.com or call 1-800-315-0177.
Please
DO NOT contact the Court or HealthSouth Corporation regarding the
Settlement. If you have any questions please use the email
address or toll free number provided above.
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