Louisiana Teachers' Retirement System, Baton Rouge, filed suit against HealthSouth Corp., Birmingham, Ala., in Delaware Chancery Court. The lawsuit claims HealthSouth, which is incorporated in Delaware, violated Delaware state law by not holding a shareholder meeting since May 2002; the law requires shareholder meetings at least once every 13 months. It also claims HealthSouth failed to disclose related-party transactions between the firm's directors and companies with which they did business, and the suit is seeking a portion of the profits from those dealings.
Officials at the $10.6 billion plan want a shareholder vote on whether to elect new board members; the current board has not changed despite a federal investigation launched earlier this year into the company's financial dealings. As part of the suit, the system has asserted a claim for damages against holders of HealthSouth stock, said Jay Eisenhofer, partner at the system's outside counsel, Grant & Eisenhofer. The system holds 69,400 shares of HealthSouth stock.
Andy Brimmer, HealthSouth spokesman, said the firm is awaiting the results of an audit by auditor PricewaterhouseCoopers before scheduling an annual meeting.
