BIRMINGHAM, AL—Healthcare services provider HealthSouth, embroiled in crisis after nine executives pleaded guilty to criminal charges for their roles in an alleged $2.5 billion fraud, has turned to crisis management specialist Joele Frank, Wilkinson Brimmer Katcher for public relations support. Partner Andrew Brimmer is managing the firm’s efforts and has temporarily relocated to HealthSouth headquarters in Birmingham.
In the early days of the crisis, HealthSouth had worked with Euro RSCG Life NRP president Susan Noonan. Euro RSCG Life NRP—the former Noonan Russo—has considerable healthcare experience and some crisis credentials, but as the company’s troubles mounted it apparently felt it needed a PR partner that specialized in volatile issues.
Last year, for example, Joele Frank worked for the William R. Hewlett Trust, led by the dissident shareholder opposed to the merger of HP and Compaq Computer, with TRW in connection with its announced merger with Northrop Grumman; and on restatements and accounting issues for clients including CMS and NVIDIA.
Federal prosecutors have alleged that HealthSouth executives created fictitious financial statements in an effort to deceive Wall Street about the company’s true financial condition.
Former chief executive Richard Scrushy, who has not been charged with any crime, denies any role in the fraud. “Mr. Scrushy enjoyed a good reputation before the SEC got involved. We hope to show he continues to be a man of integrity who built this company in Birmingham and he’s entitled to his money,” said Scrushy attorney Donald Watkins this week.