Judge gives more time in HealthSouth creditor case 3/31/2004 6:52:12 PM
BIRMINGHAM, Ala., March 31 (Reuters) - An Alabama judge on Wednesday gave HealthSouth Corp. (HLSH) more time with its creditors to resolve a request for an immediate repayment of bonds.
Judge Allwin Horn III of the Jefferson County Circuit Court wants lawyers for the company, which is coping with an accounting scandal, and an unofficial creditors committee to bring their plans to him by April 7 and he would have a decision by April 14.
On Tuesday, he extended a restraining order that prohibited the immediate collection of the debt by 10 days.
David Hilty, of investment firm Houlihan Lokey Howard & Zukin who is on the unofficial committee of senior bond holders, told the court he is hoping that a resolution can be negotiated between HealthSouth and creditors.
Hilty said he would not recommend accelerated collection of the debt, but the committee should protect its right to do so.
HealthSouth is in default on its bonds after an accounting scandal left the company unable to provide audited financial results.
The group is seeking a higher consent payment for a waiver to the default than what HealthSouth is currently offering, Hilty said.
Also, the group does not want other bondholders that have lesser claims to HealthSouth's assets to be treated preferentially, Hilty said.
HealthSouth, a provider of physical therapy, diagnostic imaging and outpatient surgery, is offering a $10 payment per $1,000 in principal to obtain waivers to the portion of the bond agreements that require audited financial statements. HealthSouth has been paying interest on its bonds.
Several former HealthSouth officials have pleaded guilty to fraud charges for their role in the accounting fraud. Former Chief Executive Richard Scrushy has denied charges he orchestrated a plan to overstate the company's profits.
© Reuters 2004. |
