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Frequently Asked Questions and
Answers The SEC and Class Actions Settlements with HealthSouth Questions about Eligibility for Cash Payments and Other Benefits
Questions about the Claim Form
After You Submit Your Claim Form
Effect of Submitting a Claim Your Legal Representation
Questions about Payment
Getting More Information
The SEC and Class Actions Settlements with HealthSouth
1. What are the details of the HealthSouth Securities Settlement Funds? The HealthSouth Securities Settlement Funds were created by the
settlement of separate cases against HealthSouth Corporation brought by the
U.S. Securities and Exchange Commission (SEC) and plaintiffs in class actions
in U.S. District Court. The lawsuits claim that HealthSouth and others provided
investors with false and misleading financial information that artificially
inflated the value of HealthSouth securities.
Eligibility for Cash Payments and Other Benefits
2. Who is eligible to receive a payment? Investors who sustained net losses on purchases and other
acquisitions of HealthSouth securities during the periods covered by the
settlements, and who filed valid claims by the deadline are eligible to receive
a payment. You must have sustained losses on your investments to qualify for a
payment.
3. What is the process to apply for a payment from the Settlement Funds? You must have completed a proof of claim form to be eligible for
a payment. However, the deadline for submitting a claim was February 28, 2008.
Late claims were processed through February 1, 2010. In accordance with Court
Orders, claims filed after February 1, 2010 will not be accepted for any
reason.
4. Must I have suffered some type of loss on my investment(s) to receive settlement benefits? Yes. Payments will be based upon losses on HealthSouth securities investments. Your losses on HealthSouth securities transactions will figure into your eligibility for settlement benefits as follows:
No payments will be made on claims under $10 after aggregation across claims for the purpose of meeting the floor of $10. To obtain more detailed information on the Plans of Allocation, please click here. 5. Can I receive benefits from the SEC settlement as well as the Stockholder and Bondholder class actions? Yes, if you submitted a valid, timely Claim Form and provided copies of any required supporting documentation, you will receive benefits from all the settlements for which you qualify, unless you excluded yourself from the class actions settlement. If you submitted a valid, timely exclusion form for the class actions settlement, you are only eligible to participate in the SEC settlement. Either way, only one Claim Form is required to apply for a payment from the HealthSouth Securities Settlement Funds. 6. I inherited (or received as a gift) HealthSouth securities. Am I eligible? Yes. If you obtained HealthSouth securities that were originally purchased or otherwise acquired during the qualifying period by someone else, and you have the authority to act on behalf of these securities, you may qualify for a claim. As outlined in Question #2 ("Who is eligible to receive a payment?") above, qualifying securities are HealthSouth common stock, bonds, and options. 7. How will the payments in the class actions settlement be allocated? Counsel for the Stockholder and Bondholder Classes in the class
actions have proposed a Plan of Allocation that was approved by the Court
overseeing the class actions. That Plan provides that a portion of the
Settlement Fund (less Court-awarded attorneys' fees and costs) will be
allocated to the Bondholder Class by multiplying the fund by a percentage equal
to: (a) the total dollar value of all eligible Bondholder Class claims divided
by the total dollar value of all eligible Bondholder and Stockholder Class
claims, plus (b) 500 basis points.
8. How will the money from the SEC settlement be allocated? The Court has approved a Plan of Allocation for the $100 million to eligible investors in the SEC settlement. If you are eligible, the amount of your payment will be calculated through a formula that applies a baseline compensation amount to each HealthSouth stock or bond you purchased between August 14, 1996 and March 18, 2003 that you still held on September 29, 1998, August 26, 2002 and/or March 18, 2003. The baseline compensation amounts vary, depending on when you purchased and sold or held the securities. You can click here to review the baseline compensation calculations by reading the SEC settlement Plan of Allocation and Clarifications. 9. I received a determination that my claim is ineligible for payment. If I disagree with my determination, what can I do?Both the SEC case and the consolidated class actions provide for a review of the determination with respect to your claim. If you believe there was an error in determining your claim's eligibility, please submit your written request for review, including any documentation to support your request, to the Claims Administrator. The address is:
Questions About the Claim Form
10. When was the deadline to submit the Claim Form? The deadline for submitting a claim was February 28, 2008. Late claims were processed through February 1, 2010. In accordance with Court Orders, claims filed after February 1, 2010 will not be accepted for any reason. 11. What was required in addition to the Claim Form? Pre-printed Claim Forms did not require documentation, unless
you changed information printed on the form.
Each document should have been clearly identified with your name
and the account number it pertained to.
12. Did all co-owners need to sign the form? Yes. All co-owners or their legal representatives should have
signed the Claim Form.
HealthSouth Securities Settlement 13. Will the information I submitted be kept confidential? Yes. Claim Forms and supporting documentation will be used only to process claims. 14. Why did the Claim Form ask for my email address? The Claims Administrator may need to contact you for further information in order to process your claim. Providing your email address allows the Claims Administrator to contact you promptly and to process your claim and payment more quickly. 15. I purchased or acquired HealthSouth securities, but they were held in my broker's name. Who should complete the Claim Form? You should. The beneficial owner of the securities should complete the Claim Form. If you purchased the securities but they were registered in your broker's name, you are the beneficial owner.
After You Submit Your Claim Form
16. Will I be notified if my Claim Form is rejected? If your claim is ineligible to receive a payment, you will be notified in writing. An explanation will be provided and you will be allowed to request that your claim be reconsidered. 17. What if my address changes after I submitted my Claim Form? Be sure the Claims Administrator has your current contact information, including your current address, to ensure that you receive any payment to which you are entitled. Update your address by calling 1-888-952-9108, or by writing to: HealthSouth Securities Settlement 18. What do I need to do to request a review of the determination that my claim is ineligible for payment? You have 20 days from the date on the letter you received
to submit a detailed written statement of the basis of your challenge of the
Claims Administrator's determination.
Effect of Submitting a Claim
19. Did I give up any legal rights by submitting a Claim Form? No. The deadline to exclude yourself from the Stockholder and
Bondholder class actions has already passed; unless you already excluded
yourself, you will be bound by the terms of the class actions settlement
regardless of whether you filed a claim or not. If you did exclude yourself,
then you were ineligible to file a claim for the class actions settlement, but
you were still eligible to file a claim from the SEC Settlement by filling out
and submitting a Claim Form before the deadline.
20. What if I did not submit a Claim Form? Your participation in the HealthSouth Settlement is voluntary. You will still be bound by the terms of the class actions settlement, including the release of claims against HealthSouth, if you did not previously exclude yourself. Your Legal Representation
21. Do I have a lawyer in the HealthSouth Settlements? The Court has appointed attorneys to represent the Stockholder and Bondholder Classes ("Lead Plaintiffs' Counsel"); lawyers for the SEC represent the government and the public in the SEC Settlement. You do not have to pay anything for representation in either case. Effect of Submitting a Claim
22. How will the attorneys be paid? Attorneys in the class actions settlement, both for the
Stockholder Class and the Bondholder Class, have been working on these claims
since as early as 1998 (in the stockholder lawsuit). When the Court held its
hearing on February 7, 2008 to approve the Plan of Allocation for the class
actions, the attorneys requested and were awarded fees and reimbursement of
expenses, to be paid out of the class actions settlement fund.
23. When and where was the hearing held? The hearing on the proposed Plan of Allocation and attorneys' fees in the class actions was held on February 7, 2008, at 1:30 p.m., at: 140 Hugo L. Black United States Courthouse 24. What if I disagreed with the proposed Plan of Allocation or the request for attorneys' fees in the class actions? The deadline to file an objection was December 15, 2007. The Court considered the filed objections at the hearing on February 7, 2008. 25. How do I object to the Plans of Allocation or the request for attorneys' fees? The deadline to file an objection was December 15, 2007. Questions About Payment
26. When will I receive my payment? The Court overseeing the HealthSouth Securities Settlement distributions has given approval to distribute checks to valid claims eligible for payment. Checks began mailing on July 23, 2010. 27. Will I have to pay taxes on my payment? Individual Circumstances will vary and we cannot provide tax advice. The payment amount may be subject to federal and/or state taxes. Please consult your tax advisor regarding the tax implications of this payment. 28. Will I receive a 1099 form? 1099 forms will not be mailed for the payments from the HealthSouth Securities Settlements. 29. Why did I receive two checks? You received two checks because you submitted a valid claim that was eligible for payment from both the SEC settlement fund and the consolidated class actions settlement fund. Separate funds were set up for the SEC case and the consolidated class actions in accordance with Court Orders. 30. How long do I have to cash my check(s)? Checks must be cashed promptly. Checks will become void 120 days after the date on the check. 31. Why are the amounts different on the two checks I received? The Plans of Allocation for each of the settlements approved by the Court differ somewhat in terms of the loss calculations, and, therefore, can result in different payment amounts. The Plans of Allocation are available for review on this website. 32. How can I have my check(s) reissued in the correct name? If you would like your check(s) reissued, please return the check(s) along with the appropriate documentation to support the name change to the following address: HealthSouth Securities Settlement
Examples of acceptable documentation of names changes include: death
certificate, marriage license, divorce decree, or documentation to support a
change to the name of the beneficial owner of the account the Proof of Claim
was filed for. If you have a question about documentation please contact the
Claims Administrator by calling toll-free, 1-888-952-9108, or you may send an
email with your question to mail@HLSSettlement.com.
33. I received a payment but wish to ascertain whether it is accurate, what can I do? The Plans of Allocation provide information about the payment calculation
formulas. Payment amounts were calculated based on the Plans of Allocation
approved by the Court. You may review these documents on this website by
clicking on the link to Plans of Allocation.
34. What if I have a question about my payment(s)? If you have a question about your payment in the SEC case, you may call the
Claims Administrator toll-free at 1-888-952-9108, and a call center
representative will be happy to assist you. Call center hours are Monday
through Friday, from 9:00 AM to 6:00 PM Eastern time, or you may send an email
with your question to mail@HLSSettlement.com
35. What if I disagree with the amount of my payment(s)? Please note that many disagreements can be resolved by asking a question.
36. What was the pro rata factor used to calculate my SEC payment? SEC Payments were calculated at approximately 2.42% of eligible loss amounts for Stock and/or Bonds and approximately 19.08% for Options. 37. What was the pro rata factor used to calculate my consolidated class actions payment? Consolidated class action Payments were calculated at approximately 7.3% of eligible loss amounts for the Bondholder class, 4.7% for the Stockholder class (includes options) and approximately 24.6% for the Merger Class. Please note the check you received represents your pro-rata share of the initial cash distribution which is 80% of the total distribution. 38. I have not received my payment. What should I do? Payments to valid claims eligible for payment began mailing on July 23, 2010. Be sure the Claims Administrator has your current contact information, including your current address, to ensure that you receive any payment to which you are entitled. If you have moved, you may update your address by calling 1-888-952-9108, or by writing to: HealthSouth Securities Settlement If you have not received your payment by August 6, 2010 please contact the Claims Administrator at the toll free number above. 39. I was told my claim was not being paid because the calculated payment was less than $10. Why was my claim not paid? In accordance with the Plans of allocation, which were approved by the Court; distribution amounts calculated at less than $10.00 will not be paid. Getting More Information
40. I still have questions. Whom may I contact? If you have additional questions, you may:
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