Steven Mackay Staff

Donald Watkins, the main attorney behind the defense of embattled HealthSouth Corp.'s fired CEO Richard Scrushy, apparently is organizing an effort to buy the health-care provider.

Reports from Bloomberg News say that Watkins, along with other investors, is making a bid to buy HealthSouth, the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative health-care services.

Scrushy would hold an advisor-only relationship to HealthSouth if the apparent bid is successful, according to a report by Dow Jones Business Wire. Bloomberg reported Scrushy would not have an ownership stake in the company.

However, HealthSouth believes if there is anything to the reported acquisition attempt, it would be to restore a controlling position for Scrushy in the company he founded in 1984 with four other investors.

"I can't imagine any circumstances in which Richard Scrushy would be permitted to acquire control of this company," says a HealthSouth spokesman. "We have not received any contact on this matter from Richard Scrushy or his representatives."

[...] In debt by some $3.3 billion, the company is trying to stave off bankruptcy. It already has defaulted on a $1.25 billion credit facility, but says lenders are unlikely to sue. A HealthSouth spokesman says the company's finances are still being reviewed by auditor PricewaterhouseCoopers and turnaround firm New York-based Alvarez & Marsal Inc. The results are due in late June.

In recent months, Watkins has made headlines himself in bids to purchase a Major Baseball League team.