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CLASS ACTIONS HealthSouth to pay out $445M in fraud suits BIRMINGHAM, ALA. (AP)-A final $445 million settlement between HealthSouth Corp. and investors was announced last week to end class actions stemming from fraud at the health services company. Under the agreement, which goes to a judge for approval, the Birmingham-based company will pay $215 million in cash, stocks and warrants. Insurance companies will pay the remaining $230 million. “This settlement represents another significant milestone in HealthSouth’s recovery and is a powerful symbol of the progress we have made as a company,” chief executive Jay Grinney said. A preliminary settlement was reached in February. Fifteen former HealthSouth executives pleaded guilty in what prosecutors described as a $2.7 billion fraud, and jurors convicted a 16th. Fired CEO Richard Scrushy was acquitted in the fraud, but he was subsequently convicted in a government bribery scheme linked to his years at HealthSouth. CRIMINAL LAW Acquittal won in perjury case related to Pellicano LOS ANGELES (AP)-A former phone company employee was acquitted last week on four perjury charges related to the wiretapping case against Hollywood private eye Anthony Pellicano, and the jury deadlocked on the fifth count. Joann Wiggan, 52, was one of three SBC Communications employees who were alleged to have supplied a former co-worker with information from confidential databases. She was accused of lying to a grand jury about her activities. Wiggan’s attorney, David Reed, described his client as a “soccer mom who’s never been in trouble.” He said the verdict “is akin to David beating Goliath.” The government claimed that Wiggan helped Ray Turner, a retired SBC employee, with information that aided Pellicano’s alleged criminal enterprise. Wiggan, who pleaded not guilty and testified in her own defense, said whatever calls she made to or received from Turner had nothing to do with accessing private phone records for Pellicano. ENVIRONMENTAL LAW Federal Mogul reaches $24M asbestos pact WASHINGTON (DOW JONES/AP)-Federal Mogul Corp. has reached a settlement with Ohio that resolves nearly $24 million in environmental-damage claims that the state had been pursuing against the bankrupt auto-parts company. In papers filed with the U.S. bankruptcy court in Delaware, Federal Mogul said Ohio agreed to reduce its claims against the company to $2.3 million and up to 50% of any insurance proceeds Federal Mogul obtains related to asbestos damage at its former factory in McConnelsville, Ohio. The pact resolves all debts owed by Federal Mogul’s U.S. subsidiaries to the state, the company said. The agreement is subject to approval by U.S. Bankruptcy Judge Judith Fitzgerald, who will consider it at a hearing set for Oct. 30. Oil company to pay $330M for Katrina spill NEW ORLEANS (AP)-Murphy Oil Corp. has agreed to a $330 million settlement in a lawsuit over an oil spill that contaminated thousands of homes last year during Hurricane Katrina, a spokesman for the plaintiffs said. A federal judge still must sign off on the deal. A trial in the case was slated to begin next week in New Orleans. Murphy, based in El Dorado, Ark., said in a statement it had reached an agreement with the plaintiffs’ attorneys over the spill from an oil storage tank at its Meraux, La., refinery, in St. Bernard Parish near New Orleans. One million gallons of oil coursed into canals and homes after a storm surge moved the tank off its base. The proposed settlement includes $80 million paid so far to settle roughly 2,700 household and business claims, said Sidney Torres, the court-appointed liaison for the committee. The class consists of a total of about 6,200 claims, he said. Another $160 million would go toward property buyouts and paying property owners, while the remaining $90 million would be for cleanup, Torres said. The latter figure could rise if more cleanup work is needed, he said. PRODUCTS LIABILITY Merck wins Vioxx drug case in New Orleans NEW ORLEANS (AP)-A federal jury ruled in favor of Merck & Co. last week in a suit over the painkiller Vioxx, finding that there was not enough evidence to link the drug to a Kentucky man’s heart attack. The jury, made up of six women and two men, deliberated for only about three hours before reaching a verdict. The jurors left the courthouse without commenting on their decision. Robert Garry Smith, 56, claimed in court that the drug contributed to a heart attack he had 3 1/2 years ago. He said he had taken Vioxx for knee pain for about 4 1/2 months but didn’t realize at the time of the heart attack that Vioxx may have been a cause for concern. But a lawyer representing Merck argued there was no medical testimony indicating Vioxx had anything to do with the heart attack that Smith suffered in 2003. “That doesn’t exist in this case,” attorney Phil Beck of Chicago’s Bartlit Beck Herman Palenchar & Scott said in closing arguments. Merck pulled Vioxx from the market two years ago after a study found a greater risk of heart attack in those who had taken the drug for at least 18 months than in those who had taken placebos.

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