Crowds expected at yard sale of once rich-and-infamous CEO Scrushy

VESTAVIA HILLS, Ala. (AP) – The big barn and horse stables that were a symbol of Richard Scrushy’s rags-to-riches tale as the chief executive of HealthSouth Corp. will be overrun this weekend by strangers combing through the last of his personal possessions.

The horse buildings on the Vestavia Hills home place will be the site of an open-to-the-public estate sale starting at 9 a.m. Saturday. That’s when thousands of Scrushy’s personal and household items will be sold at what amounts to a huge yard sale.

There are many hundreds of furniture items, racks of designer men’s clothing and curios aplenty, from autographed photos of celebrities to paintings of the former HealthSouth CEO. All will be sold at a simple cash-and-carry sale Saturday and Sunday under 4,000 square feet of former horse space at the Vestavia Hills property off Interstate 459.

“The interest level is high; it is a very high-profile sale,” said John Jones, an estate sales professional handling the event for Philadelphia-based appraisers Freeman’s. “There are some nice furniture reproductions, some nice prints, good rugs and some fine artwork by artists with a strong regional following.”

The sale, taking place where Scrushy once boarded and trained his family’s horses, is part of the ongoing seizure and liquidation of his possessions. The former executive was found liable in 2009 during a Jefferson County Circuit Court civil trial for a massive accounting fraud that almost sent HealthSouth into bankruptcy. He was ordered to pay HealthSouth $2.8 billion in compensation for the damage he was found to have caused.

Since then, lawyers for HealthSouth shareholders have collected about $100 million, mostly from recovering improperly paid bonuses and stock-sale proceeds. Additional amounts have come from selling Scrushy’s fleet of 19 vehicles and a jewelry collection. Now, it comes down to the more mundane. The items for sale over the weekend come from all of Scrushy’s homes, from the Vestavia estate itself, to residences in Florida, on Lake Martin and places in between:

Racks of Scrushy’s business suits, shirts, belts and blazers. Some bear Giorgio Armani labels. Some shirts start at $20, some blazers and coats at $80.
A Rowe reproduction juke box filled with vinyl records, including the 1970s hit “Brandy” by one-hit wonder Looking Glass, and many selections from Credence Clearwater Revival. Sellers are priced at $2,800.
Large, solid wood and leather armoires, some from $1,600 to $4,800.
A 24-place setting of Christian Lacroix china in a Provencal gold scroll pattern for $5,000; such china has sold for $15,000 at full retail price.

John Somerville, a shareholder lawyer supervising the sale, said he can’t predict how much the weekend will raise for HealthSouth. Proceeds from selling Scrushy’s goods are divided among the company, the lawyers who won the civil case, and HealthSouth shareholders.

“Scrushy’s possessions are being sold just as Bernie Madoff’s possessions are being sold,” Somerville said. “And that is to benefit the victims.”

Scrushy, who grew up in modest circumstances in Selma, Ala., and built HealthSouth from scratch, won’t be there for any of it. He is in federal prison in Texas until June 2013 after being convicted of bribing former Gov. Don Siegelman for a seat on the state hospital permitting board. A photo of the two, autographed by Siegelman, is part of the estate sale, going for $500. The picture captures happier times, with both men grinning broadly for the camera.

“To my good friend, Richard Scrushy,” reads the inscription.

Furniture items run into the hundreds, and include a massive, leather-topped solid wood desk from Scrushy’s home office, for $6,500. Every inch of wall space in the salerooms is covered with a painting or a photograph or a poster. Many are of sports stars, such as the autographed one of Bo Jackson in Chicago White Sox garb. Others are everyday prints that could be found on the wall of any house in America.

Still others are more jarring, such as the dark, airbrushed portrait of a tough-looking Scrushy riding a chopper with high handlebars through a darkened landscape. Another depicts him with a rope over his shoulder, hauling a wagon emblazoned “HealthSouth” up a steep hill. “Pulling the wagon together” was the motto at HealthSouth, once Alabama’s largest publicly traded company.

There were fewer people to pull after Scrushy’s fraud indictment in 2003. The company flirted with bankruptcy after federal prosecutors said Scrushy and subordinates reported billions in phony profits while incurring billions in actual losses. Thousands of jobs were cut, and many shareholders lost everything after shares fell more than 90 percent.

Scrushy was found not guilty during a 2005 federal criminal trial in U.S. District Court in Birmingham. Five former chief financial officers said otherwise, testifying after pleading guilty that Scrushy ordered the phony accounting.

He wasn’t so fortunate at the 2009 Jefferson County Circuit Court civil trial, a suit filed by HealthSouth shareholders seeking financial penalties. The judge in the case called Scrushy “the CEO of the fraud.” It emerged during the trial that HealthSouth reported $1.3 billion in fake profits from 1996 through 2002, while the company incurred actual losses of $2.4 billion.

Scrushy earned $226 million during the fraud period, and owned hundreds of millions in real estate, airplanes, boats and personal property, lawyers said in court filings.

Now, not much is left to sell after Scrushy and wife Leslie volunteered last year to hand everything over in return for settling allegations she hid her husband’s assets from HealthSouth. The next assets on the sale schedule are a few fine art pieces Scrushy owned, including those by Picasso and Chagall. They are slated to be sold at an auction May 15 in Philadelphia, also handled by Freeman’s.

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Information from: The Birmingham News,

http://www.al.com/birminghamnews

AP-CS-03-24-11 0855EDT

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