Lovell Stewart Halebian LLP Announces Class Action Lawsuit Against HealthSouth Corp., Officers and Directors.

Business Editors/Legal Writers

NEW YORK--(BUSINESS WIRE)--Sept. 24, 2002

The law firm of Lovell Stewart Halebian LLP ([phone] or www.lshllp.com) filed a class action lawsuit on September 24, 2002 on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of HealthSouth Corp. (NYSE:HRC) between January 14, 2002 and August 26, 2002, inclusive.

The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. Any member of the class may move the Court to be named lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than October 28, 2002.

The action, Gerstle v. HealthSouth Corp., et al., is pending in the U.S. District Court for the Northern District of Alabama, Southern Division (1729 Fifth Avenue, North Birmingham, Alabama) and has been assigned to the Hon. William M. Acker, Jr., U.S. District Judge. According to the complaint, defendants made misstatements of material facts and omitted to state material facts in their public statements and elsewhere, including failing to disclose that imminent Centers for Medicare and Medicaid Services ("CMS") directives would cause HealthSouth to lose millions of dollars in revenue and earnings going forward, that HealthSouth's operations would have to be substantially reorganized because of the CMS directives, at great expense to HealthSouth, and that because of the foregoing developments, the defendants' repeated reassurances that HealthSouth's fundamentals were strong and that it would meet its earnings targets for 2002 were lacking in any reasonable basis.

The complaint alleges that after defendants disclosed that HealthSouth's 2002 earnings before interest, taxes, depreciation and amortization would be lower than previously projected by approximately $175 million on August 27, 2002 and discontinued and disavowed the earnings guidance that they had previously given to the market for 2002 and 2003, HealthSouth's share price plummeted by more than 43 percent to close at $6.71.

Christopher Lovell, the senior partner at Lovell Stewart Halebian, has been appointed lead counsel or co-lead counsel in numerous significant class actions, including actions involving reportedly the largest class action recoveries in history under three separate federal statutes (the Sherman Antitrust Act, the Commodity Exchange Act, and the Investment Company Act of 1940). These record-breaking recoveries for class plaintiffs included the $1.027 billion recovery in In re: NASDAQ Market-Makers Antitrust Litigation and a $145.35 million recovery in 1999 in In re: Sumitomo Copper Litigation, a class action against various parties who conspired to manipulate the worldwide copper and copper futures markets for their own profit.

Investors who acquired the common stock of HealthSouth between January 14, 2002 and August 26, 2002 may contact Lovell Stewart Halebian LLP at the telephone number, address or E-mail address below for more information regarding the class action lawsuit. Investors can also visit Lovell Stewart Halebian's website at www.lshllp.com to view a copy of the complaint.

 Lovell Stewart Halebian LLP
 John Halebian
 Christopher J. Gray
 500 Fifth Avenue
 New York, New York 10110
[phone]
 [e-mail]