HealthSouth Settles on Board

According to Grant's complaint, all five also participated in a "web of financial entanglements" that benefited board members -- particularly Scrushy -- at the expense of common shareholders. It accuses HealthSouth directors of "rubber-stamping" a number of related-party deals that were never properly disclosed to the public.

"Scrushy directed where all the company's business would go," the complaint states, "and that business in large part ended up in the laps of Scrushy and his fellow directors."

In the past, HealthSouth's regulatory filings have simply glossed over such transactions as fair to the company. But Grant's complaint raises questions about the deals that run on for pages. Moreover, it claims that the board did not -- and probably could not -- produce evidence to justify the transactions.

"The paucity of documents produced in response to the court order -- all that exist by defendants' tacit admission -- shows that the board never took seriously its fiduciary responsibility," the complaint states.

The complaint then singles out HealthSouth directors individually. Chamberlin is tagged for his ownership stake in MedCenterDirect.com and Source Medical, two companies that have relied heavily on HealthSouth for both financing and business.

Givens is attacked for her ties to MedCenter as well. Her venture capital fund, Acacia, owns stock in MedCenter. Moreover, her fund has attracted millions of dollars in investments from HealthSouth -- and snared at least one valuable business from the company -- during her long tenure on the board. Indeed, the complaint states, Givens' entire career was "jump-started" by her dealings with HealthSouth.

Newhall is accused of similar conflicts. His own investment firm, New Enterprise Associates, also invested in MedCenter and -- together with Given's fund -- bought a HealthSouth subsidiary that has quickly evolved into "one of the nation's largest providers of healthcare recruiting and staffing services."