Scrushy Denies Role In HealthSouth Fraud

"That's a real good question," Scrushy answered.

Scrushy still looked like a high-powered executive in a dark business suit and tie. But his leg shackles jingled when he walked into court. He spent lunch in a holding cell rather than the fast-food restaurant where his legal team dined.

Scrushy was questioned first by Parkman, who represented him in the federal criminal trial that ended in his acquittal on criminal charges in 2005. Shareholder attorneys will cross-examine him as early as Thursday after Parkman finishes his questions.

Plaintiff's attorneys are making the same basic claim that prosecutors used unsuccessfully four years ago: That HealthSouth vastly inflated assets and revenues at Scrushy's direction when the company failed to meet Wall Street earnings estimates.

While jurors found him innocent in the criminal fraud case, Scrushy was convicted of bribery in 2006 and is serving nearly seven years in prison.

The shareholder suit was filed in state court, but Scrushy was questioned at the federal courthouse partly because of increased security. Circuit Judge Allwin E. Horn is hearing the case without a jury.