Welcome to the HealthSouth E&Y/UBS Bondholder Settlements website.

The following is a summary of information which is presented in more detail in the Notice of (I) Pendency of Class Action; (II) Proposed Settlements with Ernst & Young LLP and the UBS Defendants; and (III) Proposed Dismissal of Claims (the “Notice”), which you can access by clicking on the link with that name to the left. Since this is just a summary, you should read the full Notice for additional details. The Notice describes rights you may have in connection with the action and with respect to these settlements.

Please read this information carefully. If you are a Bondholder Class Member (as defined below), your rights will be affected by these proceedings and you may be eligible to receive benefits under a $33,500,000 class action settlement with Ernst & Young LLP (“E&Y”) and/or a $100,000,000 class action settlement with the UBS Defendants. The Bondholder Class consists of:

Securities Brokers and other Nominees: Please see instructions on page 15 of the Notice.

PLEASE NOTE: Not all members of the Bondholder Class are members of the E&Y Bondholder Class or the UBS Bondholder Class which are subsets of the Bondholder Class.

• The E&Y Bondholder Class includes only those Bondholder Class Members who purchased HealthSouth bonds, notes or other debt instruments beginning March 30, 2000 through and including March 18, 2003. E&Y Bondholder Class Members are eligible to share in the proceeds of the proposed $33,500,000 settlement with Ernst & Young LLP.
• The UBS Bondholder Class includes only those Bondholder Class Members who purchased HealthSouth bonds, notes or other debt instruments beginning September 20, 2000 through and including March 18, 2003. UBS Bondholder Class Members are eligible to share in the proceeds of the proposed $100,000,000 settlement with the UBS Defendants.

• IF YOU ALREADY SUBMITTED A PROOF OF CLAIM IN THE PREVIOUSLY ANNOUNCED HEALTHSOUTH SETTLEMENT YOU DO NOT NEED TO SUBMIT ANOTHER PROOF OF CLAIM. THAT CLAIM FORM WILL BE EVALUATED TO SEE IF YOU ARE ELIGIBLE TO PARTICIPATE IN EITHER OR BOTH OF THESE SETTLEMENTS. PLEASE SEE THE INFORMATION BELOW AND IN SECTION XI. “PARTICIPATION IN THE SETTLEMENTS” AT PAGE 13 OF THE NOTICE FOR DETAILS.

The Court’s Settlement Hearing

The Notice was sent pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Northern District of Alabama, Southern Division (the “court”). The purpose of the notice is to inform potential class members of, among other things, the proposed settlements reached in the Bondholder Action with E&Y and the UBS Defendants, as set forth in the respective stipulations of settlement, and of the hearing to be held by the court to consider the fairness, reasonableness and adequacy of the settlements.

The Court will hold a Settlement Hearing at 10:00 a.m. on July 22, 2010, before the Honorable Karon Owen Bowdre, United States District Judge at United States Courthouse, Northern District of Alabama, Southern Division, Hugo L. Black United States Courthouse, 1729 Fifth Avenue North, Birmingham, Alabama 34203-2000 to determine: (a) whether the E&Y Settlement consisting of $33,500,000 in cash should be approved as fair, reasonable and adequate and the proposed E&Y Judgment entered; (b) whether the UBS Settlement consisting of $100,000,000 in cash should be approved as fair, reasonable and adequate and the proposed UBS Judgment entered; (c) whether Bondholder Plaintiffs’ Lead Counsel’s request for an award of attorneys’ fees and reimbursement of litigation expenses (which may include Bondholder Plaintiffs’ costs and expenses) should be approved by the court; and (d) whether the claims against Richard Scrushy should be dismissed without prejudice if the two proposed Settlements are approved and become Final. The Court may adjourn or continue the Settlement Hearing without further notice to the class.

What is this case about?

The Complaint alleges that during the relevant period, at the direction of senior HealthSouth management, Defendants implemented a scheme to falsify HealthSouth’s financial statements in order to meet or exceed Wall Street expectations and to issue HealthSouth Bonds to finance that alleged fraudulent scheme. E&Y is alleged to have issued false and misleading audit reports on HealthSouth’s financial statements during the E&Y Class Period. The UBS Defendants are alleged to have fraudulently disseminated false and misleading information regarding HealthSouth to the Bondholder Class and to the market generally through a series of Rule 144A bond offerings between 2000 and 2002.

E&Y and the UBS Defendants (the “Settling Defendants”) have expressly denied and continue to deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Bondholder Action.

Terms of the Settlements

The E&Y Settlement: E&Y has paid, or caused to be paid, cash in the amount of $33,500,000 into an escrow account, which is earning interest, for the benefit of the E&Y Bondholder Class, pursuant to the terms of the E&Y Stipulation. In exchange for such payment, the E&Y Released Claims will be released, discharged and dismissed with prejudice as against each of the E&Y Released Persons.

The UBS Settlement: UBS has paid, or caused to be paid, cash in the amount of $100,000,000 into an escrow account, which is earning interest for the benefit of the UBS Bondholder Class, pursuant to the terms of the UBS Stipulation. In exchange for such payment, the UBS Released Claims will be released, discharged and dismissed with prejudice as against each of the UBS Released Persons.

The Settlements do not release any claims against the Non-Settling Defendant(s) as defined in the respective Stipulations or any claims of Bondholder Class Members who are not members of the E&Y or UBS Bondholder Classes, or any claims of the Stockholder Class, the Stockholder Settlement Class, the Derivative Plaintiffs and/or HealthSouth Corporation. The Settlements do not change or modify any of the terms of the HealthSouth Settlement, nor does either proposed Settlement change or modify any of the terms of the other proposed Settlement.

A portion of the Settlement Funds will be used for certain administrative expenses, including the costs of printing and mailing the Notice, the cost of publishing notice, payment of any taxes assessed against the Settlement Funds and costs associated with the processing of claims submitted. In addition, a portion of the Settlement Funds may be awarded by the court to Bondholder Plaintiffs’ Counsel as attorneys’ fees and to reimburse them for their litigation expenses (which may include the costs and expenses of Bondholder Plaintiffs). The balance of the Settlement Funds (the “Net Settlement Funds”) will be distributed to Authorized Claimants according to the Plan of Allocation described in Section X at page 11 to 12 of the Notice.

The Rights of Class Members

If you are a Bondholder Class Member, you have the following options:

• If you are a member of the E&Y Bondholder Class you are eligible to participate in the E&Y Settlement. If you are a member of the UBS Bondholder Class you are eligible to participate in the UBS Settlement. If you have NOT previously submitted a Proof of Claim in connection with the HealthSouth Settlement, you may now file one with respect to these Settlements. If you are a member of either or both of these class and submit a Proof of Claim, you will be eligible to share in the proceeds of the applicable proposed Settlement(s), if your claim is timely and valid and if the proposed Settlement(s) are finally approved by the court, and you will be bound by the applicable Judgment(s) and release(s) as described in the notice. If you are a member of the E&Y and/or the UBS Bondholder Class and you previously submitted a Proof of Claim in connection with the HealthSouth Settlement, your claim will be evaluated with respect to these Settlements and if it is valid with respect to the applicable Settlement(s), you will share in the proceeds of the applicable proposed Settlement(s) if the Settlement(s) are finally approved by the court. All new claim submissions must be postmarked no later than September 29, 2010.
  
  
• If you DO NOT wish to be included in the Bondholder Class (which means that you DO NOT wish to participate in the proposed Settlements with E&Y and UBS or in any recovery that might be obtained pursuant to the outstanding judgment against Scrushy), you must request to be excluded. You must request exclusion from the Bondholder Class even if you previously excluded yourself from the HealthSouth Settlement. To do so, you must submit a written Request for Exclusion that must be received no later than July 7, 2010. You must set forth: (a) your name, address, and telephone number; (b) the number and type of HealthSouth Bonds purchased or otherwise acquired and the number sold, exchanged or otherwise disposed of during the period beginning July 30, 1999 through and including March 18, 2003, the dates of such purchase(s) or acquisition(s) and/or sales(s), exchange(s) or other disposition(s) and the price paid or received or consideration given or received for each such purchase or acquisition or sale, exchange or other disposition; and (c) that you wish to be excluded from the Bondholder Class. The exclusion request must be addressed as follows: HealthSouth Corporation Securities Litigation; E&Y/UBS Bondholder Settlements c/o Rust Consulting, Inc. P.O. Box 2332, Faribault, MN 55021-9032.
  
  NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST. If the court concludes that you timely and validly requested exclusion from the Bondholder Class: (a) you will be excluded from that class which means that you will be excluded from the E&Y and UBS Bondholder Classes and, thus, will not be eligible to share in the proceeds of the Settlements described in the Notice, nor will you be eligible to share in any recovery that might be obtained as a result of execution of the outstanding judgment against Richard Scrushy; (b) you will not be bound by any judgment that will be entered in the Bondholder Action (including any judgment entered pursuant to the Settlements described in the Notice); and (c) you will not be precluded from otherwise prosecuting an individual claim, if timely, against the Settling Defendants based on the matters complained of in the Bondholder Action. Unless you excluded yourself from the Settlement Class certified for purposes of the HealthSouth Settlement, you will be bound by the terms of the Judgment entered in connection with that settlement, even if you now elect to exclude yourself from the Bondholder Class.
  
  If you do not request in writing to be excluded from the Bondholder Class as set forth above, you will be bound by any and all applicable determinations or judgments in the Bondholder Action, whether favorable or unfavorable; you will not be able to bring, or continue to pursue, an individual claim against the Settling Defendants or Scrushy, if the Bondholder Action continues against him, based on the matters complained of in the litigation. You shall be deemed to have, and by operation of the applicable Judgment(s) that may be entered with respect to the proposed Settlement(s) shall have, fully released all of the Released Claims against the E&Y and/or UBS Released Persons, as applicable, whether or not you submit a valid Proof of Claim.

• If you are a member of the E&Y or UBS Bondholder Class, you may write to the court and explain why you do not like the proposed Settlement with E&Y or the UBS Defendants, as applicable, or why you do not like the request for attorneys’ fees and reimbursement of expenses. If you are a Bondholder Class Member, you may write to the court and explain why you do not like the proposed dismissal of claims against Scrushy. You cannot object to either Settlement, the request for attorneys’ fees and reimbursement of expenses, or the proposed dismissal of claims against Scrushy, if you exclude yourself from the Bondholder Class. Objections must be mailed or hand-delivered so that they are received on or before July 7, 2010 by Lead Counsel for the Class and counsel for E&Y and/or UBS Defendants as applicable and filed with the court by that date as explained in Section XV of the Notice and they must include all of the information set forth therein. If your objection is rejected by the court, you will be bound by the applicable Settlement(s) and Judgment(s) just as if you had not objected.
  
  
• If you wish to attend the Settlement Hearing in person and speak to the court, you must ask the court for permission. To do so, you must submit a written statement noting your intention to appear at the Settlement Hearing so that it is received on or before July 7, 2010 by the Clerk of the Court, Bondholder Lead Counsel and Counsel for the applicable Defendants as noted in Section XV of the Notice.
  
  
• You may do nothing at all. If you choose this option, you will not share in the proceeds of the Settlements (unless you are a member of the E&Y and/or UBS Bondholder Class and you previously filed a Proof of Claim in the HealthSouth Settlement), but you will be bound by any judgment entered by the court in connection with the Settlement(s) applicable to your settlement class, and you shall be deemed to have, and by operation of the applicable Judgment(s) shall have, fully released all of the Released Claims against the Released Persons covered by the relevant Judgment(s).
  
  
• If you are a Bondholder Class Member, you may, if you want, but are not required to, enter an appearance through counsel of your own choosing at your own expense. If you do not do so, you will be represented by Bondholder Plaintiffs’ Lead Counsel: Bernstein Litowitz Berger & Grossmann LLP and Cunningham Bounds LLC. You will not be charged personally for the services of Bondholder Plaintiffs’ Lead Counsel.

Further Information

Further information regarding the Bondholder Action, the Notice and how to file your claim may be obtained by contacting the Claims Administrator or reading through the Notice and Proof of Claim available through the links on the left side of this page. You may also contact Lead Counsel for Bondholder Lead Plaintiffs and for the E&Y Bondholder Class and the UBS Bondholder Class.