Sunrise Senior Living (NYSE: SRZ), the company planning to build an assisted living facility in Shorewood, made news yesterday. The company fired their president and several senior executives following an internal investigation of accounting procedures and insider trading. Sunrise is planning to build on the riverfront site, which currently contains the Riverbrook Restaurant, and apartment buildings.
Sunrise executives leave after investigation
Thu Dec 20, 2007 2:06pm EST
CHICAGO, Dec 20 (Reuters) - Sunrise Senior Living Inc
(SRZ.N: Quote, Profile, Research), the subject of a government probe into insider stock
sales and accounting practices, said on Thursday its president
and two other executives had left the company after the
conclusion of the fact-finding portion of an investigation by a
special independent committee.
Shares of Sunrise, the biggest U.S. owner of
assisted-living facilities, jumped as much as 14.5 percent on
the news.
The company announced the departures of Thomas Newell,
president since April 2000; Larry Hulse, chief executive of its
insurance captive since August 2005 and a former chief
financial officer; and Carl Adams, treasurer since November
2005 and a former chief accounting officer.
Sunrise, which is restating its earnings for 2003 to 2005,
also said the net effect of adjustments arising from its
findings was not likely to increase the previously disclosed
restatement impacts.
This portion of the investigation primarily related to
certain accruals and reserves. The committee's review of these
issues found that inappropriate accounting occurred during the
third quarter of 2003 through the fourth quarter of 2005.
The company said the committee will now consider
appropriate measures pertaining to internal controls and
processes over financial reporting. The panel will report to
the board of directors and recommend improvements to processes
and procedures.
SEIU Master Trust, a Sunrise shareholder, has been urging
the Sunrise board of directors to delegate oversight of its
internal investigation to the two new independent directors.
"Five of those seven independent directors served on the
board during the period under investigation and four of those
five appear to have been involved in some of the activities
under investigation, including stock option grants, insider
sales, and the company's accounting practices," SEIU said in a
prepared statement. (Read full Story)
