Sunrise Suspends CFO Over Missing Records

Sunrise Senior Living said yesterday that it suspended chief financial officer Bradley B. Rush with pay for allegedly destroying records the company told executives to preserve for an investigation of stock sales by insiders.

"The Board concluded that actions taken by Mr. Rush were not consistent with the document retention directives issued by the Company," the McLean firm said in a news release.

"We believe that some records were destroyed," Sunrise spokeswoman Lisa Mayr said in an interview.

Rush could not be reached at phone numbers listed under that name. Mayr said Sunrise would convey The Post's request for comment to an attorney for Rush, but the newspaper did not receive a response.

Sunrise convened a committee of board members in December to investigate a labor union's allegations of "questionably timed insider stock sales" and "improbably dated executive stock option grants." In March, the investigation was widened to include accounting practices.

The company has been working on corrections to past financial statements. In February, Sunrise estimated the restatement would reduce the profits originally reported for 1999 through 2005 by $98 million to $107 million.

Sunrise management maintains that there were no insider stock sales based on inside information and that no stock options were backdated, Mayr said yesterday.

The Securities and Exchange Commission is investigating more than 140 companies for backdating options -- the practice of choosing an award date when the stock price was low to increase the likelihood an employee would profit when the shares are sold. The practice is not illegal, but it can violate securities laws and accounting rules when it is not disclosed to investors.

At Sunrise, no other executives were found to have been involved in the alleged document destruction, Mayr said.

The company has said the allegations by the Service Employees International Union, a Sunrise shareholder, appeared designed to put pressure on management as the union tries to organize employees.

"Unfortunately, this sort of confirms our worst fears that something is amiss here," Stephen Abrecht, the union's director of benefit funds, said of Rush's suspension. The union has not been trying to organize Sunrise employees in the United States, Abrecht said.

Rush, 46, joined Sunrise in 2003 and was named chief financial officer in 2005. He previously worked as an executive at a real estate investment trust.

The Sunrise board named chief accounting officer Julie A. Pangelinan to serve as acting chief financial officer. She joined the company in 2006 from Marriott International.

Founded by the husband-and-wife team of Paul J. and Teresa M. Klaassen, Sunrise operates assisted living and other residential facilities.

Sunrise shares closed at $38.93 yesterday, down $1.80 or 4.4 percent.