Sunrise Dismisses CFO After Documents Flap

Sunrise Senior Living has fired Chief Financial Officer Bradley B. Rush, who was suspended last week for actions allegedly "not consistent with . . . document retention directives."

In a news release yesterday, Sunrise said its board had terminated Rush "for cause" effective Wednesday. The company did not explain the cause.

Rush declined to comment. Sunrise management officials did not return calls.

Directors of the McLean firm, which operates assisted-living facilities, have been conducting a wide-ranging investigation of stock sales by insiders, the timing of stock option grants and accounting practices.

Early in the investigation, the board issued a directive to executives on retaining documents, company spokeswoman Lisa Mayr said last week.

In an interview last week, Mayr said, "We believe that some records were destroyed." After that quote was included in an article in The Washington Post, Mayr sent an e-mail saying she had been misquoted.

"In fact, no conclusions have been reached that records or documents were destroyed by Mr. Rush in contravention of a document retention directive issued by the Company," Mayr said in the April 26 e-mail. "The only conclusion reached was that contained in the press release -- that the actions taken by Mr. Rush were not consistent with the document retention directives issued by the company."

Mayr did not respond to messages by phone and e-mail from the newspaper following up on her complaint.

Rush was suspended with pay on April 23. He became chief financial officer in 2005 after joining the company in 2003.

The company has been preparing a restatement of past financial results, and it predicted in February that the corrections would erase $98 million to $107 million of profit it had claimed from 1999 through 2005.

The investigation by a committee of the Sunrise board was prompted by a labor union's allegations of "questionably timed insider stock sales" and "improbably dated executive stock option grants."

Backdating stock-option grants to increase their value can violate securities laws and accounting rules if the backdating is not properly disclosed.

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