You are hereWashington Post: Another Top Shareholder Comes Down On Sunrise

Washington Post: Another Top Shareholder Comes Down On Sunrise

June 15, 2007- A second large shareholder in Sunrise Senior Living has gone public with its criticism of the company's directors, saying they should kick out current management, including founder Paul J. Klaassen, and possibly even sell the McLean firm.

Millennium Partners, a New York hedge fund, said the changes are needed to boost the company's stock price to at least $54 a share. Some investors believe that would reflect the true value of the company's real estate and health-care facilities at the 444 senior living communities it operates in the United States, Canada and Europe. Sunrise stock, which closed up 8 cents yesterday at $41.60 per share, has largely traded in the mid- to high $30s over the past 12 months, but has been as low $24.40.

"Like many -- perhaps most -- of your shareholders, we are deeply disturbed and distressed at the current state of affairs," Millennium Partner executives Eduardo Abush and Simon Lorne wrote in a letter to the Sunrise board two weeks ago that was made public yesterday.

The demands from Millennium Partners follow recent criticism of Sunrise by the SEIU Master Trust, the national pension fund for the Service Employees International Union. Investors have been troubled by a 13-month review of financial statements that could force it to restate earnings from 1999 through 2005 by as much as $100 million, the firing of its chief financial officer last month with little explanation, and an ongoing investigation by the Securities and Exchange Commission of its accounting practices as well as stock sales by senior company executives and directors.

Millennium owns 1.3 million Sunrise shares, or 2.5 percent of the company's outstanding shares. In their letter, Millennium executives said Sunrise directors would be irresponsible not to consider steps to maximize shareholder value.


The letter specifically mentions U.S. Chamber of Commerce President Thomas J. Donohue, who has been a Sunrise director for more than a decade. Donohue, who as head of the chamber has fought additional SEC regulation as unnecessary, is among those whose trades the SEC said it is scrutinizing. Donohue has denied wrongdoing.


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