On Tuesday, Sunrise Senior Living (NYSE:SRZ) announced that its expects to take additional pre-tax charges of $22.8 million dollars in the 1st quarter of 2008 and also expect to book an impairment charge of $50 million dollars associated with its hospice line of business. This announcement follows the the company’s suspension of most of its condominium development projects and its failure to meet the deadline imposed by the New York Stock Exchange on filing its 2006 10-K. Besides the financial restatement, the announcement discussed modified covenants to various lending facilities along with a variety of corporate governance enhancements including the creation of a compliance officer. Sunrise shares finished the day lower by almost 15 percent to close at $19.59. Over the last year, the stock price has plummeted from a high of $42.97 in June.
Until Sunrise can file its annual reports and get back on a regular reporting basis, this company seems to continue to be on a rocky road from an investment standpoint. With the government snooping around its accounting and stock option granting practice and the continued revolving door of executives, the stock will probably be a stinker. Add the covenant modifications with the credit market issues and you’ve got a blazing inferno with Sunrise Senior Living shares.
For more information on the SEC Filing for Sunrise Senior Living, click here.