Forbes Magazine and CFO.com both recently ran stories that painted a bleak picture for the outlook of Sunrise Senior Living (SRZ). Sunrise recently reported a $68.7 million third-quarter loss and that it does not expect to meet certain financial covenants before they come due at the end of 2008. The company is trying to refinance these facilities but in the current environment that appears to be challenging. As revenues decline / stay flat, Sunrise’s costs continue to go up leaving the company faces cash flow shortfalls for its operations. Will Sunrise need to sell some of its properties to generate cash flow or more importantly can anyone buy a property and finance it? Unless something happens soon, Sunrise could be on the road to a restructure through a bankruptcy filing.
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