SUN HEALTHCARE GROUP INC
8-K, 1999-06-09
SKILLED NURSING CARE FACILITIES
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<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT
     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported)               May 31, 1999


                           SUN HEALTHCARE GROUP, INC.

            (Exact name of registrant as specified in its charter)


       DELAWARE                   1-12040                        85-0410612
- -------------------------------------------------------------------------------
(State or other                 (Commission                    (IRS Employer
jurisdiction of                 File Number)                 Identification No.)
incorporation)

101 SUN AVENUE, N.E., ALBUQUERQUE, NEW MEXICO                       87109
- -------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)


                                 (505) 821-3355
- -------------------------------------------------------------------------------
               Registrant's telephone number, including area code


                                 NOT APPLICABLE
- -------------------------------------------------------------------------------
        (Former name or former address, if changed since last report)


<PAGE>   2

ITEM 5.   OTHER EVENTS

     On May 31, 1999,  Sun Healthcare  Group,  Inc.  ("Sun")  announced that the
waiver of covenant  defaults under its bank agreement expired on May 28 and that
its  bank  lenders  exercised  their  right to  prohibit  Sun  from  making  the
semiannual interest payment on Sun's 9-3/8% Subordinated Notes.

      Sun's  press  release is attached  to this  Current  Report on Form 8-K as
Exhibit 99.1 and is incorporated by reference herein and made a part hereof.


ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

     (c)   Exhibits.

     99.1 Press Release dated May 31, 1999.


                                    SIGNATURE

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                   SUN HEALTHCARE GROUP, INC.

                                   By:   /s/ William C. Warrick
                                   --------------------------------------------
                                   Name:   William C. Warrick
                                   Title:  Vice President, Corporate Controller

Dated:  June 8, 1999


                                        2
<PAGE>   3

                                INDEX TO EXHIBITS




EXHIBIT NO.      IDENTITY OF EXHIBIT

  99.1           Press release issued by the Registrant on May 31, 1999.



                                       3

<PAGE>   1
                                                                    Exhibit 99.1


                           SUN HEALTHCARE GROUP, INC.

                                        Contact:  Marjorie Goldstein (investors)
                                                         Phyllis Goodman (media)
                                                                    505-821-3355

     SUN HEALTHCARE GROUP PREVENTED FROM MAKING INTEREST PAYMENT ON BONDS

      ALBUQUERQUE,  N.M. May 31, 1999 - Sun Healthcare  Group,  Inc.  (NYSE:SHG)
announced  today that the waiver of covenant  defaults  under its bank agreement
expired  on May 28,  and that it will not  make the May 31  semiannual  interest
payment on the company's 9? % Subordinated  Notes.  Although the company has the
funds to make the payment,  its bank lenders have exercised a contractual  right
blocking the company's ability to do so.

      The company continues to have discussions with its banks about a long-term
amendment  of its credit  facility.  However,  unless  lifted by the banks,  the
payment block will  continue  until Nov. 23, 1999.  The company  believes it has
sufficient funds to pay its day-to-day trade obligations.

      Separately, Sun announced the retention of Donaldson, Lufkin & Jenrette as
financial adviser to the company.

      Headquartered  in  Albuquerque,  N.M.,  Sun Healthcare  Group,  Inc., is a
diversified   international  long-term  care  provider.  Sun  companies  operate
long-term  and  postacute  care  facilities  in the  United  States,  the United
Kingdom,  Spain,  Germany and Australia.  Sun  subsidiaries  provide therapy and
pharmacy services,  fulfill the medical supply needs of nursing homes, and offer
a comprehensive array of ancillary services for the healthcare industry.

      Statements  contained  in this  press  release  that  are  not  historical
statements,  including  but  not  limited  to  statements  containing  the  word
"believe," constitute  forward-looking  statements within the meaning of federal
law. The company  cautions  investors  that  forward-looking  statements are not
guarantees of future performance, and they are subject to numerous uncertainties
and risks that could  cause the  company's  actual  results  or  performance  to
materially differ from management's  current  expectations.  These uncertainties
and risks  include  but are not  limited to the  company's  ability to obtain an
amendment  to its bank credit  facility,  the  company's  continuing  ability to
service its debt obligations,  the company's  ability to successfully  implement
its plans to respond  to PPS,  the  effects  of changes in laws and  regulations
affecting the healthcare  industry,  the integration of company  acquisitions in
recent  years,  and such  other  factors  as  detailed  from time to time in the
company's  SEC  filings  including  Sun's  annual  report on form 10-K/A for the
fiscal year ended December 31, 1998.




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