IRVINE, CA, Aug 13, 2010 — Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced the pricing of an underwritten public offering of 6,750,000 million shares of its common stock at a price to the public of $7.75 per share. Sun has granted the underwriters a 30-day option to purchase up to 4,012,500 additional shares of its common stock to cover over-allotments, if any. Sun expects to receive net proceeds, after deducting the underwriting discount and estimated offering expenses, of approximately $195.3 million from the offering, or $224.8 million if the underwriters exercise their over-allotment option in full. The offering is expected to close on Aug. 18, 2010, subject to customary closing conditions.

Sun intends to use the net proceeds from this offering to repay a portion of the outstanding term loans under its existing credit facility.

Jefferies & Company, Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc. are the joint book-running managers for this offering.

About Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc.’s (NASDAQ: SUNH) subsidiaries provide nursing, rehabilitative and related specialty healthcare services principally to the senior population in the United States. Sun’s core business is providing, through its subsidiaries, inpatient services, primarily through 166 skilled nursing centers, 16 combined skilled nursing, assisted and independent living centers, 10 assisted living centers, two independent living centers and eight mental health centers. On a consolidated basis, Sun has annual revenues of $1.9 billion and approximately 30,000 employees in 46 states. At June 30, 2010, SunBridge centers had 23,209 licensed beds located in 25 states, of which 22,427 were available for occupancy. Sun also provides rehabilitation therapy services to affiliated and non-affiliated centers through its SunDance subsidiary, medical staffing services through its CareerStaff Unlimited subsidiary and hospice services through its SolAmor subsidiary.