For Immediate Release Sun Healthcare Group, Inc. Announces Acquisition of Allegiance Hospice Group, Inc.; Expands SolAmor Hospice Coverage • Press Release • Source: Sun Healthcare Group, Inc. • On Thursday October 1, 2009, 4:05 pm EDT IRVINE, CA--(Marketwire - 10/01/09) - Sun Healthcare Group, Inc. (NASDAQ:SUNH - News) announced today that its subsidiary, SolAmor Hospice Corporation, has completed the acquisition of Allegiance Hospice Group, Inc. Allegiance is a privately-held, Medicare-certified hospice company headquartered in Lowell, Mass. that provides services to approximately 300 hospice patients in Maine, Massachusetts and New Hampshire. " The geographic markets that Allegiance serves fit perfectly with the SolAmor markets, and the acquisition is expected to increase the size of SolAmor's revenue by almost 70 percent," said Richard K. Matros, chairman and chief executive officer of Sun Healthcare Group, Inc. "We are pleased with the performance of SolAmor and look forward to additional opportunities to grow in this segment," added Matros. With this transaction, SolAmor Hospice will provide hospice services in eight states to approximately 860 patients daily, with an annualized revenue run rate of approximately $43.0 million. About Sun Healthcare Group, Inc. Sun Healthcare Group, Inc., with executive offices in Irvine, California, owns SunBridge Healthcare Corporation and other affiliated companies that operate healthcare centers in many states. In addition, the Sun Healthcare Group family of companies provides therapy through SunDance Rehabilitation Corporation, hospice services through SolAmor Hospice and medical staffing through CareerStaff Unlimited, Inc. Statements made in this release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," "may" and similar expressions. Factors that could cause actual results to differ are identified in the public filings made by the company with the Securities and Exchange Commission and include changes in Medicare and Medicaid reimbursements; our ability to maintain census levels; the effects of government regulations and investigations; and the impact of the current economic downturn on our business. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission, including our Annual Report on Forms 10-K and 10-K/A and Quarterly Reports on Form 10-Q and 10-QA, copies of which are available on Sun's web site, www.sunh.com. The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by Sun are not guarantees of future performance. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments. Any documents filed by Sun with the SEC may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and stockholders of Sun may obtain free copies of the documents filed with the SEC by contacting Sun's investor relations department at (505) 468-2341 (TDD users, please call (505) 468-4458) or by sending a written request to Investor Relations, Sun Healthcare Group, Inc. 101 Sun Avenue N.E., Albuquerque, N.M. 87109. You may also read and copy any reports, statements and other information filed by Sun with the SEC at the SEC public reference room at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 or visit the SEC's web site for further information. Contact: Investor Inquiries (505) 468-2341 Media Inquiries (505) 468-4582