SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

FOSTER MICHAEL J

(Last)

(First)

(Middle)

C/O RFE MANAGEMENT CORP.

36 GROVE STREET

(Street)

NEW CANAAN

06840

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
SUN HEALTHCARE GROUP INC [ SUNH ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
05/29/2007

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock⁽⁶⁾	05/29/2007		S		200,000⁽⁹⁾	D	$14.3422	1,174,933	D
Common Stock⁽⁷⁾	05/29/2007		S		200,000⁽⁹⁾	D	$14.3422	1,185,674	D
Common Stock⁽⁶⁾	05/30/2007		S		57,500⁽⁹⁾	D	$14.4214	1,117,433	D
Common Stock⁽⁷⁾	05/30/2007		S		57,500⁽⁹⁾	D	$14.4214	1,128,174	D
Common Stock								4,028	I	See Footnote⁽²⁾⁽³⁾⁽⁴⁾
Common Stock								4,028	I	See Footnote⁽³⁾⁽⁴⁾⁽⁵⁾
Common Stock								2,966	I	See Footnote⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾
Common Stock								2,967	I	See Footnote⁽¹⁾⁽³⁾⁽⁴⁾⁽⁵⁾
Common Stock								1,432	I	See Footnote⁽²⁾⁽³⁾⁽⁴⁾⁽⁸⁾
Common Stock								1,433	I	See Footnote⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁸⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)

Explanation of Responses:

1. Grant of restricted stock units to Michael J. Foster, a director of the Issuer. The units were originally awarded May 31, 2006 under the Issuer's 2004 Equity Incentive Plan, but were subject to the satisfaction of certain performance targets. On February 27, 2007, the Issuer's Compensation Committee determined the level that those performance targets were satisfied. The units vest at the rate of 25% on each of June 30, 2007 and May 31, 2008, 2009 and 2010 and, upon vesting, will be paid on a one-for-one basis in shares of the Issuer's Common Stock.

2. Restricted stock units comprised of shares of Common Stock which are held by Michael J. Foster, a director of the Issuer, on behalf of RFE Investment Partners V, L.P. ("RFE V"), which restricted stock units may be deemed to be indirectly owned by RFE V

3. RFE Associates V, L.P. ("RFE V Associates") is the general partner of RFE V. RFE Associates VI SBIC, LLC ("RFE Associates VI SBIC") is the general partner of RFE VI SBIC. RFE Investment Partners VI, L.P. ("RFE VI") is the sole member of RFE Associates VI SBIC. RFE Associates VI, LLC ("RFE Associates VI") is the general partner of RFE VI. RFE Management Corp. ("RFE Management") is an investment manager. Messrs. Michael J. Foster, Howard C. Landis and James A. Parsons are general partners and/or managing members of RFE Associates V and RFE Associates VI and officers and/or directors of RFE Management. RFE V and RFE VI SBIC cease to hold, in the aggregate, over 10% of the Issuer's Common Stock. As a result, such entities and the other entities and persons (other than Mr. Foster) have ceased to be reporting persons.

4. Mr. Foster is also a director of the Issuer.

5. Restricted stock units comprised of shares of Common Stock which are held by Michael J. Foster, a director of the Issuer, on behalf of RFE VI SBIC, L.P. ("RFE VI SBIC"), which restricted stock units may be deemed to be indirectly owned by RFE VI SBIC.

6. Shares are held directly by RFE V.

7. Shares are held directly by RFE VI SBIC.

8. Grant of stock options to Michael J. Foster, a director of the Issuer. The options were originally awarded May 31, 2006 under the Issuers' 2004 Equity Incentive Plan, but were subject to the satisfaction of certain performance targets. On February 27, 2007, the Issuer's Compensation Committee determined the level that those performance targets were satisfied. The options vest at the rate of 25% on each of May 31, 2007, 2008, 2009 and 2010.

9. Sale of shares pursuant to Rule 10b5-1 Plan adopted on December 8, 2006, as amended.

	/s/ James A. Parsons, by power of attorney, for Michael J. Foster	05/29/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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