MCLEAN, VA – The contentious legal battle between a former chief financial officer and the largest provider of assisted-living services in the U.S. turned even uglier recently when Sunrise Senior Living made public allegations that Bradley B. Rush stored pornography on the laptop computer he was issued by the company.In a response Sunrise filed to the breach-of-contract and defamation suit Rush filed against it, the company revealed it had found “more than 25,000 unique pornographic images… including pornographic movies and references to webpage addresses and cached copies of webpages viewed” on the laptop Rush returned shortly before he was terminated in May 2007 for what the company called failure to adhere to its document-retention directives. In a separate filing, Rush called the allegation “irrelevant, salacious and harassing” and said the company is trying to intimidate him into dropping his claims against it.

The lawsuit is one in a series of public embarrassments for Sunrise, which for nearly two years has been plagued by a $130 million audit and accounting restatement. Rush was fired in the midst of the accounting tangle and claims Sunrise made him a scapegoat when its plans to be acquired by another company fell through. His suit seeks $13.5 million in lost compensation and other damages.

Rush and his attorneys have indicated the porn allegation may have been an afterthought, as it was not discussed publicly or mentioned by the company until its formal filing in response to Rush’s lawsuit. According to court documents filed by Sunrise, a special board-of-directors committee overseeing the audit told the board about the porn on Rush’s computer before he was terminated. It was only one of several reasons the company dismissed him.

“Upon suspending and then terminating Mr. Rush, Sunrise never stated that it was doing so because of the adult material allegedly discovered on Mr. Rush’s computers,” according to court documents filed by Rush’s attorneys, who have asked the court to dismiss the porn allegations.

A hearing on the matter is set for Friday.