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FORM 4
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OMB APPROVAL
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OMB NUMBER 3235-0287
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EXPIRES:SEPTEMBER 30, 1998
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ESTIMATED AVERAGE BURDEN
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HOURS PER RESPONSE.....0.5
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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, Section
17(a) of the Public Utility Holding Company Act of 1935 or Section 30(f)
of the Investment Company Act of 1940
[ ] CHECK THIS BOX IF NO LONGER
SUBJECT TO SECTION 16. FORM 4
OR FORM 5 OBLIGATIONS MAY
CONTINUE. SEE INSTRUCTION 1(B).
(PRINT OR TYPE RESPONSES)
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<TABLE>
<CAPTION>
<S> <C>
1. Name and Address of Reporting Person* 2. Issuer Name AND Ticker or 6. Relationship of Reporting Person(s) to Issuer
Prometheus Homebuilders LLC Trading Symbol (Check all applicable)
("Prometheus") The Fortress Group, Inc. (NASD: ______ Director X 10% Owner
LF Strategic Realty Investors II FRTG) -------
L.P. ("LFSRI II") ______ Officer _______ Other
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(Last) (First) (Middle) 3. IRS 4. Statement
Identification for
Number of Month/Year
Reporting 8/98
Person, if
an entity
Thirty Rockefeller Plaza, 63rd (Voluntary)
Floor
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5. If 7. Individual or Joint/Group Filing (Check Applicable
(Street) Amendment, Line)
Date of ___ Form filed by One Reporting Person
Original X Form filed by More than One Reporting
New York NY 10020 (Month/Year) Person
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(City) (State) (Zip) TABLE I-- NON-DERIVATIVE SECURITIES ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED
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1. Title of Security 2.Transaction 3.Transaction 4. Securities 5. Amount 6.Ownership 7. Nature of
(Instr. 3) Date Code Acquired (A) of Form: Indirect
(Instr.8) or Disposed Securities Direct (D) Beneficial
(Month/Day/Year) of (D) Beneficially or Ownership
. (Instr. 3, 4 Owned Indirect (Instr. 4)
and 5) at End (I)
of Month (Instr. 4)
(Instr. 3
and 4)
-------------------------------
Code V Amount (A) Price
or
(D)
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S D and I
See See (1)
Common Stock 8/17/98 (1). 898,845 D $5.50/sh 898,845 below. See (1) below.
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</TABLE>
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY
VALID OMB CONTROL NUMBER
Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly. (Over) *If the form is filed by more than one
reporting person, SEE Instruction 4(b)(v) SEC 1474 (7-97)
<PAGE>
FORM 4 (CONTINUED) TABLE II -- DERIVATIVE SECURITIES
ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED
(E.G., PUTS, CALLS, WARRANTS, OPTIONS, CONVERTIBLE
SECURITIES)
<TABLE>
<CAPTION>
<S> <C>
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1.Title of 2.Conversion 3. Trans- 4.Trans- 5. Number of 6. Date 7.Title and 8.Price 9. Number 10.Ownership 11.Nature
Derivative or action action Derivative Exercisable Amount of of of Form of of
Security Exercise Date Code Securities and Underlying Derivative Derivative Derivative Indirect
(Instr. 3) Price (Month (Instr. Acquired Expiration Securities Security Securities Security: Benefi-
of Day/ 8) (A) or (Instr. 3 Benefi- Direct cial
Derivative Year Disposed Date and 4) (Instr. cially (D) or Owner-
Security (D) (Month/Day/ 5) Owned at Indirect ship
Year) End of (I) (Instr.
(Instr. 3, Month (Instr. 4)
4 and 5) (Instr. 4)
---------------------------------------------- 4)
Amount
or
Expira- Expira- Number
tion tion of
Code V (A) (D) Date Date Shares
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Class AA $6.00 (2) 8/17/98 J 40,000 3/6/98 None Common 6,666,667 $1000 40,000 D and I
Convertible See See Stock See (1) See (1) See (1)
Preferred Stock (1) (1) below. below below.
below. below
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Warrants $7.00 8/17/98 J 375,000 9/30/66 9/30/04 Common 1,000,000 $0.00 375,000 D and I
See See Stock See See (1) See (1)
(1) (1) (1) below below
below below below
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</TABLE>
Explanation of Responses:
(1) Prometheus is the direct owner of the interest in the Issuer. Prometheus has
three managing members: LFSRI II is a 86.1592% managing member, LFSRI II
Alternative Partnership L.P. ("Alternative") is a 10.3806% managing member and
LFSRI II-CADIM Alternative Partnership L.P. ("CADIM") is a 3.4602% managing
member. As a consequence of the foregoing, LFSRI II, Alternative and CADIM each
have an indirect interest in the Issuer, as described above.
(2) Subject to certain adjustments as set forth in the Class AA Convertible
Preferred Stock Certificate of Designation.
<TABLE>
<CAPTION>
<S> <C>
** Intentional misstatements or omissions of /s/ Murry N. Gunty 8/27/98
facts constitute Federal Criminal Violations. ----------------------------------------------------------------------
SEE 18 U.S.C. 1001 and 15 U.S.C. 78ff(a) ** Signature of Reporting Person Date
Murry N. Gunty
Note: File three copies of this Form, one Principal,
of which must be manually signed.
If space is insufficient, SEE Lazard Freres Real Estate Investors L.L.C.,
Instruction 6 for procedure. as general partner of LF Strategic Realty Investors II L.P.,
as one managing member of Prometheus Homebuilders L.L.C.,
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Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB Number.
Page 2
SEC 1474 (7-97)
</TABLE>
<PAGE>
FORM 4 (ATTACHMENT)
REPORTING PERSONS: PROMETHEUS HOMEBUILDERS LLC AND
LF STRATEGIC REALTY INVESTORS II L.P.
ISSUER NAME: THE FORTRESS, GROUP, INC. (NASD: FRTG)
MONTHLY PERIOD: AUGUST 1998
ALL REPORTING PERSONS:
LF Strategic Realty Investors II L.P.
Lazard Freres
Thirty Rockefeller Plaza, 63rd Floor
New York, New York 10020
LFSRI II Alternative Partnership L.P.
c/o Lazard Freres
Thirty Rockefeller Plaza, 63rd Floor
New York, New York 10020
LFSRI II-CADIM Alternative Partnership L.P.
c/o Lazard Freres
Thirty Rockefeller Plaza, 63rd Floor
New York, New York 10020
NY_DOCS\270440.1
