-----------------------------
OMB APPROVAL
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OMB Number: 3235-0145
EXPIRES: OCTOBER 31, 1997
ESTIMATED AVERAGE BURDEN
HOURS PER RESPONSE . . .14.90
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
THE FORTRESS GROUP, INC.
- --------------------------------------------------------------------------------
(NAME OF ISSUER)
- --------------------------------------------------------------------------------
Common Stock, par value $0.01 per share
(TITLE OF CLASS OF SECURITIES)
34956K108
(CUSIP NUMBER)
Murry N. Gunty
Prometheus Homebuilders LLC
LF Strategic Realty Investors II L.P.
LFSRI II Alternative Partnership L.P.
LFSRI II-CADIM Alternative Partnership L.P.
30 Rockefeller Plaza, 63rd Floor
New York, NY 10020
(212) 632-6000
with a copy to:
R. Ronald Hopkinson, Esq.
Latham & Watkins
885 Third Avenue
New York, New York 10022
(212) 906-1200
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 17, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
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SCHEDULE 13D
- ------------------------------- ------------------------------
CUSIP NO. 34956K108 PAGE 2 OF 11
--------------- -- ------ --
- ------------------------------- ------------------------------
- --------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Prometheus Homebuilders LLC
- --------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [ ]
- --------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF (See Item 3)
- --------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7 7,565,512(1)
SHARES ----------------------------------------------------------------------
BENEFICIALLY
OWNED BY SHARED VOTING POWER
EACH
REPORTING 8 None
PERSON ----------------------------------------------------------------------
WITH
SOLE DISPOSITIVE POWER
9 7,565,512
----------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10 None
- --------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 7,565,512
- --------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 41.3%
- --------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 OO (limited liability company)
- --------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
(1) Including 6,666,667 shares of Common Stock receivable upon conversion of the
Class AA Preferred Stock (as defined in the preamble) (See Item 5).
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<TABLE>
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SCHEDULE 13D
- ------------------------------- ------------------------------
CUSIP NO. 34956K108 PAGE 3 OF 11
--------------- -- ------ --
- ------------------------------- ------------------------------
- --------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 LF Strategic Realty Investors II L.P.
- --------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [X]
- --------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF (See Item 3)
- --------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
- --------------------------------------------------------------------------------------------
SOLE VOTING POWER
7 None
----------------------------------------------------------------------
NUMBER OF
SHARES SHARED VOTING POWER
BENEFICIALLY
OWNED BY 8 7,565,512(2) (See Item 2)
EACH ----------------------------------------------------------------------
REPORTING
PERSON SOLE DISPOSITIVE POWER
WITH
9 None
----------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10 7,565,512 (See Item 2)
----------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 7,565,512
- --------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 41.3%
- --------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 PN (limited partnership)
- --------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
(2) Including 6,666,667 shares of Common Stock receivable upon conversion of the
Class AA Preferred Stock (as defined in the preamble) (See Item 5).
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SCHEDULE 13D
- ------------------------------- ------------------------------
CUSIP NO. 34956K108 PAGE 4 OF 11
--------------- -- ------ --
- ------------------------------- ------------------------------
- --------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 LFSRI II Alternative Partnership L.P.
- --------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [X]
- --------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------
SOURCE OF FUNDS
4 AF (See Item 3)
- --------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
- --------------------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7 None
SHARES ----------------------------------------------------------------------
BENEFICIALLY
OWNED BY
EACH SHARED VOTING POWER
REPORTING
PERSON 8 7,565,512(3) (See Item 2)
WITH ----------------------------------------------------------------------
SOLE DISPOSITIVE POWER
9 None
----------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10 7,565,512 (See Item 2)
- --------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 7,565,512
- --------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 41.3%
- --------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 PN (limited partnership)
- --------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
(3) Including 6,666,667 shares of Common Stock receivable upon conversion of the
Class AA Preferred Stock (as defined in the preamble) (See Item 5).
</TABLE>
<PAGE>
<TABLE>
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PAGE 6 OF 11
- --------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 LFSRI II-CADIM Alternative Partnership L.P.
- --------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [X]
- --------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------
SOURCE OF FUNDS
4 AF (See Item 3)
- --------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
- --------------------------------------------------------------------------------------------
SOLE VOTING POWER
7 None
----------------------------------------------------------------------
NUMBER OF
SHARES SHARED VOTING POWER
BENEFICIALLY
OWNED BY 8 7,565,512(4) (See Item 2)
EACH ----------------------------------------------------------------------
REPORTING
PERSON
SOLE DISPOSITIVE POWER
9 None
----------------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 7,565,512 (See Item 2)
- --------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 7,565,512
- --------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 41.3%
- --------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 PN (limited partnership)
- --------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
(4) Including 6,666,667 shares of Common Stock receivable upon conversion of the
Class AA Preferred Stock (as defined in the preamble) (See Item 5).
</TABLE>
<PAGE>
PAGE 7 OF 11
This Amendment No. 3, dated August 27, 1998, which amends the Schedule
13D, dated March 3, 1998, (the "Previous Statement"), of the Reporting Persons
(as defined below) is filed to reflect information required pursuant to Rule
13d-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, relating to the purchase by Alternative and Cadim (each
defined below) of an interest in Prometheus (as defined below), the holder of
interests in the Issuer described in the Previous Statement.
ITEM 1. SECURITY AND ISSUER.
No change.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by Prometheus Homebuilders LLC, a Delaware
limited liability company ("Prometheus"), and LF Strategic Realty Investors II
L.P. ("LFSRI II"), LFSRI II Alternative Partnership L.P. ("Alternative") and
LFSRI II-CADIM Alternative Partnership L.P. ("Cadim"), each a Delaware limited
partnership (together, the "Reporting Persons").
(b) The principal business offices of the Reporting Persons are c/o
Lazard Freres Real Estate Investors LLC ("LFREI"), 30 Rockefeller Plaza, 63rd
Floor, New York, New York, 10020.
(c) Prometheus is a special purpose investment vehicle formed to acquire
and hold the Common Stock of the Company and the Preferred Stock, Warrants and
Supplemental Warrants as contemplated by the Stock Purchase Agreement, all as
described in the Previous Statement. LFSRI II, Alternative and Cadim are
investment partnerships formed to invest in companies active in the real estate
industry. The sole owner of Prometheus prior to the sale of membership interest
in Prometheus to Alternative and Cadim was LFSRI II, and the general partner of
LFSRI II, Alternative and Cadim is LFREI. LFSRI II, Alternative and Cadim own a
86.1592%, 10.3806% and 3.4602% managing member interest in Prometheus,
respectively. LFREI's activities consist principally of acting as general
partner of several real estate investment partnerships that are affiliated with
Lazard Freres & Co. LLC. ("Lazard"). Lazard disclaims beneficial ownership of
any of the shares of Common Stock reported in this Statement. The name, business
address and principal occupation or employment of the executive officers of
LFREI are set forth on Schedule 1 hereto and incorporated by reference herein.
(d) and (e) During the last five years, neither the Reporting Persons
nor, to the best knowledge of the Reporting Persons, any of the persons listed
in Schedule 1 hereto (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) nor (ii) has been a party to any
civil proceeding of a judicial or administrative body of competent jurisdiction,
and is or was, as a result of such proceeding, subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws, or finding any
violation with respect to such laws.
(f) Each person listed on such Schedule 1 is a citizen of the United
States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The consummation of the transactions will be pursuant to a Securities
Purchase Agreement, dated as of August 1, 1998, between LFSRI II and
Alternative, and a Securities Purchase Agreement, dated as of August 1, 1998,
between LFSRI II and Cadim (together, "Securities Purchase Agreements").
<PAGE>
PAGE 8 OF 11
The funds for both transactions are to be made available from capital
commitments of the Limited Partners of Alternative and Cadim.
ITEM 4. PURPOSE OF TRANSACTION.
Alternative and Cadim are co-investors with LFSRI II. Alternative and
Cadim are thus purchasing a portion of the investments owned by LFSRI II,
including the investment in Prometheus, the holder of securities of the Issuer
listed in Item 1 of the Previous Statement.
The foregoing discussion of the Securities Purchase Agreements is
qualified in its entirety by the full text of such agreements, a copy of which
is attached hereto as Exhibits 1 and 2 and is incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) By virtue of Alternative and Cadim being members of Prometheus, each
of Alternative and Cadim may beneficially own the interests of the Issuer
attributed to LFSRI II in the Previous Statement.
(b) No change.
(c) Neither the Reporting Persons nor, to the knowledge of the Reporting
Persons, any of the parties listed on Schedule 1 hereto have acquired any shares
of Common Stock of the Company during the past sixty days, other than the
purchases reported herein.
(d) No change.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
No change.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Stock Purchase Agreement dated as of August 1, 1998 between
LFSRI II and Alternative
Exhibit 2. Stock Purchase Agreement, dated as of August 1, 1998,
between LFSRI II and Cadim
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PROMETHEUS HOMEBUILDERS LLC
By: LF Strategic Realty Investors II L.P.,
as managing member
By: Lazard Freres Real Estate Investors L.L.C.,
as general partner
By: /s/ Murry Gunty
---------------
Name: Murry Gunty
Title: Principal
LF STRATEGIC REALTY INVESTORS II L.P.
LFSRI II ALTERNATIVE PARTNERSHIP L.P.
LFSRI II-CADIM ALTERNATIVE PARTNERSHIP L.P.
By: Lazard Freres Real Estate Investors L.L.C.,
as general partner
By: /s/ Murry Gunty
---------------
Name: Murry Gunty
Title: Principal
Dated: August 27, 1998
EXHIBIT 16
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to the joint
filing with all other Reporting Persons (as such term is defined in the Schedule
13D referred to below) on behalf of each of them of a statement on Schedule 13D
(including amendments thereto) with respect to the Common Stock of beneficial
interest, par value $0.01 per share, of The Fortress Group, Inc., a Delaware
corporation, and that this Agreement may be included as an Exhibit to such joint
filing. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of
the 27th day of August 1998.
PROMETHEUS HOMEBUILDERS LLC
By: LF Strategic Realty Investors II L.P.,
as sole member
By: Lazard Freres Real Estate Investors L.L.C.,
as general partner
By: /s/ Murry Gunty
---------------
Name: Murry Gunty
Title: Principal
LF STRATEGIC REALTY INVESTORS II L.P.
LFSRI II ALTERNATIVE PARTNERSHIP L.P.
LFSRI II-CADIM ALTERNATIVE PARTNERSHIP L.P.
By: Lazard Freres Real Estate Investors L.L.C.,
as general partner
By: /s/ Murry Gunty
---------------
Name: Murry Gunty
Title: Principal
<PAGE>
Page 11 of 11
SCHEDULE I
EXECUTIVE OFFICERS OF PROMETHEUS AND LFREI
The business address for each of the following persons is 30
Rockefeller Plaza, 63rd Floor, New York, NY 10020.
NAME OF OFFICER PRESENT AND PRINCIPAL OCCUPATION
- --------------- --------------------------------
Arthur P. Solomon Principal of LFREI
Anthony E. Meyer Principal of LFREI
Robert P. Freeman Principal of LFREI
Klaus P. Kretschmann Principal of LFREI
Murry N. Gunty Principal of LFREI
Thomas M. Mulroy Senior Vice President of LFREI
Lorenzo L. Lorenzotti Secretary of LFREI
Henry C. Herms Comptroller of LFREI
