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| FORM 3 | U.S. SECURITIES AND EXCHANGE COMMISSION
+--------+ WASHINGTON, D.C. 20549
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
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
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1. Name and Address of Reporting Person
APOLLO INVESTMENT FUNDS III, L.P. (SEE ATTACHED)
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(Last) (First) (Middle)
TWO MANHATTANVILLE ROAD
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(Street)
PURCHASE, NEW YORK 10577
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(City) (State) (Zip)
2. Date of Event Requiring Statement (Month/Day/Year) 11/04/97
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3. IRS or Social Security Number of Reporting Person (Voluntary)
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4. Issuer Name and Ticker or Trading Symbol PARAGON HEALTH NETWORK, INC./PGN
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5. Relationship of Reporting Person to Issuer (Check all applicable)
[ ] Director [ ] Officer [X] 10% Owner [ ] Other
(give title below) (specify below)
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6. If Amendment, Date of Original (Month/Day/Year)
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TABLE I--NON-DERIVATIVE SECURITIES BENEFICIALLY OWNED
<TABLE>
<CAPTION>
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1. Title 2. Amount of 3. Ownership Form: 4. Nature of
of Securities Bene- Direct (D) or Indirect Bene-
Security ficially Owned Indirect (I) ficial Ownership
(Instr. 4) (Instr. 4) (Instr. 5) (Instr. 5)
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<S> <C> <C> <C>
COMMON STOCK 4,789,197 SHARES# D
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</TABLE>
Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly. (Print or Type Responses)
* If the form is filed by more one reporting person. See Instruction 5(b)(v).
Page 1 of 5
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FORM 3 (continued)
TABLE II--DERIVATIVE SECURITIES BENEFICIALLY OWNED
(e.g., puts, calls, warrants, options, convertible securities)
<TABLE>
<CAPTION>
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1. Title of Derivative 2. Date Exer- 3. Title and Amount of Securities 4. Conversion 5. Ownership 6. Nature of In-
Security (Instr. 4) cisable and Underlying Derivative Security or Form of direct Bene-
Expiration (Instr. 4) Exercise Derivative ficial
Date Price Security: Ownership
(Month/Day/ of Direct (D) (Instr. 5)
Year) Derivative or In-
---------------------------------------------------- Security direct (I)
Date Expira- Amount or (Instr. 5)
Exer- tion Title Number of
cisable Date Shares
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<S> <C> <C> <C> <C> <C> <C> <C>
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</TABLE>
Explanation of Responses:
# Apollo Investment Funds III, L.P., Apollo Overseas Partners III, L.P.
and Apollo UK Partners III, L.P. (collectively, the "Funds") own 4,366,790
shares, 161,396 shares and 261,011 shares, respectively, of common stock of
Paragon Health Network, Inc. (the "Company"), and this represents the gross
beneficial ownership interest of the Funds in the equity securities of the
Company. The general partner of each of the Funds is Apollo Advisors II, L.P.
("Advisors"), whose general partner is Apollo Capital Management II, Inc.
("Apollo Capital"); the day to day manager for each of the funds is Apollo
Management, L.P. ("Apollo Management"), whose general partner is AIF III
Management, Inc. ("AIF Management"). Messrs. Leon Black and John Hannan,
executive officers and directors of Apollo Capital and AIF Management, and
principals of Advisors and Apollo Management, disclaim beneficial ownership of
the shares beneficially owned by any of the Funds. As permitted by the SEC
rules, the number of shares reported includes shares in excess of the
proportionate pecuniary interest, if any, of the Reporting Person in the equity
securities of the Company.
**Intentional misstatements or omissions of facts constitute Federal Criminal
Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
_________________________________________________ ____________________________
**Signature of Reporting Person Date
Note: File three copies of this Form, one of which must be manually signed.
If space provided is insufficient, See Instruction 6 for procedure.
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 of 5
SEC 1473 (7-96)
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Parties filing jointly with the designated filer in Item 1:
Apollo UK Partners III, L.P.
Two Manhattanville Road
Purchase, New York 10577
Apollo Overseas Partners III, L.P.
Two Manhattanville Road
Purchase, New York 10577
Apollo Advisors II, L.P.
Two Manhattanville Road
Purchase, New York 10577
Apollo Management, L.P.
Two Manhattanville Road
Purchase, New York 10577
Page 3 of 5
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APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II, Inc.,
Its General Partner
By: /s/ Michael D. Weiner
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Name: Michael D. Weiner
Title: Vice President
APOLLO OVERSEAS PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II, Inc.,
Its General Partner
By: /s/ Michael D. Weiner
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Name: Michael D. Weiner
Title: Vice President
APOLLO UK PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II, Inc.,
Its General Partner
By: /s/ Michael D. Weiner
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Name: Michael D. Weiner
Title: Vice President
Page 4 of 5
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APOLLO ADVISORS II, L.P.
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/ Michael D. Weiner
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Name: Michael D. Weiner
Title: Vice President
APOLLO MANAGEMENT, L.P.
By: AIF III Management, Inc.,
Its General Partner
By: /s/ Michael D. Weiner
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Name: Michael D. Weiner
Title: Vice President
Page 5 of 5
