_______________________________________________________
                                  
                 SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
                                  
                       ______________________
                                  
                              FORM 10-Q
                       _______________________

(Mark One)
    [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
            For the quarterly period ended June 30, 1997
                                  
                                 OR

    [    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
                Commission file number _____________

                        _____________________
                                  
                       PRIME SUCCESSION, INC.
       (Exact name of registrant as specified in its charter)
                        _____________________
                                  

                 DELAWARE                            13-3904211
      (State or Other Jurisdiction of             (I.R.S. Employer
      Incorporation or Organization)            Identification No.)


       3940 Olympic Blvd., Suite 300                   41018
        Erlanger, Kentucky, U.S.A.                 (Postal Code)
 (Address of principal executive offices)

                           (606) 746-6800
        (Registrant's telephone number, including area code)
                                  

     Indicate by check mark whether the registrant: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such 
shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the 
past 90 days. Yes    X           No ______

     The number of outstanding shares of Common Stock as of August 13, 1997, 
was 100.
                -----------------------------------------------

       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
               


                            TABLE  OF  CONTENTS


                                                                                
                                                                         Page
Part I. FINANCIAL  INFORMATION
                                  
        Item 1.  FINANCIAL  STATEMENTS:

        CONSOLIDATED  BALANCE  SHEETS         
          as of June 30, 1997 and December 31, 1996                        1

        CONSOLIDATED  STATEMENTS OF OPERATIONS
          for the Three Months Ended June 30, 1997 and 1996
          and the Six Months Ended June 30, 1997 and 1996                  3

        CONSOLIDATED  STATEMENTS  of  CASH  FLOWS
          for the Six Months Ended June 30, 1997 and 1996                  4

        NOTES  to INTERIM  CONSOLIDATED  FINANCIAL  STATEMENTS             5

        Item 2. MANAGEMENT'S  DISCUSSION  and  ANALYSIS
                of FINANCIAL  CONDITION  and  RESULTS  of OPERATIONS       6


Part II. OTHER  INFORMATION

        Item 5. OTHER INFORMATION                                         12

        Item 6. EXHIBITS and  REPORTS  on  FORM  8-K                      12


SIGNATURES                                                                12

                                (i)











































       

                                 
                              

                                   PART I
                                  
ITEM 1.   FINANCIAL STATEMENTS


                                  
               PRIME SUCCESSION, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheets

                                             June 30, 1997   December 31, 1996
                                              (unaudited)

                                   Assets

Cash and cash equivalents                      $ 1,564,253      $ 2,985,704
Restricted cash                                         --        4,388,837
Receivables:                                                               
  Trade, less allowance of $2,514,376
 and $2,834,438                                 12,961,295       11,286,384
  Other                                          1,147,429          785,586
                                                ----------       ----------
     Total receivables                          14,108,724       12,071,970
                                                ----------       ----------
Inventories:
  Merchandise                                    3,762,922        2,951,913
  Cemetery lots and mausoleum spaces             1,918,008        1,115,342
                                                 ---------        ---------
     Total inventories                           5,680,930        4,067,255
                                                 ---------        ---------
Prepaids and other current assets                  299,498          354,576
Prepaid fees to shareholders                       125,000          375,000
Deferred income taxes                              446,249          371,249
                                                ----------       ----------
     Total current assets                       22,224,654       24,614,591
                                                ----------       ----------
Property and equipment:                         
  Land and land improvements                    16,091,870       16,101,845
  Buildings and improvements                    46,021,510       45,664,076
  Equipment, furniture and fixtures              8,197,545        7,363,265
  Accumulated depreciation                     (1,907,140)        (741,179)
                                               -----------       ----------
     Net property and equipment                 68,403,785       68,388,007
                                               -----------       ----------
Developed cemetery properties                   12,374,257       12,951,162
Undeveloped cemetery properties                 31,139,560       30,616,355
Goodwill, less accumulated amortization
of $4,667,974 and $1,789,876                   226,756,662      228,215,892
Other intangible assets, less accumulated
amortization of $3,728,303 and $1,548,680       25,335,072       27,621,587
Long-term receivables, less allowance of
$2,966,837 and $2,731,216                        7,367,589        5,584,119
Other assets                                       621,569          796,489
                                               -----------      -----------
                                              $394,223,148     $398,788,202
                                               ===========      ===========
See accompanying notes to interim consolidated financial statements.

                                 -1-



                                  
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 


                   
                          
                                 


               PRIME SUCCESSION, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheets

                                             June 30, 1997   December 31, 1996
                                              (unaudited)

                                  
                Liabilities and Shareholders' Equity


Accounts payable                              $  2,408,577     $  2,695,283
Other accrued expenses                          11,076,787       11,255,743
Bank indebtedness under revolving loan           3,000,000               --
Current installments of obligations under
agreements with former owners                    2,639,344        3,326,127
Current installments of long-term debt           1,423,675        5,253,936
                                                ----------       ----------
     Total current liabilities                  20,548,383       22,531,089
                                                ----------       ----------
Deferred merchandise liabilities and revenues,
less trust fund deposits                        20,670,182       19,612,190
Obligations under agreements with former owners,
less current installments                       15,804,975       17,568,971
Long-term debt, less current installments      190,411,593      189,752,128
Deferred income taxes                           18,316,831       18,316,831
Other long-term liabilities                      3,537,429        4,402,013
Shareholders' equity:
  Common stock, par value $.01 per share,
    1,000 shares authorized;
    100 issued and outstanding shares                    1                1
  Additional paid-in capital                   129,554,499      129,554,499
  Accumulated deficit                          (4,620,745)      (2,949,520)
                                              ------------     ------------
     Total shareholders' equity                124,933,755      126,604,980
                                              ------------     ------------
                                              $394,223,148     $398,788,202
                                              ============     ============
See accompanying notes to interim consolidated financial statements.

                                 -2-



















                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 





               PRIME SUCCESSION, INC. AND SUBSIDIARIES
                Consolidated Statements of Operations
                             (unaudited)


                              Three Months Ended      Six Months Ended
                                   June 30,               June 30,
                            1997            1996        1997        1996
                          Successor      Predecessor  Successor   Predecessor
                           Company         Company     Company     Company
                                  
Revenues:
Funeral services         $18,408,473    $17,776,346   $37,868,384  $36,991,843
Cemetery sales             5,955,431      3,491,057    10,690,810    6,795,355
                         -----------    -----------   ----------- ------------
                          24,363,904     21,267,403    48,559,194   43,787,198

Costs and expenses:
Funeral homes             11,588,419     12,454,641    23,689,070   24,925,443
Cemetery                   4,203,241      2,424,469     7,617,081    4,974,851
                         -----------    -----------   -----------  ----------- 
                          15,791,660     14,879,110    31,306,151   29,900,294

Corporate general and
administrative expenses     833,191       1,903,797     1,710,979    3,670,410
Depreciation and
amortization              2,692,261      1,905,514      5,423,920    3,832,765
Legal settlement              --            70,328          --       6,344,313
                        -----------    -----------    -----------  -----------
Operating income          5,046,792      2,508,654     10,118,144       39,416
                        -----------    -----------    -----------   ----------

Other expenses (income):
Interest expense, including 
amortization ofdeferred
loan costs (see Note 2)   5,771,936     3,827,522     11,763,684     7,605,629
Other income                  --         (242,428)         --          (94,170)
                        -----------   -----------    -----------    ----------
                          5,771,936     3,585,094     11,763,684     7,511,459
                        -----------   -----------    -----------    ----------
Loss before income taxes   (725,144)   (1,076,440)    (1,645,540)   (7,472,043)
Income tax benefit (expense)  3,657       (66,376)       (25,685)     (253,459)
                        -----------    -----------    -----------   ----------
Net loss                  (721,487)    (1,142,816)    (1,671,225)   (7,725,502)
Redeemable Preferred Stock
dividend requirements        --          (103,916)         --         (207,833)
                        -----------    -----------    -----------   -----------
Net loss attributable to
common shareholders      $(721,487)   $(1,246,732)   $(1,671,225)  $(7,933,335)
                         ==========   ============   ============  ============
Net loss per share
attributable to 
common shareholders      $ 7,214.87   $     --       $  16,712.25  $    --     
                         ==========   ============   ============  ============

See accompanying notes to interim consolidated financial statements.
                                
                                -3-




                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 


               
               
               PRIME SUCCESSION, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows
                             (unaudited)



                                                Six Months Ended
                                                    June 30,
                                               1997                 1996
                                       Successor Company   Predecessor Company
                                  
                                  
Cash flows from operating activities:
Net loss                             $    (1,671,225)         $  (7,725,502)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
     Depreciation and amortization         6,314,790              4,256,046
     Provision for doubtful accounts         448,775                 35,653
     Provision for deferred income taxes       --                    44,896
     Legal settlement                          --                 6,344,313
     Payment on legal settlement               --                (1,050,000)
     Changes in operating assets and
     liabilities net of effects of
     acquisition of subsidiaries:
         Receivables                      (3,354,044)              (635,953)
         Inventories                      (1,264,813)               (67,508)
         Accounts payable and accrued
         expenses                         (1,189,968)             1,023,715
         Deferred merchandise liabilities
         and revenue (net)                 1,031,922              1,724,935
         Other                            (1,615,799)              (481,529)
                                         ------------           ------------
Net cash provided by (used in) operating
activities                                (1,300,362)             3,469,066
                                         ------------           ------------

Cash flows from investing activities:
 Proceeds from the disposal of assets        175,598                148,210
 Purchases of property and equipment      (1,423,826)              (939,584)
 Net cash paid for purchase of business     (506,542)              (675,000)
                                         ------------           ------------
Net cash used in investing activities     (1,754,770)            (1,466,374)
                                         ------------           ------------

Cash flows from financing activities:
 Proceeds from long-term debt                530,223                618,000
 Proceeds from short-term debt             3,000,000                  --     
 Payments on long-term debt               (3,777,183)            (1,878,146)
 Payments on obligations under agreements
 with former owners                       (2,508,196)            (1,079,870)
 Decrease in restricted cash               4,388,837                  --     
 Capital Contributions                         --                 3,000,000
                                         ------------           ------------
Net cash provided by financing activities  1,633,681                659,984
                                         ------------           ------------
Net increase (decrease) in cash and cash
equivalents                               (1,421,451)             2,662,676
Cash and cash equivalents at beginning
of period                                  2,985,704                766,349
                                         ------------           ------------
Cash and cash equivalents at end of
period                                   $ 1,564,253            $ 3,429,025
                                         ===========            ===========


 See accompanying notes to interim consolidated financial statements.

                                -4-

                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  

                                  
                                  

                                  




               PRIME SUCCESSION, INC. AND SUBSIDIARIES

         Notes to Interim Consolidated Financial Statements
                             (unaudited)

(1)  On August 26, 1996, Prime Succession, Inc.'s (Predecessor Company) 
     capital stock was purchased (the Acquisition) by Blackstone Capital 
     Partners II Merchant Banking Fund L.P. and affiliates, Loewen Group 
     International, Inc. and PSI Management Direct L.P.  A new entity, Prime 
     Succession, Inc. (Successor Company), was formed and became a  wholly-owned
     subsidiary of the Predecessor Company. In connection with the Acquisition,
     all of the assets and liabilities of the Predecessor Company were 
     transferred to the Successor Company.  Collectively, the Predecessor 
     Company and Successor Company are herein referred to as "the Company".  
     Since purchase accounting was reflected in the opening balance sheet of the
     Successor Company on August 26, 1996, the financial statements of the 
     Successor Company are not comparable to the financial statements of the
     Predecessor Company.  Accordingly, a vertical black line is shown to 
     separate the Successor Company financial statements from those of the 
     Predecessor Company for the periods ended prior to August 26, 1996.

(2)  Interest expense includes amortization of deferred loan costs as follows:


                          Three Months Ended               Six Months Ended
                               June 30,                         June 30,
                          1997         1996               1997         1996

                       Successor  Predecessor          Successor  Predecessor
                        Company     Company             Company     Company

                       $452,397    $214,050            $890,870     $423,281

(3)  Footnote disclosure which would substantially duplicate the disclosure 
     contained in the Annual Report on Form 10-K for  the year ended 
     December 31, 1996 has not been included.  The unaudited interim 
     consolidated financial statements reflect all adjustments which, in the 
     opinion of management, are necessary to reflect a fair statement of the
     results for the periods presented and to present fairly the consolidated
     financial position of Prime Succession, Inc. and subsidiaries as of 
     June 30, 1997.  All such adjustments are of a normal recurring nature.
                                

                                -5-




















                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 



                                  



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS.
    
Overview

     The Company is an operator of funeral homes and cemeteries in the United 
States.  The Company owns 143 funeral homes and 19 cemeteries in 20 states as
of August 13, 1997.  The Company commenced operations in 1992 and expanded
rapidly through the aggressive acquisition of funeral homes and cemeteries,
primarily in non-urban areas of the United States.

     The Company had no funeral homes when it began operations in 1992 and 
grew to 146 funeral homes in 1996.  In order to achieve this rapid growth,
former management was primarily focused on identifying funeral homes to be
acquired and consummating acquisitions of such homes rather than on maximizing 
profitability of the funeral homes and cemeteries which it had acquired.  As a
result, former management did not take advantage of certain opportunities to
improve the efficiency and performance of the funeral homes acquired by the
Company.  New management intends to substantially eliminate the Company's
acquisition program.  In addition, in order to improve the Company's present 
and long-term operating performance, new management intends to take advantage
of (i) the quality and size of the Company's portfolio of properties, (ii) the
opportunity to operate more efficiently those properties located in close
proximity to one another, (iii) the shift in focus from acquisitions to profit
maximization at existing locations and (iv) the benefits at both local sites 
and the corporate headquarters from an Administrative Services Agreement with
Loewen Group International, Inc.  The Company's future results of operations
will depend largely upon the ability of management to successfully implement
its business strategy.

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Results of Operations

     The Company's operations are detailed below for the three months and the 
six months ended June 30, 1997 (Successor Company) and the corresponding
period in the prior year (Predecessor Company) expressed in dollar amounts as
well as relevant percentages.  Revenue, gross margin, earnings (loss) from
operations and expenses other than income taxes are presented as a percentage
of revenue.  Income taxes are presented as a percentage of losses before income
taxes.

Three Months Ended June 30, 1997 Compared to Three Months Ended June 30, 1996

                         Three months ended              Three months ended
                              June 30,                         June 30,
                         1997          1996              1997          1996
                       (millions of dollars)                 (percent)
                       Successor  Predecessor        Successor    Predecessor
                        Company     Company            Company      Company

Revenue                                 
 Funeral                $18.4         $17.8              75.4%         83.6%
 Cemetery                 6.0           3.5              24.6          16.4
                        -----         -----             ------        ------
 Total                  $24.4         $21.3             100.0%        100.0%
                        =====         =====             ======        ======
Gross Margin
 Funeral                 $6.8          $5.3              36.9%         29.8%
 Cemetery                 1.8           1.1              30.0          31.4
                        -----         -----             ------        ------
 Total                    8.6           6.4              35.2          30.0

Expenses
 General and
 administrative           0.8           1.9               3.3           8.9
 Cost of legal
 proceedings              --            0.1                --           0.5
 Depreciation and
 amortization             2.7           1.9              11.1           8.9
                        -----         -----             ------        ------
Earnings From Operations  5.1           2.5              20.9          11.7
Interest on long-term
debt                      5.8           3.8              23.8          17.8
  Other Income             --          (0.2)               --          (0.9)
                        -----         -----             ------        ------
Loss Before Income Taxes (0.7)         (1.1)             (2.9)         (5.2)
  Income taxes             --          (0.1)               --          (9.1)
                        -----         -----             ------        ------ 
Net Loss                $(0.7)        $(1.2)             (2.9)%        (5.6)%
                      ========       =======            ======        ======= 
  Consolidated revenues increased 14.6% to $24.4 million for the three months
ended June 30, 1997 compared to $21.3 million for the three months ended
June 30, 1996.  Sales of funeral services and cemetery sales accounted for
75.4% and 24.6%, respectively, of total revenues for the three months ended
June 30, 1997 compared to 83.6% and 16.4%, respectively, for the three months
ended June 30, 1996.  The increase in earnings from operations of $2.6 million
is due to enhanced pricing, merchandising and significant reduction in funeral
operating expenses for the period.  Funeral service revenues increased 3.4% to
$18.4 million, and cemetery revenues increased 71.4% to $6.0 million.  
Consolidated earnings from operations increased to $5.1 million for the three
months ended June 30, 1997 from $2.5 million for the three months ended June
30, 1996.  Funeral contribution margin was 36.9% and cemetery contribution
margin was 30.0% for the three months ended June 30, 1997 compared to 29.8%
and 31.4%, respectively, for the three months ended June 30, 1996.  
Contribution margin is defined as funeral revenues or cemetery revenues, as 
the case may be, less related cost of sales.  On a same-store business, 
excluding 1996 acquisitions and dispositions, total calls decreased by 229 
from 4,978 calls for the three months ended June 30, 1996  to 4,749 calls for
the three months ended June 30, 1997.  The average revenue per call increased
by $445 from $3,431 for the three months ended June 30, 1996  to $3,876 for
the three months ended June 30, 1997.  Cemetery revenues increased primarily
due to increased pre-need sales efforts in Alabama, Florida and Tennessee.
  
                                -7-













                                  


   General and administrative expenses decreased to $0.8 million for the three
months ended June 30, 1997 from $1.9 million for the three months ended June
30, 1996.  As a percentage of consolidated revenue, general and administrative
expense decreased to 3.3% for the three months ended June 30, 1997 compared to 
8.9% for the three months ended June 30, 1996.  General and administrative
expenses decreased due to the elimination of Corporate Development staff as
well as the implementation of a more efficient area management system.  The
majority of the Company's funeral service locations and cemeteries are managed
by area management in geographic clusters.   The clusters are established
primarily in non-urban areas.  The area manager has better day to day
management of the locations with reduced overhead and travel expenses.  

   The Company has also restructured its accounting and information systems to
be more effective and efficient.  The Company has chosen Lawson Software to 
provide software supporting a major systems upgrade project underway at the 
Company that is expected to enable the Company to connect all cluster
operations with timely operating and financial information in a cost
effective manner.  The Company began using this state of the art financial
package in the second quarter of 1997.

   Depreciation and amortization increased $0.8 million to $2.7 million for the
three months ended June 30, 1997 compared to $1.9 million for the three months
ended June 30, 1996.  The increase is due to the application of purchase 
accounting related to the Acquisition of the Company.

   Interest on long-term debt increased by $2.0 million to $5.8 million  for
the three months ended June 30, 1997 compared to $3.8 million for the three
months ended June 30, 1996 as a result of additional borrowings by the Company
to finance the Acquisition.

                                    
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Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996

                          Six months ended               Six months ended
                              June 30,                       June 30,
                         1997          1996             1997          1996
                       (millions of dollars)                 (percent)
                      Successor    Predecessor         Successor    Predecessor
                       Company       Company            Company       Company
Revenue
  Funeral               $37.9         $37.0              78.0%          84.5%
  Cemetery               10.7           6.8              22.0           15.5
                        -----         -----             ------         ------
      Total             $48.6         $43.8             100.0%         100.0%
                        =====         =====             ======         ======
Gross Margin
  Funeral               $14.1         $12.1              37.2%          32.7%
  Cemetery                3.1           1.8              29.0           26.5
                         ----          ----              -----          -----
      Total              17.2          13.9              35.4           31.7
Expenses
  General and 
    administrative        1.7           3.7               3.5            8.4
  Cost of legal
    proceedings            --           6.3                --           14.4
  Depreciation and
    amortization          5.4           3.8              11.1            8.7
                         ----          ----              ----           -----
Earnings From Operations 10.1           0.1              20.8            0.2
  Interest on long-term
    debt                 11.8           7.6              24.3           17.4
  Other Income             --          (0.1)               --           (0.2)
Loss Before Income Taxes (1.7)         (7.4)             (3.5)         (16.9)
  Income taxes             --          (0.3)               --           (4.1)
                         -----         -----             ------        ------
Net Loss                $(1.7)        $(7.7)             (3.5)%        (17.6)%
                        ======        ======             ======        ======
   Consolidated  revenues increased 11.0% to $48.6 million for the six months
ended June 30, 1997 compared to $43.8 million for the six months ended June 30,
1996.  Sales of funeral services and cemetery sales accounted for 78.0% and 
22.0%, respectively, of total revenues for the six months ended June 30, 1997 
compared to 84.5% and 15.5%, respectively, for the six months ended June 30, 
1996.  Funeral service revenues increased 2.4% to $37.9 million, and cemetery 
revenues increased 57.4% to $10.7 million.  Consolidated earnings from 
operations increased to $10.1 million for the six months ended June 30, 1997 
from $6.4 million for the six months ended June 30, 1996 before the $6.3
million legal settlement with Jeffrey Gamble.  The increase in earnings from
operations of $3.7 million is due to enhanced pricing, merchandising and
significant reduction in funeral operating expenses for the period.  Funeral
contribution margin was 37.2% and cemetery contribution margin was 29.0% for
the six months ended June 30, 1997 compared to 32.7% and 26.5%, respectively,
for the six months ended June 30, 1996.  Contribution margin is defined as
funeral revenues or cemetery revenues, as the case may be, less related cost
of sales.  On a same-store business, excluding 1997 acquisitions and
dispositions , total calls decreased by 686 from 10,660 calls for the six
months ended June 30, 1996 to 9,974 calls for the six months ended June 30,
1997.  The average revenue per call increased by $366 from $3,431 for the six
months ended June 30, 1996  to $3,797 for the six months ended June 30, 1997.
Cemetery revenues increased primarily due to increased pre-need sales efforts
in Alabama, Florida and Tennessee.

   General and administrative expenses decreased to $1.7 million for the six 
months ended June 30, 1997 from $3.7 million for the six months ended June 30, 
1996.  As a percentage of consolidated revenue, general and administrative 
expense decreased to 3.5% for the six months ended June 30, 1997 compared to 
8.4% for the six months ended June 30, 1996.  General and administrative 
expenses decreased due to the elimination of Corporate Development staff as
well as the implementation of a more efficient area management system.  The
majority of the Company's funeral service locations and cemeteries are managed
by area management in geographic clusters.   The clusters are established
primarily in non-urban areas.  The area manager has better day to day
management of the locations with reduced overhead and travel expenses.  
                                   
   The Company has also restructured its accounting and information systems to 
be more effective and efficient.  The Company has chosen Lawson Software to 
provide software supporting a major systems upgrade project underway at the 
Company that is expected to enable the Company to connect all cluster
operations with timely operating and financial information in a cost effective
manner.  The Company began using this state of the art financial package in the
second quarter of 1997.

   Depreciation and amortization increased $1.6 million to $5.4 million for the
six months ended June 30, 1997 compared to $3.8 million for the six months 
ended June 30, 1996.  The increase is due to the application of purchase 
accounting related to the Acquisition of the Company.
                                -9-      
   Interest on long-term debt increased by $4.2 million for the six months
ended June 30, 1997 compared to the six months ended June 30, 1996 as a result
of additional borrowings by the Company to finance the Acquisition.

Liquidity and Capital Resources

   Historically, the Company's primary sources of cash have been funds provided
by operating activities, proceeds from additional long-term debt and, prior to 
the Acquisition, capital contributions by the Company's then  majority 
shareholder.

   As of June 30, 1997, the Company had a net working capital of $1.7 million 
and a current ratio of 1.08:1, compared to a net working capital of $2.1 
million and a current ratio of 1.09:1 as of December 31, 1996.

   Under the Bank Revolving Facility (as defined below), the Company may borrow
up to $25.0 million  for general corporate purposes until August 26, 2001.   
The loans thereunder bear interest at the Base Rate or the Adjusted Eurodollar 
Rate, each as defined thereunder.  There is a commitment fee of 0.5% on the 
unused portion of the credit line.  There were outstanding borrowings of $3.0 
million on the credit line as of June 30, 1997.

   Net cash used in operating activities was $1.3 million for the six months 
ended June 30, 1997, compared to net cash provided by operating activities of 
$3.5 million for the same period in 1996, for a decrease of $4.8 million.  The 
net loss was reduced by $6.0 million from $7.7 million in 1996 compared to
1996 and non-cash adjustments increased by $2.5 million compared to 1996 for
depreciation and amortization of goodwill, deferred finance costs and
provision for doubtful accounts.  The decrease in legal settlements of $5.3
million is the most significant change compared to 1996.  The net increase of
$2.7 million in accounts receivable compared to 1996 is attributable to
increased pre-need sales.  The increase of $1.2 million in inventories
compared to 1996 is attributable to the Company's remerchandising of all of
its selection rooms and cemetery inventory development.  Accounts payable
and other operating liabilities required a total of $1.2 million for the six
months ended June 30, 1997 compared to $1.0 million provided for the same
period in 1996. 

   The net increase of $0.3 million compared to 1996 in net cash used in 
investing activities primarily relates to the purchase of a funeral home 
building for $0.7 million that was previously leased.  The routine capital 
improvements to the Company's facilities is comparable to the prior year.  The
Company also acquired two cemeteries in January 1997 for $0.5 million.

   Net cash provided by financing activities represents the release of $4.4 
million in restricted cash that had been restricted pursuant to the Bank Credit
Facilities (as defined below) and $3.0 million in borrowings on the operating 
line of credit.  This was offset by the $2.5 million payment to satisfy certain
obligations under agreements with former owners of funeral homes and cemeteries
and other payments on long- term debt of $3.8 million.

   Contemporaneously with the consummation of the acquisition (the 
"Acquisition") of the Company's parent in August 1996, the Company entered into
senior secured amortization extended term loan facilities (the "Bank Term 
Facility") in an aggregate principal amount of $90 million, the proceeds of 
which were used to finance the Acquisition and related transaction costs, to
pre-fund certain capital expenditures and to refinance existing indebtedness 
of the Company, and a senior secured revolving credit facility (the "Bank 
Revolving Facility"; together with the Bank Term Facility, the "Bank Credit 
Facilities") in an aggregate principal amount of up to $25 million, the
proceeds of which will be used for general corporate purposes and a portion
of which may be extended (as agreed upon) in the form of swing line loans or
letters of credit for the account of the Company.  The Bank Term Facility will
mature on August 26, 2003 and the Bank Revolving Facility will mature on August
26, 2001. The Bank Term Facility is subject to amortization, subject to certain
conditions, in semi-annual installments in the amounts of $1 million in each
of the first three years after the anniversary of the closing date of the Bank 
Term Facility (the "Bank Closing"); $4 million in the fourth year after the
Bank Closing; $9 million in the fifth year after the Bank Closing; $12.5 
million in the sixth year after the Bank Closing and $61.5 million upon the
maturity of the Bank Term Facility.  The Revolving Credit Facility is payable
in full at maturity, with no prior amortization.

   All obligations under the Bank Credit Facilities and any interest rate 
hedging agreements entered into with the lenders or their affiliates in 
connection therewith are unconditionally guaranteed (the "Bank Guarantees") 
jointly and severally, by Prime Succession Holdings, Inc., the Parent Company, 
and each of the Company's existing and future domestic subsidiaries (the "Bank
Guarantors").   All obligations of the Company and the Bank Guarantors under 
the Bank Credit Facilities and the Bank Guarantees are secured by first
priority security interests in all existing and future assets (other than real
property and vehicles covered by certificates of title) of the Company and the
Bank Guarantors.   In addition, the Bank Credit Facilities are secured by a
first priority security interest in 100% of the capital stock of the Company
and each subsidiary thereof and all intercompany receivables.
                                -10-
                                     

   In connection with the Acquisition, the Company also issued $100 million of 
10 3/4% Senior Subordinated Notes due 2004, which were exchanged in January
1997 for $100 million of 10 3/4% Senior Subordinated Notes due 2004 (the
"Notes") that were registered under the Securities Act of 1933.  The Notes
mature on August 15, 2004.  Interest on the Notes is payable semi-annually on
February 15 and August 15 at the annual rate of 10 3/4%.  The Notes are
redeemable in cash at the option of the Company, in whole or in part, at any
time on or after August 15, 2000, at prices ranging from 105.375% with annual
reductions to 100% in 2003 plus accrued and unpaid interest, if any, to the
redemption date.  The proceeds of the Notes were used, in part, to finance the
Acquisition.

   The Company and its subsidiaries are subject to certain restrictive
covenants contained in the indenture relating to the Notes, including, but not
limited to, covenants imposing limitations on the incurrence of additional
indebtedness; certain payments, including dividends and investments; the
creation of liens; sales of assets and preferred stock; transactions with
interested persons; payment restrictions affecting subsidiaries; sale-leaseback
transactions; and mergers and consolidations.  In addition, the Bank Credit
Facilities contain certain restrictive covenants that, among other things,
limit the ability of the Company and its subsidiaries to dispose of assets,
incur additional indebtedness, prepay other indebtedness, pay dividends or make
certain restricted payments, create liens on assets, engage in mergers or
acquisitions or enter into leases or transactions with affiliates.

   As of June 30, 1997, the Company had $194.8 million of indebtedness 
outstanding and $22 million of borrowing availability under the Bank Revolving 
Facility.  The Company believes that, based upon current levels of operations 
and anticipated growth and availability under the Bank Revolving Facility, it 
can adequately service its indebtedness.  If the Company cannot generate 
sufficient cash flow from operations or borrow under the Bank Revolving 
Facility to meet such obligations, then the Company may be required to take 
certain actions, including reducing capital expenditures, restructuring its 
debt, selling assets or seeking additional equity in order to avoid an event 
of default under the Bank Credit Facilities or the Indenture relating to the 
Notes.  There can be no assurance that such actions could be effected or would 
be effective in allowing the Company to meet such obligations.

                                -11-
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                    


PART II

ITEM 5 - OTHER INFORMATION

Forward-Looking Statements

     Certain statements in this Quarterly Report on Form 10-Q include "forward-
looking statements" as defined in Section 21E of the Securities Exchange Act of
1934.  All statements other than statements of historical facts included
herein, including, without limitation, the statements under Item 7
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's financial position, plans to increase
revenues, reduce general and administrative expense and take advantage of
synergies, are forward-looking statements.   Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable,
it can give no assurance that such expectations will prove to be correct.  
Important factors that could cause actual results to differ materially from the
Company's expectations ("Cautionary Statements") are disclosed herein, 
including, without limitation, in conjunction with the forward-looking 
statements included herein. 

   All subsequent written and oral forward-looking statements attributable to
the Company or persons acting on its behalf are expressly qualified in their 
entirety by the Cautionary Statements.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

   The Exhibits, as shown in the "Index of Exhibits", attached hereto as pages 
11 and 12, are filed as a part of this Report.



SIGNATURES
                                  
     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.


                                             PRIME SUCCESSION, INC.

                                             /s/ MYLES S. CAIRNS
                                             -----------------------
                                             Myles S. Cairns
                                             Chief Financial Officer,
                                             Secretary and Treasurer

August 13, 1997


                                -12-




                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                     
                             INDEX OF EXHIBITS


(a) Exhibit
    Number              Document Description

     3.1*      Certificate of Incorporation of Blackhawk Acquisition Corp.

     3.2*      Certificate of Amendment of Certificate of Incorporation of 
               Blackhawk Acquisition Corp. changing its name to Prime 
               Succession Acquisition Corp.
    
     3.3*      Certificate of Amendment of Certificate of Incorporation of 
               Prime Succession Acquisition Corp. changing its name to Prime 
               Succession, Inc.
       
     3.4*      By-Laws of Prime Succession, Inc.
       
     4.1*      Indenture dated as of August 15, 1996 between Prime Succession 
               Acquisition Corp. and United States Trust Company of New York, 
               as Trustee 

     4.2*      Form of 10 3/4% Senior Subordinated Note due 2004 (included in 
               Exhibit 4.1)
       
    10.1(a)*   Casket Supply Agreement, dated January 1, 1993, between 
               Batesville Casket Company, Inc. and Prime Succession, Inc.

    10.1(b)*   Amendment Agreement, dated August 1994, between Batesville 
               Casket Company, Inc. and Prime Succession, Inc. (with respect to
               Casket Supply Agreement)

    10.1(c)*   Amendment 2, dated May 22, 1995, between Batesville Casket 
               Company, Inc. and Prime Succession, Inc. (with respect to Casket
               Supply Agreement)
       
    10.2*      Stockholders' Agreement dated as of August 26, 1996 among Prime 
               Succession, Inc. (to be renamed Prime Succession Holdings,Inc.),
               Blackstone Capital Partners II Merchant Banking Fund L.P., 
               Blackstone Offshore Capital Partners II L.P., Blackstone Family 
               Investment Partnership II L.P., PSI Management Direct L.P. and 
               Loewen Group International, Inc.
       
    10.3*      Administrative Services Agreement dated as of August 26, 1996 
               between Prime Succession Acquisition Corp. (to be renamed Prime 
               Succession, Inc.) and Loewen Group International, Inc.
       
    10.4*      Credit Agreement dated as of August 26, 1996 among Prime 
               Succession, Inc. (to be renamed Prime Succession Holdings,Inc.),
               Prime Succession Acquisition Corp. (to be renamed Prime 
               Succession, Inc.), Goldman, Sachs & Co., as syndication agent 
               and arranging agent, the financial institutions from time to 
               time parties thereto as lenders and The Bank of Nova Scotia, as 
               administrative agent for such lenders.
       
    10.5*      Letter Agreement dated August 1, 1996 between Prime Succession 
               Acquisition Corp. (to be renamed Prime Succession, Inc.) and 
               Gary Wright.

    10.6*      Letter Agreement dated August 1, 1996 between Prime Succession 
               Acquisition Corp. (to be renamed Prime Succession, Inc.) and 
               Myles Cairns
       
    10.7*      Put/Call Agreement, dated as of August 26,1996, among Blackstone
               Capital Partners II Merchant Banking Fund L.P., Blackstone 
               Offshore Capital Partners II L.P., Blackstone Family Investment
               Partnership II L.P., PSI Management Direct L.P., Loewen Group 
               International Inc. and the Loewen Group Inc.
       
    10.8*      Stock Purchase Agreement, dated as of June 14, 1996, by and
               among Prime Succession, Inc., the individuals or entities listed
               on the signature pages thereof, The Loewen Group Inc. and
               Blackhawk Acquisition Corp.
       
                                -13-       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                    

(a)    Exhibit
       Number               Document Description
              
         12        Computation of Ratio of Earnings to Fixed Charges
       
         21*       Subsidiaries of Prime Succession, Inc. (formerly known as 
                   Prime Succession Acquisition Corp.)
       
         27        Financial Data Schedule
       
*  Incorporated by reference to the Exhibits to the Company's Registration 
   Statement on Form S-4 (Registration No. 333-14599).
    
    
(b)      Reports on Form 8-K
    
         None
    
    
                                -14-
    
    
   
    
    
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 

                                  
Exhibit 12
                                                                
Prime Succession, Inc. and subsidiaries
Ratio of Earnings to Fixed Charges
(Dollars in Thousands)
                                                                  
                                                                  
                           Three months ended          Six months ended
                                 June 30,                  June 30,
                            1997          1996        1997          1996
                          Successor    Predecessor  Successor    Predecessor
                           Company       Company     Company       Company
                                                                  
Ratio of Earnings to 
  Fixed Charges                                                 
                                                                  
Earnings:
  Loss before income
     taxes                  (725)          (1,076)      (1,645)      (7,472)
  Add:  Fixed charges, 
     net                   5,981            4,052       12,173        8,083
 
Income before income taxes
  and fixed charges, net   5,256            2,976       10,528          611 
                                                                  
Fixed Charges:
  Total interest 
     expense (1)           5,772            3,828       11,764        7,606
  Interest factor 
     in rents (2)            209              224          409          477
                                                                  
  Total fixed charges      5,981            4,052       12,173        8,083 
                                                                  
Ratio of earnings to
 fixed charges              0.88             0.73         0.86         0.08 
                                                                  
Coverage deficiency (3)      725            1,076        1,645        7,472 
                                                                  

FN
                                                                  
(1) Total interest expense for each period includes amortization of loan costs.
                                                                  
(2) Interest factor in rents represents one-third of rent expense, which is 
    considered representative of the interest factor.
                                                                  
(3) The Company's earnings are inadequate to cover fixed charges for all
    periods indicated above.  Coverage deficiency represents the excess of
    fixed charges over income before income taxes and fixed charges, net.
                                                                  
                                                                  
                                                                  































                                 
                                                                

Exhibit 27
                                                                  
Prime Succession, Inc. and subsidiaries
Financial Data Schedule
                                                                  
This schedule contains summary financial information extracted from the 
unaudited interim consolidated financial statements of Prime Succession, Inc.
and subsidiaries, for the six months ended June 30, 1997  and is qualified in
its entirety by reference to such financial statements.
                                                                  
multiplier 1,000
                                                                  
Period type                   6-mos
Fiscal year end               Dec-31-1997
Period end                    June 30-1997
cash                                 1,564 
securities                              --
receivables                         16,623 
allowances                           2,514 
inventory                            5,681 
current assets                      22,225 
pp&e                                70,311 
depreciation                         1,907 
total assets                       394,223 
current liabilities                 20,548 
bonds                              206,217 
common                                   -   
preferred mandatory                      -   
preferred                                -   
other se                           129,554 
total liabilities and equity       394,223 
sales                               48,559 
total revenues                      48,559 
cgs                                 31,306 
total costs                         31,306 
other expenses                       7,135 
loss provision                         449 
interest expense                    11,764 
income pretax                       (1,645)
income tax                              26 
income continuing                   (1,671)
discontinued                             -   
extraordinary                            -   
changes                                  -   
net income                          (1,671)
eps primary                              -   
eps fully diluted                        -