SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1997

(  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number
0-20514

CORPORATE RENAISSANCE GROUP, INC.
Exact name of Registrant as specified in its charter

Delaware                                     13-3701354
(State or other jurisdiction                 (I.R.S. Employer
of incorporation or organization)            Identification No.)


1185 Avenue of the Americas                  10036
18th Floor                                             (Zip Code)
New York, New York
(Address of principal executive offices)

Registrant's telephone number: (212) 730-2000

Securities registered pursuant to Section 12(b) of the Act:
                                        Name of each exchange
Title of each class                          on which registered

NONE

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)

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.  [X]


Indicate  by check mark if disclosure of delinquent filers pursuant to Item  405
of  Regulation S-K (229.405 of this chapter) is not contained herein,  and  will
not be contained, to the best of registrant's knowledge, in definitive proxy  or
information statements incorporated by reference in Part III of this  Form  10-K
or any amendment to this Form 10-K.  [  ]


<PAGE>


      The  number  of  shares outstanding of the Registrant's  Common  Stock  is
940,350 (as of December 17, 1997).

      The  aggregate market value of the voting stock held by non-affiliates  of
the Registrant is approximately $4,411,770 (as of December 17, 1997).


                       DOCUMENTS INCORPORATED BY REFERENCE
                                        
                                      NONE
                                        
<PAGE>

                                        
                                        
                           Forward-Looking Statements

      This  Report  contains,  in addition to historical  information,  forward-
looking  statements regarding Corporate Renaissance Group, Inc. (the "Company"),
which represent the Company's expectations or beliefs including, but not limited
to,  statements  concerning  the  Company's operations,  performance,  financial
condition,  business strategies and other information.  For  this  purpose,  any
statements  contained in this Report that are not statements of historical  fact
may be deemed to be forward-looking statements.  Without limiting the generality
of   the   foregoing,   words  such  as  "may,"  "will,"  "expect,"   "believe,"
"anticipate,"  "intend," "could," "estimate," or "continue" or the  negative  or
other  variations  thereof or comparable terminology are  intended  to  identify
forward-looking statements.  The statements by their nature involve  substantial
risks and uncertainties, certain of which are beyond the Company's control,  and
actual  results  may  differ  materially depending on  a  variety  of  important
factors,  including  those  described in this Report  and  the  Company's  other
filings with the Securities and Exchange Commission (the "SEC").


<PAGE>
                                        
                                        
                                     PART I

ITEM 1.             BUSINESS

Introduction

      The Company is a non-diversified, closed-end management investment company
which has elected to be treated as a special type of investment company known as
a  business development company ("BDC") under the Investment Company Act of 1940
(the  "1940 Act") as amended by the Small Business Incentive Act of  1980.   The
Company's   primary  investment  objective  is  to  achieve  long-term   capital
appreciation  through investments in companies ("Portfolio Investments"),  which
the  Company  believes  have viable existing businesses  generating  substantial
revenues in established markets, but which have recently completed, are  in  the
process  of  undergoing  or are likely to undergo a financial  restructuring  (a
"Restructuring") pursuant to bankruptcy or reorganization proceedings  or  on  a
negotiated  basis  outside  of  bankruptcy  or  reorganization  proceedings   (a
"Reorganized Company") and where, as a result, the Company can ultimately obtain
an  equity position (either common or preferred stock) at a discount from market
value  for  comparable  companies  that  are  not  financially  troubled.   Such
investments are not generally available to the public because they require large
financial  commitments and, in some cases, managerial assistance.   The  Company
may  make  these  investments either on its own or,, more likely,  jointly  with
other  investors, including investment partnerships managed or advised  by  M.D.
Sass  Investors  Services, Inc. (the "Investment Adviser") and  its  affiliates.
Any  investments with affiliates of the Company will be subject to  restrictions
under the 1940 Act and conditions set forth in an exemptive order granted by the
SEC.   In  addition to Portfolio Investments, the Company may  invest  in  other
securities, including securities of financially distressed companies, where  the
Company  believes  that  it  can generate capital appreciation  by  engaging  in
portfolio trading ("Other Investments").

     The Company has retained the Investment Adviser as the Company's investment
adviser  pursuant  to  a Financial Advisory Agreement (the  "Financial  Advisory
Agreement")  to  identify, negotiate, manage and liquidate investments  for  the
Company.  The Company invests only in transactions recommended by the Investment
Adviser.  The activities of the Investment Adviser on behalf of the Company  are
subject to supervision by the independent directors of the Company.

      The  Company is deemed to have commenced operations on November  1,  1994,
when  the  Company  consummated an initial public offering  (the  "IPO")  and  a
contemporaneous  placement  to foreign institutional  investors  (the  "Overseas
Placement").   Since that time, the Company has made five Portfolio Investments,
two  of  which subsequently were sold.  At September 30, 1997, the  Company  had
three  Portfolio Investments:  Computervision Corporation ("Computervision"),  a
publicly-held developer, producer and marketer of manufacturing design  software
and support services; CVSI, Inc. ("CVSI"), a privately-held provider of computer
hardware  and  software  integration services, which  was  formerly  a  unit  of
Computervision; and Seaman Furniture Company, Inc. ("Seamans"), a  publicly-held
New  York based furniture retailer.  Such Portfolio Investments are held jointly
with  the  Investment  Adviser and its other affiliates.   In  addition  to  the
foregoing,  the  Company  has also invested, subject to applicable  restrictions
under  the  1940  Act,  in Other Investments of equity and  debt  securities  of
various companies.


<PAGE>


      On  November  25,  1996, the Company's Board of Directors  authorized  the
implementation of an open market share repurchase program, pursuant to which the
Company, from time to time, may purchase up to an aggregate of 175,000 shares of
its  Common  Stock in open market transactions.  As of December  17,  1997,  the
Company had repurchased 15,750 shares pursuant to this program.

      The  Company was incorporated in Delaware on June 19, 1992.  The Company's
executive  offices are located at 1185 Avenue of the Americas, 18th  Floor,  New
York, New York 10036 and its telephone number is (212) 730-2000.

Investment Objectives and Policies

      The  Company,  together with co-investors (as described  below)  generally
seeks  to acquire a controlling (25% or greater) equity interest (either  common
or  preferred stock) in a Reorganized Company by investing directly in a company
either by acquiring common or preferred stock from existing stockholders (in the
case  of a Reorganized Company which has completed a Restructuring) or debt from
existing  creditors  (in  the  case of a company which  is  in  the  process  of
undergoing  a  Restructuring) which it anticipates will  then  be  converted  to
common or preferred stock in the Restructuring.

     In selecting Portfolio Investments, the Company targets potential companies
that satisfy the following criteria, among others:

     v     $50 million in annualized revenues generated by a core business in an
          established market;
     
     v     operating profitability (earnings before interest and taxes) of the 
           core business or the potential to achieve operating profitability 
           within 12 months of the Restructuring;
     
     v     a credible Restructuring plan developed or capable of being 
           developed, which in the opinion of the Investment Adviser, will 
           result in the Company realizing positive cash flow within a 
           reasonable period of time following the implementation thereof;
     
     v     competent operating management in place or to be retained in 
           connection with the Restructuring;
     
     v     ability of the Company to obtain a controlling position in the equity
          securities of a portfolio company at a discount from market value for
          comparable companies which are not financially troubled; and
     
     v     potential to develop a liquid market for the securities held by the
           Company in the Reorganized Company within 12 months of the 
           Restructuring.
     
      The Company's investment objectives (other than its election to be treated
as  a  BDC)  may  be changed by the Board of Directors without the  approval  of
holders  of a majority of the Company's outstanding voting securities as defined
in  the 1940 Act.  The withdrawal of the Company's election to be treated  as  a
BDC would require such stockholder approval.


<PAGE>


      The  Company believes that because of the proliferation of leveraged  buy-
outs  in  the 1980's, the economic recession of the early 1990's and the  record
levels of high-yield debt issuances during the past several years, there  are  a
large number of companies that have undergone, are undergoing or will undergo  a
Restructuring  over  the  next several years in order to  remain  viable.   Such
companies  typically  undertake Restructurings because of high  levels  of  debt
and/or  problems with operating management.  Additional capital may be  required
by a Reorganized Company to effect a Restructuring or finance post-Restructuring
operations.  Further, a Reorganized Company may require managerial assistance in
certain   instances  to  negotiate  the  terms  of  a  proposed   Restructuring,
renegotiate   the  terms  of  a  completed  Restructuring  where  debt   service
requirements  continue  to  adversely  affect  operating  results,  retain   new
operating   management   and/or  favorably  renegotiate   existing   contractual
commitments.   In a Restructuring, creditors are often issued equity  securities
in  a  Reorganized Company (generally common or preferred stock) for which there
may  be  no  or only a limited market.  Certain creditors, in particular  senior
lenders,  may not desire to or may be restricted in their ability to  hold  such
equity securities for extended periods of time.

      The  Company  believes  that  it will be able  to  invest  in  Reorganized
Companies at discounts from market values for comparable companies which are not
financially  troubled,  because  it  may be  offering  necessary  capital  to  a
Reorganized Company in the case of a direct investment and liquidity to  holders
of  equity,  bank  debt, debt securities and/or trade credits in  a  Reorganized
Company  in  the case of a purchase from such parties.  Although the Company  is
focusing  its  efforts  on Reorganized Companies which  have  completed  or  are
undergoing  a  Restructuring,  the Company may seek  to  invest  in  financially
troubled  companies which intend to undergo a Restructuring and where a credible
plan  to  effect such Restructuring has been, or in the opinion of the  Company,
can  be developed.  The Company only invests in transactions recommended by  the
Investment Adviser.

      Up  to  30%  of  the  Company's total assets  may  be  invested  in  Other
Investments  including securities of Reorganized Companies or other  financially
distressed  companies,  where  the  Company's  objective  is  not  to  obtain  a
controlling interest, but rather where it believes capital appreciation  can  be
achieved  by engaging in portfolio trading.  Income or realized gains from  this
portion  of  the Company's portfolio will be used in part to pay  the  Company's
operating  expenses, including legal and auditing fees, taxes and  fees  to  the
Investment Adviser.

      Given  the  amount of its capital resources (including that which  may  be
available from co-investors as described below), the Company estimates  that  it
will  be  able to make Portfolio Investments in between one and four Reorganized
Companies  at  any  one  time and therefore will most  likely  not  be  able  to
diversify  its  portfolio.  However, in order to provide as much diversification
as  possible,  the Company will likely make its investments jointly  with  other
investors including affiliates of the Investment Adviser.  Any investments  with
affiliates of the Company will be subject to restrictions under the 1940 Act and
conditions set forth in an exemptive order granted by the SEC.


<PAGE>


      Following  an  initial  investment, the Company anticipates  that  it  may
provide additional funds to a portfolio company.  Follow-on investments  may  be
made  pursuant to rights to acquire additional securities or otherwise in  order
to  increase  the  Company's  position in a successful  or  promising  portfolio
company.   The Company may also be called upon to provide follow-on  investments
for  a  number  of other reasons, including providing additional  capital  to  a
company to implement fully its business plans, to develop a new line of business
or to recover from subsequent unexpected business problems.  The Company may use
leverage  (i.e., borrowed funds or senior securities) to raise all or a  portion
of  the  funds  required  to  make  follow-on investments,  subject  to  certain
restrictions.  The Company may also borrow to fund general working capital needs
including  paying operating expenses.  In addition, the Company  may  issue  its
securities  to  purchase  the  assets of or a controlling  interest  in  another
company or companies.

Present Portfolio Investments

     Computervision.  The Company and certain other affiliates of the Investment
Adviser  own  approximately 17 % of the issued and outstanding Common  Stock  of
Computervision  (approximately 1% of which is owned by the Company).   James  B.
Rubin, an executive officer and director of the Company, serves as a director of
Computervision.

     Computervision develops, produces and markets software and provides support
services  that  are designed to aid manufacturing companies in  enhancing  their
product  development  and  manufacturing  process.   Computervision's  principal
products  include  design  automation  and  product  data  management  software.
Manufacturers use Computervision's software to design, enhance and modify  their
products  and  to  access, share and manage their product data  collaboratively.
Computervision's  support  services  include  implementation,   consulting   and
training  services designed to assist customers in re-engineering their  product
development  processes and in increasing productivity.  During 1994,  1995,  and
1996,   international  sales  including  U.  S.  export  sales,  accounted   for
approximately 69%, 73% and 73% of total revenue, respectively.

       The   software  markets  in  which  Computervision  operates  are  highly
competitive  and  characterized  by rapid advances  in  technology.  To  compete
successfully, Computervision must continue to enhance its current  products  and
services  and  develop  new  products and  services  which  can  be  offered  at
competitive prices and on a timely basis.

      For  the fiscal year ended December 31, 1996 total revenues decreased 5.9%
to  $477.2  million from $507.1 million for the fiscal year ended  December  31,
1996.   However,  software product revenue grew 17% over the prior  fiscal  year
which  enabled the Company to offset much of the decline in its service revenues
increasing  net  income  to $39 million or $.60 per share  in  1996  versus  $30
million of net income or $.58 per share in 1995.

      In  November  1997,  Computervision agreed to be  acquired  by  Parametric
Technology Corporation ("Parametric"), a publicly-held competitor, in  a  stock-
for-stock  transaction  pursuant to which each share  of  Computervision  common
stock will be exchanged for .0866 shares of Parametric common stock.  Closing of
the  transaction, which is expected to occur in January 1998, is subject to  the
satisfaction  of  certain  conditions, including  approval  by  Computervision's
shareholders and receipt of regulatory approvals.

      The  foregoing information with respect to Computervision has been derived
from Computervision's filings with the SEC.


<PAGE>


      CVSI.  In July 1997, the Investment Adviser and certain of its affiliates,
including the Company (collectively, the "Buyer"), purchased a majority interest
(the "OSS Acquisition") in the Open Service Solutions business unit ("CVSI")  of
Computervision, through CVSI Acquisition Co., L.L.C.  CVSI provides services  to
both  Computervision's  software customers and to customers  of  selected  third
party  hardware and software vendors.  CVSI's offerings include system  hardware
and  operating  systems  services, network design  and  implementation,  systems
integration, and database support and consulting for enterprise-wide systems and
networks.   CVSI is a worldwide support organization that is ISO 9000 certified.
James  B.  Rubin,  an executive officer and director of the Company,  serves  as
Chairman and a director of CVSI.

     The markets in which CVSI operates are highly competitive and characterized
by rapid advances in technology.  To compete successfully, CVSI must continue to
enhance  its current products and services and develop new products and services
which can be offered at competitive prices and on a timely basis.

      In  the OSS Acquisition, the Buyer paid $7.6 million to Computervision for
76%  of  CVSI's  Class A Voting Stock (the "Class A Stock").  In addition,  CVSI
paid  Computervision  $25.0 million in cash and issued  Computervision  a  $10.0
million  subordinated  note (the "Subordinated Note").  Further,  Computervision
retained 24% of CVSI's Class A Stock and 100% of CVSI's Class B Non-Voting Stock
(the  "Class B Stock").  The Buyer also has options to purchase (i) the Class  A
Stock  held  by  Computervision should the Buyer retire  the  Subordinated  Note
within one year of the transaction and (ii) the Class B Stock for $15.0 million.
Moreover, if CVSI does not achieve certain specified levels of product  revenues
and  operating margins from Computervision-initiated referrals, CVSI  will  have
the  option  to purchase, at a nominal price, some or all of the Class  A  Stock
held  by  Computervision.   In  connection with  the  acquisition,  the  Company
received $89,535 of investment banking fees and $35,814 of consulting fees.

      As  a  stand alone operation, CVSI would have reported $174.4  million  in
total revenues for the fiscal year ended December 31, 1996, down 18% from $212.7
for the fiscal year ended December 31, 1995.  Net income also declined in fiscal
year 1996 to $15.5 million down from $36.7 million in 1995.

      The  foregoing  information with respect to CVSI  has  been  derived  from
Computervision's  filings with the SEC and information  otherwise  furnished  by
CVSI.

      Seamans.   The  Company  and certain other affiliates  of  the  Investment
Adviser  own  approximately 38% of the issued and outstanding  Common  Stock  of
Seamans (approximately 3.3% of which is owned by the Company).  James B.  Rubin,
an  executive  officer  and director of the Company, serves  as  a  director  of
Seamans.

     Seamans believes that it is one of the largest regional specialty furniture
retailers  in the northeastern United States in terms of sales and that  it  has
the  leading market position in the greater New York metropolitan area.  Seamans
currently operates a chain of 41 stores.  Of these, 27 are in the New York,  New
Jersey  and  Connecticut tri-state area, eight are in Philadelphia  metropolitan
area  and six are in the Cleveland/Akron, Ohio Metropolitan area.  The Company's
stores  sell  a  variety of living room, bedroom, dining  room  and  other  home
furniture  and  accessories  in contemporary, traditional,  country  and  casual
styles.  All aspects of Seamans' business are highly competitive.

      For the fiscal year ended April 30, 1997 revenues increased 8.4% to $264.0
million  from  $243.5  million  for  the  fiscal  year  ended  April  30,  1996.
Comparable  store sales increased 1.8% from the prior fiscal year.   Net  income
for  the  fiscal  year ended April 30, 1997 was $4.1 million or $.82  per  share
compared to $3.9 million or $.78 per share.

      In  August 1997, Seamans entered into an Agreement and Plan of Merger,  as
amended  on  September 4, 1997 (the "Merger Agreement") with SFC Merger  Company
("Newco"),  a  Delaware corporation formed and wholly owned  by  the  Investment
Adviser and its affiliates (including the Company), T. Rowe Price Recovery Fund,
L.P.  ("Price")  and Carl Marks Management Co., L.P. ("Marks," and  collectively
with the Investment Adviser and Price, the "Funds"), pursuant to which the Funds
will acquire through a merger (the "Merger") all of the outstanding common stock
of  Seamans  not  already  owned  by  the  Funds  (the  "Public  Stock").   Upon
consummation of the Merger, Newco will be merged with and into Seamans and  each
share of Public Stock (other than dissenting shares) will be converted into  the
right  to receive $25.05 in cash and each existing Seamans stock option will  be
converted  into  the  right  to receive $25.05 in  cash  per  share  purchasable
thereunder,  less  the exercise price with respect thereto, other  than  certain
options  of  officers  of the Company which will be cancelled  and  reissued  as
options  of  equivalent or greater value following the Merger.  Consummation  of
the  Merger  is subject to the approval of Seamans' stockholders  at  a  meeting
scheduled for December 23, 1997, and the satisfaction or waiver of certain other
conditions.


<PAGE>


      Following  consummation  of the Merger, the Funds  will  own  all  of  the
outstanding shares of Seamans Common Stock of which approximately 47.5% will  be
owned  by  the  Investment Adviser and its affiliates,  including  4.1%  by  the
Company.  In addition, 19.3% of Seamans Common Stock, on a fully diluted  basis,
will  be reserved for issuance to certain officers and employees of Seamans upon
the exercise of options.  Following the Merger, it is anticipated that the Funds
will  receive a dividend of approximately $67.0 million on the shares of Seamans
held  by  them,  approximately $2.74 million of which will be  received  by  the
Company.

      The  foregoing information with respect to Seamans has been  derived  from
Seamans' filings with the SEC.

      For  further  information  concerning the Company's  Portfolio  and  Other
Investments, including purchase prices and valuation at September 30, 1997,  see
the Financial Statements including the Notes thereto set forth in Item 8 of this
Report.

Regulation

      The following is a summary description of the 1940 Act as modified by  the
Incentive Act as applied to BDCs.  The Company elected to be treated as a BDC on
August  3,  1992.   The  Company may not withdraw  its  election  without  first
obtaining the approval of a majority of its outstanding voting securities.

      Generally, to be eligible to elect BDC status, a company must be primarily
engaged  in  the  business  of furnishing capital and  managerial  expertise  to
companies  which  do  not  have  ready access to  capital  through  conventional
financial  channels  and/or  are in financial difficulty,  which  companies  are
termed "portfolio companies."  More specifically, in order to qualify as a  BDC,
a  company must (i) be a domestic company; (ii) have registered a class  of  its
equity  securities or have filed a registration statement with the SEC  pursuant
to  Section 12 of the Securities Exchange Act; (iii) operate for the purpose  of
investing  in  the  securities of certain types of portfolio companies,  namely,
immature or emerging companies and businesses suffering or just recovering  from
financial  distress;  (iv) extend significant managerial assistance  to  certain
portfolio  companies;  (v)  have  a majority of  "disinterested"  directors  (as
defined in the 1940 Act); and (vi) file (or, under certain circumstances, intend
to file) a proper notice of election with the SEC.


<PAGE>


      An eligible portfolio company generally is a United States company that is
not  an  investment  company and that (i) does not have a  class  of  securities
registered  on an exchange or included in the Federal Reserve Board's  over-the-
counter  margin list; (ii) has total assets of $4.0 million or less and  capital
and  surplus  of  more  than $2.0 million (with respect  to  which  category  of
portfolio  company no managerial assistance need be offered); (iii) is  actively
controlled by a BDC and has an affiliate of a BDC on its board of directors;  or
(iv)  meets such other criteria as may be established by the SEC.  Control under
the 1940 Act is presumed to exist where a BDC owns 25% of the outstanding voting
securities of the portfolio company.

      The  1940 Act prohibits or restricts the Company from investing in certain
types  of  companies, including brokerage firms, insurance companies, investment
banking   firms  and  investment  companies.   Moreover,  while  the  1940   Act
contemplates  that a BDC will invest in concerns other than "eligible  portfolio
companies,"  the  type  of assets that the Company may  acquire  is  limited  to
"qualifying  assets"  and certain assets necessary for its operations  (such  as
office  furniture, equipment and facilities) if, at the time of the acquisition,
less  than  70%  of  the  value of the Company's assets consists  of  qualifying
assets.   Qualifying  assets include:  (1) securities  of  companies  that  were
eligible  portfolio companies at the time the Company acquired their securities;
(2) certain securities of bankrupt or insolvent companies that are not otherwise
eligible  portfolio companies; (3) securities acquired as follow-on  investments
in companies that were eligible portfolio companies at the time of the Company's
initial  acquisition  of their securities but are no longer  eligible,  provided
that  the Company has maintained a substantial portion of its initial investment
in those companies; (4) securities received in exchange for or distributed on or
with  respect to any of the foregoing; and (5) cash items, government securities
and  high-quality short-term debt.  The 1940 Act also places restrictions on the
nature of the transactions in which, and the person from whom, securities can be
purchased in order for the securities to be considered qualifying assets.   Such
restrictions include limiting purchases to transactions not involving  a  public
offering  and  acquiring securities from either the portfolio company  or  their
officers, directors or affiliates.

      The  Company is permitted by the 1940 Act, under specified conditions,  to
issue  multiple  classes of senior debt, a single class of preferred  stock  and
other  senior  securities.  The Company currently has no  policy  regarding  the
issuance of senior securities.

     The Company may sell its securities at a price that is below the prevailing
net asset value per share only upon the approval by the holders of a majority of
its   outstanding  voting  securities,  including  a  majority,  of  the  voting
securities held by non-affiliated persons.  As defined in the 1940 Act, the term
majority  of  the  Company's outstanding voting securities  means  the  vote  of
(i)  67%  or  more  of the Company's Common Stock present at a meeting,  if  the
holders  of  more  than  50%  of the outstanding Common  Stock  are  present  or
represented by proxy, or (ii) more than 50% of the Company's outstanding  Common
Stock, whichever is less.

      Most of the transactions involving the Company and its affiliates (as well
as  affiliates  of  those affiliates) which were prohibited  without  the  prior
approval  of the SEC under the 1940 Act prior to its amendment by the  Incentive
Act  now  require the prior approval of a majority of the Company's  independent
directors  and a majority of the directors having no financial interest  in  the
transactions.    However,   certain  transactions  involving   certain   closely
affiliated  persons  of  the  Company, including  its  directors,  officers  and
employees, may still require the prior approval of the SEC.  In general, (i) any
person  who  owns, controls or holds with power to vote, more  than  5%  of  the
Company's  outstanding  Common  Stock; (ii) any  director,  officer  or  general
partner  of  that  person;  and  (iii) any person  who  directly  or  indirectly
controls,  is controlled by, or is under common control with, that person,  must
obtain  the prior approval of a majority of the Company's independent  directors
and,  in  some  situations, the prior approval of the SEC,  before  engaging  in
certain  transactions  involving the Company or any company  controlled  by  the
Company.   The  SEC  has  granted an exemptive order which  sets  forth  certain
conditions  for  co-investments with affiliates of the Company.   In  accordance
with the 1940 Act, a majority of the members of the Company's Board of Directors
are  independent.  The 1940 Act generally does not restrict transactions between
the Company and portfolio companies in which the Company invest.


<PAGE>


     The Company may seek to maximize stockholder value by dissolving or merging
with  another corporation (including a company in which it has made a  Portfolio
Investment) and withdraw its election to be treated as a BDC.  While a  BDC  may
change  the nature of its business so as to cease being a BDC (and in connection
therewith withdraw its election to be treated as a BDC) only if authorized to do
so  by a majority of its outstanding voting securities, stockholder approval  of
changes  in  other fundamental investment policies of a BDC is not required  (in
contrast  to  the  general 1940 Act requirement of stockholder  approval  for  a
change  in any fundamental investment policy).  Other than its status as  a  BDC
and  its  primary  investment  objective, none of the  Company's  objectives  or
policies are deemed fundamental.

Competition

     Given the size of the Company's assets, the Company's portfolio will likely
not be diversified and the Company will not be able to achieve the same level of
diversification  as  much  larger entities engaged in similar  activities.   The
Company expects to encounter substantial competition for investments from  other
investors,  including  entities having similar investment objectives,  including
other  business development companies, investment or so-called "vulture"  funds,
investment  affiliates  of  large  industrial  and  financial  companies,  small
business  investment companies and wealthy individuals.  Many of these investors
will  have  greater experience, financial resources and managerial  capabilities
than the Company and therefore will be in a better position than the Company  to
obtain access to attractive investments.

Employees

      The  Company has no employees other than its officers and, because of  the
Financial  Advisory Agreement with the Investment Adviser, is  not  expected  to
have any additional employees.


ITEM 2.             PROPERTIES

      The  Company presently occupies office space in facilities located at 1185
Avenue of the Americas, New York, New York, which space is also occupied by  the
Investment Adviser.  The cost of all necessary office space is included  in  the
fees  to  be  paid by the Company to the Investment Adviser under the  Financial
Advisory Agreement between the Company and the Investment Adviser.


ITEM 3.             LEGAL PROCEEDINGS

     None.


ITEM 4.             SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.



<PAGE>


                                     PART II

ITEM 5.             MARKET FOR REGISTRANT'S COMMON EQUITY AND
               RELATED STOCKHOLDER MATTERS

     (a)  Market Information

      The  Company's Common Stock is listed on the Nasdaq Small Cap Market under
the symbol CREN.  The following table sets forth, for the periods indicated, the
range  of  high  and low prices for the Common Stock as reported by  the  Nasdaq
Stock  Market, Inc.  These quotations represent prices between dealers,  do  not
include  retail  markups,  markdowns  or  commissions  and  do  not  necessarily
represent actual transactions:

<TABLE>

                                                      Common Stock
                                                   High            Low

<S>                                              <C>             <C>

Calendar 1994
Fourth Quarter (commencing October 25, 1994)     $10-1/4         $9-3/4

Calendar 1995
First Quarter                                    11              9-1/2
Second Quarter                                   11-1/8          8-5/8
Third Quarter                                    11              8-1/4
Fourth Quarter                                   10              9


Calendar 1996
First Quarter                                    10-1/8          8-5/8
Second Quarter                                   9               8-1/8
Third Quarter                                    8-3/8           7-1/4
Fourth Quarter                                   8-3/8           7-5/8


Calendar 1997
First Quarter                                    8               6-1/2
Second Quarter                                   6-1/4           4-1/2
Third Quarter                                    6               5

</TABLE>

     (b)  Holders

      At December 17, 1997, there were approximately 12 holders of record of the
Company's Common Stock.  The Company believes the number of beneficial owners of
its Common Stock is in excess of 300.


<PAGE>


     (c)  Dividends

      The  Company has not paid any cash dividends since its inception  and  the
Board  of  Directors  does not contemplate doing so in  the  near  future.   Any
decision  as  to  future payment of dividends will depend on  the  earnings  and
financial  position  of  the Company and such other  factors  as  the  Board  of
Directors deems relevant.


ITEM 6.             SELECTED FINANCIAL DATA
<TABLE>
                                                                    Period From
                                                                    11/1/94 (Commencement of
                                       Year Ended or Year Ended or  Operations) to or
                                          At 9/30/97    at 9/30/96  at 9/30/95
<S>                                    <C>          <C>             <C>

Operating Data:
Net operating loss before
     security transactions               $(164,095)   $(471,831)      $(821,159)
Net realized gains/(losses)
     from portfolio investments                 --- $(1,123,937)      $2,593,738
Net realized gains/(losses)
     from other investments                $248,345   $(101,045)      $238,526
Change in net unrealized
     appreciation/(depreciation)
     from portfolio investments        $(3,079,438)   $(127,394)      $127,394
Change in net unrealized
     appreciation/(depreciation)
     from other investments                $772,344 $(1,817,064)    $4,351,827
Income tax benefit/(expense)
     arising from net realized
     gains and net unrealized
     appreciation in investments           $660,069   $1,065,538  $(2,502,545)
Net increase/(decrease) in net
     assets resulting from operations  $(1,562,775) $(2,575,733)    $3,987,781

Per Share Amounts:
Net Asset Value, beginning
     of period                              $9.66        $12.36         $10.00
Common Stock offering
     costs of initial public offering       ---          ---            (1.81)
Net operating loss before
     security transactions                  (.17)        (.50)          (.86)
Net realized gains/(losses)
     from sales of investments              .17          (.85)          1.95
Change in net unrealized
     appreciation/(depreciation)
     of investments held                    (1.66)       (1.35)         3.08
Net gain on treasury stock transactions     .03          ---            ---
Net Asset Value, end of period              $8.03        $9.66          $12.36

Balance Sheet Data:
Total Assets                               $7,604,762   $10,079,562  $14,542,064
Net Assets                                  $7,548,957   $9,236,869  $11,812,602

Total Return Based on:
Stock Price                                 (29.69%)     (16.88%)       (3.75%)
Net Asset Value                             (16.87%)     (21.85%)       23.60%

</TABLE>
<PAGE>


ITEM 7.             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

      Prior to November 1, 1994, the Company had only nominal assets and focused
its  efforts on raising capital in the IPO and Overseas Placement.  On  November
1,  1994,  the Company consummated the IPO, in which it sold 600,000  shares  of
Common  Stock  at  a price of $10.00 per share, and the Overseas  Placement,  in
which  it  sold 356,000 shares of Common Stock at a price of $10.00  per  share.
Proceeds  from  the  IPO  and the Overseas Placement  were  $7,823,821,  net  of
underwriting  discounts,  the underwriters' non-accountable  expense  allowance,
placement fees and other expenses associated with the offerings.  The Company is
deemed to have commenced operations on November 1, 1994.

      The Company's primary source of working capital is proceeds generated from
investment  activities.  At September 30, 1997, the Company had  cash  and  cash
equivalents  of  $950,692 as compared to $509,257 at September  30,  1996.   The
increase in cash and cash equivalents was a result of the liquidation of certain
investments during the period.

Results of Operations

     Year ended September 30, 1997 ("fiscal 1997") as compared to the Year ended
     September 30, 1996 ("fiscal 1996")

      During fiscal 1997, the Company had interest income of $30,317 as compared
to  interest income of $28,901 in fiscal 1996.  Operating expenses during fiscal
1997  were  $379,456 as compared to $739,695 in fiscal 1996.  This  decrease  is
attributable  in  large  part  to  $224,128 in incentive  fees  payable  to  the
Investment  Adviser accrued during fiscal 1996 as compared to $0 in fiscal  1997
and  a decrease in fees payable pursuant to an investment banking agreement from
$100,000  in  the fiscal 1996 period to $8,333 in fiscal 1997.  For fiscal  1997
the  Company  had a pre-tax operating loss and a net operating loss of  $253,635
and $164,095, respectively, as compared to a pre-tax loss and net operating loss
for  fiscal  1996  of $710,794 and $471,831, respectively.   Since  the  Company
typically  does  not  purchase  securities  with  the  objective  of  generating
investment income, net operating losses are expected to routinely occur.

      During  fiscal  1997,  the Company had net realized  gains  from  sale  of
investments  of  $248,345  as  opposed to  net  realized  losses  from  sale  of
investments of $1,224,982 during fiscal 1996.  For fiscal 1997, the Company  had
net  unrealized  depreciation of investments of $2,307,094, as compared  to  net
unrealized depreciation of investments of $1,944,458 in fiscal 1996.  For fiscal
1997,  the  Company  had net realized and unrealized losses  on  investments  of
$1,398,680, as compared to net realized and unrealized losses on investments  of
$2,103,902  for fiscal 1996 and after giving effect to net operating  losses,  a
decrease  in net assets resulting from operations of $1,562,775 in fiscal  1997,
as  compared to a decrease in net assets resulting from operations of $2,575,733
in fiscal 1996.


<PAGE>

     
     Fiscal  1996  as compared to period from November 1, 1994 (commencement  of
     operations) to September 30, 1995 ("fiscal 1995")

      During fiscal 1996, the Company had interest income of $28,901 as compared
to  interest income of $244,846 in fiscal 1995.  The decline in interest  income
reflects the increased percentage of the Company's assets invested in other than
cash  or  cash equivalents.  Operating expenses during fiscal 1996 were $739,695
as  compared  to  $1,492,820 in fiscal 1995.  This decrease is  attributable  in
large  part  to  $996,947  in incentive fees payable to the  Investment  Adviser
accrued  during fiscal 1995 as compared to $224,128 in fiscal 1996.  For  fiscal
1996  the  Company  had  a pre-tax operating loss and a net  operating  loss  of
$710,794  and  $471,831, respectively, as compared to a  pre-tax  loss  and  net
operating loss for fiscal 1995 of $1,247,974 and $821,159, respectively.   Since
the  Company  typically  does  not purchase securities  with  the  objective  of
generating  investment  income, net operating losses are expected  to  routinely
occur.

      During  fiscal  1996, the Company had net realized  losses  from  sale  of
investments  of  $1,224,982  as  opposed to net  realized  gains  from  sale  of
investments of $2,832,264 during fiscal 1995.  For fiscal 1996, the Company  had
net  unrealized  depreciation of investments of $1,944,458, as compared  to  net
unrealized  appreciation of investments of $4,479,221 in  fiscal  1995.   During
fiscal  1995,  the  Company  recorded  a gain  on  the  sale  of  one  Portfolio
Investment.  During fiscal 1996, the Company realized losses on the  sale  of  a
second  Portfolio  Investment and a decline in valuation of another  investment.
For  fiscal  1996,  the  Company  had  net realized  and  unrealized  losses  on
investments of $2,103,902, as compared to net realized and unrealized  gains  on
investments  of  $4,808,940  for fiscal 1995 and  after  giving  effect  to  net
operating  losses,  a  decrease  in  net assets  resulting  from  operations  of
$2,575,733 in fiscal 1996, as compared to a net increase in net assets resulting
from operations of $3,987,781 in fiscal 1995.

Net Asset Value

     At September 30, 1997, the Company had a net asset value of $8.03 per share
of Common Stock, a decrease of $1.63 per share from the net asset value of $9.66
per share of Common Stock at September 30, 1996.


<PAGE>



ITEM 8.             FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                        CORPORATE RENAISSANCE GROUP, INC.
                                        
                                      INDEX


                                                            Page


Independent Auditor's Report

Statements of Assets and Liabilities
s of September 30, 1997 and September 30, 1996

Statements of Operations as of September 30, 1997,
September 30, 1996 and the period from November 1, 1994
(Commencement of Operations) to September 30, 1995

Statements of Changes in Net Assets for the Years
ended September 30, 1997, September 30, 1996 and
September 30, 1995

Statements of Cash Flows for the Years ended
September 30, 1997, September 30, 1996
and September 30, 1995

Schedule of Investments as of September 30, 1997

Notes to Financial Statements


<PAGE>

Report of Independent Auditors

Board of Directors
Corporate Renaissance Group, Inc.


We have audited the accompanying statements of assets and liabilities of 
Corporate Renaissance Group, Inc., as of September 30, 1997 and 1996, 
including the schedule of investments as of September 30, 1997, and the related
statement of operations for the years ended September 30, 1997 and 1996
and the period from November 1, 1994 (commencement of operations) to
September 30, 1995, and the statements of changes in net assets and cash
flows for the year ended September 30, 1997, the year ended September 30, 1996,
and the period ended September 30, 1995.  These financial statements are the 
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.
Our audit procedures included confirmation of securities owned at September 
30, 1997 by correspondence with the custodian; where confirmation was not 
possible, we satisfied ourselves by other audit procedures.  An audit also 
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement 
presentation.  We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Corporate Renaissance
Group, Inc. at September 30, 1997 and 1996, and the results of its operations
for the years ended September 30, 1997 and 1996, and the period from
November 1, 1994 (commencement of operations) to September 30, 1995,
and changes in net assets and cash flows for the years ended September 30,
1997, September 30, 1996, and the period ended September 30, 1995 in 
conformity with generally accepted accounting principles.

ERNST & YOUNG LLP
December 5, 1997


<PAGE>

                        CORPORATE RENAISSANCE GROUP, INC.
                      STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>

ASSETS                                       SEPTEMBER 30, 1997   SEPTEMBER 30, 1996

<S>                                                  <C>           <C>

Investments in securities, at market value
(cost $6,411,446 and $6,663,601 respectively)        $6,639,114    $9,217,962
Cash and cash equivalents                             950,692       509,257
Income taxes receivable                                 9,755       345,511
Accrued interest receivable                             1,204           585
Other assets                                            3,997         6,247
TOTAL ASSETS                                         7,604,762     10,079,562

LIABILITIES

Call options written, at market value
(premiums received $41,827 at September 30, 1996)           -        61,425
Deferred fees                                          29,845             -
Accounts payable and accrued expenses                  25,960        31,659
Deferred taxes payable                                      -       749,609
TOTAL LIABILITIES                                      55,805       842,693
NET ASSETS                                           $7,548,957    $9,236,869

NET ASSETS

Common stock (par value $.01
per share, 20,000,000 shares authorized;
940,350 and 956,100 shares issued and
outstanding, respectively)                           $  9,404      $  9,561

Additional paid-in capital                           7,690,280     7,815,260
Accumulated income (loss):
Accumulated net operating loss
before security transactions                         (1,457,085)   (1,292,990)
Accumulated net realized gains
from sale of investments                             1,210,438     1,049,765
Net unrealized appreciation of investments             95,920      1,655,273
                                                     (150,727)     1,412,048
Net Assets                                           $7,548,957    $9,236,869

Net asset value per share of
common stock outstanding                             $   8.03      $   9.66

</TABLE>
                        See notes to financial statements


<PAGE>


                        CORPORATE RENAISSANCE GROUP, INC.
                                        
                            STATEMENTS OF OPERATIONS

<TABLE>

                                                                    For the Period
                                                                    from 11/1/94
                                       For the year   For the year  (commencement
                                           Ended       ended        of operations)
                                           9/30/97     9/30/96        To 9/30/95
<S>                                    <C>             <C>           <C>

Income:
Fee Income                                  $95,504    $      -      $      -
Interest Income                              30,317      28,901       244,846
Total investment income                     125,821      28,901       244,846

Expenses:
Incentive fees                                    -     224,128       996,947
Financial advisory fees                     200,000     200,000       183,333
Investment banking fees                       8,333     100,000        91,667
Professional fees                            49,200      59,800        84,861
Insurance expense                            49,250      74,247        70,547
Board of directors fees                      50,000      50,000        45,833
Other operating expenses                     22,673      31,520        19,632
Total expenses                              379,456     739,695      1,492,820

Operating loss before income tax benefit    (253,635)  (710,794)     (1,247,974)
Income tax benefit                           89,540     238,963       426,815

NET OPERATING LOSS BEFORE
SECURITY TRANSACTIONS                       (164,095)  (471,831)     (821,159)

NET REALIZED AND UNREALIZED
GAINS/(LOSSES) FROM INVESTMENTS:
Net realized gains/(losses)
from sale of investments                    248,345    (1,224,982)   2,832,264
Change in net unrealized appreciation/
(depreciation) of investments             (2,307,094)  (1,944,458)   4,479,221
Income tax (expense)/benefit arising
from net realized gains/(losses) and net
unrealized appreciation/(depreciation)
of investments.                             660,069       1,065,538    (2,502,545)

Net realized and unrealized (losses)
on investments                          (1,398,680)      (2,103,902)    4,808,940

NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS       $(1,562,775)     $(2,575,733)    $3,987,781

Per share net increase/(decrease) in
 net assets resulting from operations       $(1.63)          $(2.70)   $4.17

</TABLE>
                        See notes to financial statements


<PAGE>


                        CORPORATE RENAISSANCE GROUP, INC.
                       STATEMENTS OF CHANGES IN NET ASSETS


<TABLE>
                                                                    Period from 11/1/94
                                                                    (commencement of
                                           Year Ended   Year Ended  operations) to
                                           9/30/97      9/30/96     9/30/95
<S>                                        <C>          <C>         <C>

CHANGES IN NET ASSETS FROM OPERATIONS:
Net operating loss before security
transactions                               $(164,095)   $(471,831)  $(821,159)
Net realized gains/(losses) from sale of
investments                                 160,673     (813,154)   1,862,919
Change in net unrealized appreciation/
(depreciation) of investments              (1,559,353)  (1,290,748) 2,946,021
Net increase/(decrease) in net assets
resulting from operations                  (1,562,775)  (2,575,733) 3,987,781

CAPITAL STOCK TRANSACTIONS:
Net proceeds from issuance of 
capital stock                                  -           -        7,823,821
Net (decrease) in net assets
resulting from treasury stock purchases     (125,137)          -         -
Net increase/(decrease) in net assets
resulting from capital stock transactions  (125,137)          -     7,823,821

NET INCREASE/(DECREASE) IN
NET ASSETS                                 (1,687,912)  2,575,733   11,811,602

NET ASSETS
Beginning of period                        9,236,869    11,812,602  1,000
End of period                              $7,548,957   $9,236,869  $11,812,602
                                                                                
</TABLE>
                                                                                
                                                                                
                                                                                
                                                                                
                        See notes to financial statements


<PAGE>

                                        
                        CORPORATE RENAISSANCE GROUP, INC.
                            STATEMENTS OF CASH FLOWS



<TABLE>

                                                                     Period from 11/1/94
                                                                     (commencement of
                                           Year Ended   Year Ended   operations) to
                                           9/30/97      9/30/96      9/30/95
<S>                                       <C>          <C>          <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase/(decrease) in net
assets resulting from operations           $(1,562,775) $(2,575,733) $3,987,781
Adjustments to reconcile net increase/
(decrease) in net assets resulting
from operations to net cash provided
by (used in) operating activities:


Change in net unrealized (appreciation)/
depreciation of investments                2,307,094    1,944,458    (4,479,221)
Realized (gains)/losses on sale 
of investments                            (248,345)    1,224,982    (2,832,264)
Deferred income tax (benefit ) provision   (749,609)    (783,591)    1,533,200
(Increase)/decrease in operating assets:
Income taxes receivable                      335,756    (345,511)           -
Accrued interest receivable                    (619)        2,315     (2,900)
Other assets                                   2,250          246     118,507
Increase (decrease) in operating liabilities:
Accrued incentive fee payable                           (996,947)     996,947
Accounts payable and accrued expenses        (5,699)      (2,523)    (90,818)
Deferred liability                            29,845            -           -
Income taxes payable                               -    (132,008)     132,008
Net cash flows provided by (used in)
operating activities                         107,898    (1,664,312)  (636,760)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of securities                     (695,298)    (3,025,360)  (11,263,
743)
Proceeds from sale of securities           1,153,972    3,026,288    6,146,546
Proceeds from securities sold short,
not yet purchased                                  -       78,778      22,999
Net cash flows provided by (used in)
 investing activities                        458,674       79,706    (5,094,198)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock                           -            -       9,560
Increase in additional paid-in capital             -            -    7,814,261
Purchase of treasury stock                 (125,137)            -           -
Net cash flows provided by
(used in) financing activities             (125,137)            -    7,823,821

Net increase/(decrease) in cash and
cash equivalents                             441,435    (1,584,606)  2,092,863

CASH AND CASH EQUIVALENTS,
at the beginning of the period               509,257    2,093,863       1,000
CASH AND CASH EQUIVALENTS, 
at the end of the period                    $950,692     $509,257    $2,093,863
SUPPLEMENTAL DISCLOSURE:
Income Taxes paid / (refunded)             $(335,756)   $ 366,409    $410,521
Interest Paid                              $       -    $  10,189    $      -

</TABLE>
                        See notes to financial statements
                                        

<PAGE>

                                        
                        CORPORATE RENAISSANCE GROUP, INC.
                                
                           SCHEDULE OF INVESTMENTS (1)
                                        
                               SEPTEMBER 30, 1997
                                        
<TABLE>
Shares or     Type of Issue and                Original      Market      % of Net
Face Value    Name of Issuer                   Cost          Value       Assets

<C>        <S>                               <C>            <C>          <C>

ASSETS
           Reorganized Companies
           Common Stock
607,400    Computervision Corporation New    $ 3,182,038    $2,239,788   29.7%
453,620    CVSI Acquisition Co., L.L.C. (2)      453,620       453,620    6.0%
148,824    Seaman Furniture Company, Inc.      2,676,691     3,618,283   47.9%
           Total Reorganized Companies         6,312,349     6,311,691



           Other Investments
           Common Stock
11,242     Tenet Healthcare Corp. (3)            99,097       327,423    4.3%
           Total Other Investments               99,097       327,423
Total Investments                            $6,411,446    $6,639,114
                                        
(1)  Notes to Schedule of Investments:
        The above investments are non-income producing.  Equity investments that
have  not paid dividends within the last twelve months are considered to be non-
income producing.  See Note 1.

(2)   Represents a beneficial interest in 453,620 shares of CVSI Inc., which  is
not considered to be a readily marketable security.

(3)   Effective January 30, 1997, OrNda Healthcorp merged with Tenet  Healthcare
Corp.,  in  which the Company received 1.35 shares of Tenet for  each  share  of
OrNda.


                        See Notes to Financial Statements

<PAGE>


                        CORPORATE RENAISSANCE GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997


1.   Organization and Operation of the Company

      Corporate  Renaissance Group, Inc. (the "Company") was incorporated  under
the  laws  of  the state of Delaware on June 19, 1992.  The Company  is  a  non-
diversified, closed-end investment company which has elected to be treated as  a
business  development company ("BDC") under the Investment Company Act of  1940,
as  amended  by  the Small Business Incentive Act of 1980.  The  Company  offers
investors  the opportunity to participate in investments in companies which  the
Company believes have viable existing businesses generating substantial revenues
in  established  markets, and have recently completed or are in the  process  of
undergoing  financial restructuring ("Reorganized Companies") and  where,  as  a
result, the Company can ultimately obtain an equity position at a discount  from
market  value  for comparable companies that are not financially troubled.   The
Company's investments are generally not expected to produce meaningful levels of
investment   income.   It  is  the  Company's  objective  to  select  investment
opportunities  which  the Company believes offer the potential  for  substantial
capital appreciation.

      The Company completed its initial public offering and commenced operations
on  November 1, 1994.  The Company consummated the initial public offering  (the
"Domestic  Offering")  and  an overseas offering (the "Overseas  Placement")  of
956,000  shares at $10.00 per share.  Pursuant to the Domestic Offering, 600,000
shares  were sold; 356,000 shares were sold in the Overseas Placement (including
45,000  shares  sold  to Union d'Etudes et d'Investissments  ("UI")).   The  net
proceeds  to  the  Company of both the Domestic Offering and Overseas  Placement
were  $7,823,821 after deducting all costs associated with the registration  and
offering, resulting in an initial net asset value per share of $8.18.

      On  November  25,  1996, the Company's Board of Directors  authorized  the
implementation of an open market share repurchase program, pursuant to which the
Company, from time to time, may purchase up to an aggregate of 175,000 shares of
its common stock in open market transactions.  The purpose of the program is  to
provide  stockholders  desiring  to  sell  their  shares  with  enhanced  market
liquidity.  At the same time, the Company believes that open-market purchases of
its shares at a discount from net asset value will enhance long-term shareholder
value.   As  of  September 30, 1997, 15,750 shares have been repurchased  at  an
average cost of $7.93 per share.

2.   Significant Accounting Policies

     a.   Valuation of Securities

      The  Company's  securities which are subject to  last-sale  reporting  are
valued by reference to the market price on a national securities exchange or  as
reported  on the National Association of Securities Dealers Automated  Quotation
("NASDAQ") System.  Other unlisted securities are valued at representative "bid"
quotations if held long by the Company and representative "asked" quotations  if
held  short by the Company.  The value of securities for which market quotations
are  not  readily available and securities as to which the Company believes  the
method  of  valuation set forth above does not fairly reflect market  value  are
determined  by one or more independent third parties selected by the  Investment
Advisor.

     b.   Recognition of Security Transactions and Related Investment Income

      Security transactions are recorded on the date the order to buy or sell is
executed  (the  trade date).  Dividend income is recognized on  the  ex-dividend
date  and  interest income is recognized on an accrual basis.  The net  realized
gains  and losses on sales of securities are determined on a first-in, first-out
or specific identification basis.


<PAGE>


     c.   Income Taxes

     The Company is not entitled to the special treatment available to regulated
investment companies and is taxed as a regular corporation for federal and state
income  tax  purposes.  The Company has accounted for income taxes in accordance
with  FASB Statement No. 109, "Accounting for Income Taxes."  The aggregate cost
of  securities  at  September  30,  1997 for federal  income  tax  purposes  and
financial reporting purposes was the same.

     d.   Cash and Cash Equivalents

      For the purpose of reporting cash flows, cash and cash equivalents consist
of cash and short-term interest-bearing deposits.

     e.   Use of Estimates

      The  preparation  of  financial statements in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the amounts reported in the financial  statements  and
accompanying notes.

3.   Income Taxes

     The components of income tax (benefit) on pre-tax loss of ($2,312,384) are
as follows:

     Federal:
     Deferred                       $(792,207)
                                    (792,207)
     
     State and Local:
     Deferred                        (23,402)
                                     (23,402)
     Allowance for deferred tax asset              66,000
     
                         Total      $(749,609)

      Deferred  income taxes arise from temporary differences  between  the  tax
basis  of  assets  and liabilities and their reported amounts in  the  financial
statements.   For  example, unrealized gains or losses on  investments  are  not
recognized  for  tax  purposes until realized and therefore create  a  temporary
difference.   The components of the Company's deferred income tax  liability  is
comprised of the following.

Deferred tax liability:
Net unrealized appreciation on investments  $     80,373
Deferred tax assets:
Net operating loss carryforwards                  (146,373)
Valuation allowance                               66,000

Net deferred tax liability                  $      0 -

     A valuation allowance must be established to offset any portion of a
deferred tax asset which more likely than not will not produce a future benefit.
A valuation allowance in the amount of $66,000 was established as of September
30, 1997.

     The Company's effective income tax rate and the U.S. federal statutory rate
are substantially the same.  The benefit from the graduated federal tax rate  is
offset by the state and local tax liability.


<PAGE>


4.   Financial Advisory and Investment Banking Fees and
     Other Transactions with Affiliates and Related Parties

       The  Company  has  retained  M.D.  Sass  Investors  Services,  Inc.  (the
"Investment  Adviser")  as  the Company's investment  adviser.   The  Investment
Adviser is a registered investment adviser under the Investment Advisers Act  of
1940,  as  amended.   The Investment Adviser is part of a  group  of  affiliated
investment  advisers  and  other affiliated entities comprising  the  M.D.  Sass
organization  ("M.D. Sass").  Upon completion of the Company's offering  of  its
common  shares, the Company entered into a two-year Financial Advisory Agreement
with  the  Investment  Adviser, pursuant to which the  Investment  Adviser  will
receive  a  base  fee  of $200,000 per annum, for furnishing  the  Company  with
administrative services, including necessary executive, administrative, internal
accounting  and  support services.  In addition to the base fee, the  Investment
Adviser will receive an incentive fee for its investment advisory services equal
to 20% of the increase in net asset value of the Company's shares, as defined in
the  Financial  Advisory  Agreement.  There were no  incentive  fees  earned  or
payable at September 30, 1997.

     The Company was party to an Investment Banking Agreement with UI USA, for a
period of one year, ending October 31, 1996.  Pursuant to this agreement, UI USA
furnished  investment banking services to the Company for a fee of $100,000  per
annum.   Such services consisted of assisting the Company and Investment Adviser
in the evaluation, structuring and negotiation of investment opportunities.  The
Company paid $8,333 for such services covering the period from October 1,  1996,
through the date of termination of the agreement.

5.   Board of Directors Fees

      The  Company pays each of its five independent directors an annual fee  of
$10,000 for the directors' services as such.

6.   Investment Transactions

      As  of  September  30,  1997  the accumulated unrealized  appreciation  on
investments   was  $227,668,  consisting  of  $1,169,918  of  gross   unrealized
appreciation and $942,250 of gross unrealized depreciation.

7.   Concentration of Credit Risk and Off-Balance Sheet Risk

      The  Company  engages  in  security purchase and  sale  transactions  with
regulated  broker-dealers.  In connection with these transactions,  the  Company
may  be  subject to credit risk in the event the counterparty or  the  Company's
regulated clearing brokers cannot fulfill their contractual obligations.

     The Company's activities with off balance sheet risk include the writing of
traded  stock  market  index options.  The Company is  subject  to  market  risk
associated with changes in the value of the underlying stock index.  As a writer
of options, the Company receives a premium at the outset and then bears the risk
of unfavorable changes in the price of the stock index underlying the option.


<PAGE>


8.   Investment in CVSI, Inc.

      In  July  1997,  the  Investment Adviser and certain  of  its  affiliates,
including the Company (collectively, the "Buyer"), purchased a majority interest
in   the  Open  Service  Solutions  business  unit  ("CVSI")  of  Computervision
Corporation  ("Computervision"), through CVSI Acquisition Co., L.L.C.,  a  newly
formed  Delaware limited liability company.  In the transaction, the Buyer  paid
$7.6  million  to  Computervision for 76% of CVSI's Class A  Voting  Stock  (the
"Class  A Stock").  In addition, CVSI paid Computervision $25.0 million in  cash
and  issued  Computervision a $10.0 million subordinated note (the "Subordinated
Note").  Further, Computervision retained its ownership of 24% of CVSI's Class A
Stock  and  100% of CVSI's Class B Non-Voting Stock (the "Class B Stock").   The
Buyer  also  received  options  to purchase  (i)  the  Class  A  Stock  held  by
Computervision should the Buyer retire the Subordinated Note within one year  of
the transaction and (ii) the Class B Stock for $15.0 million.  Moreover, if CVSI
does  not  achieve  certain specified levels of product revenues  and  operating
margins  from Computervision-initiated referrals, CVSI will have the  option  to
purchase,  at  a  nominal  price, some or all of  the  Class  A  Stock  held  by
Computervision.   The  Buyer is a principal stockholder  of  Computervision  and
James  B. Rubin, an executive officer and director of the Company, serves  as  a
director of Computervision.

     In connection with the acquisition of CVSI, the Company received $89,535 of
investment banking fees and $35,814 of consulting fees.  The consulting fees are
being  amortized  over a one year period.  As of September 30, 1997,  $5,969  of
consulting  income has been recognized.  The Investment Advisor and  certain  of
its  clients and affiliates who acquired shares of CVSI also received investment
banking and consulting fees.

9.   Investment in Seaman Furniture Company, Inc.

      In August 1997, Seaman Furniture Company, Inc. ("Seamans") entered into an
Agreement  and  Plan  of Merger, as amended on September 4,  1997  (the  "Merger
Agreement") with SFC Merger Company ("Newco"), a Delaware corporation formed and
wholly  owned  by  the  Investment Adviser and  its  affiliates  (including  the
Company),  T. Rowe Price Recovery Fund, L.P. ("Price") and Carl Marks Management
Co., L.P. ("Marks," and collectively with the Investment Adviser and Price,  the
"Funds"),  pursuant  to  which  the Funds will acquire  through  a  merger  (the
"Merger")  all of the outstanding common stock of Seamans not already  owned  by
the Funds (the "Public Stock").  Upon consummation of the Merger, Newco will  be
merged  with  and  into  Seamans and each share  of  Public  Stock  (other  than
dissenting  shares) will be converted into the right to receive $25.05  in  cash
and  each  existing  Seamans stock option will be converted into  the  right  to
receive $25.05 in cash per share purchasable thereunder, less the exercise price
with  respect  thereto, other than certain options of officers  of  the  Company
which  will be cancelled and reissued as options of equivalent or greater  value
following the Merger.  Consummation of the Merger is subject to the approval  of
Seamans'  stockholders at a meeting scheduled for December  23,  1997,  and  the
satisfaction or waiver of certain other conditions.

      Following  consummation  of the Merger, the Funds  will  own  all  of  the
outstanding shares of Seamans Common Stock of which approximately 47.5% will  be
owned  by  the  Investment Adviser and its affiliates,  including  4.1%  by  the
Company.  In addition, 19.3% of Seamans Common Stock, on a fully diluted  basis,
will  be reserved for issuance to certain officers and employees of Seamans upon
the exercise of options.  Following the Merger, it is anticipated that the Funds
will  receive a dividend of approximately $67.0 million on the shares of Seamans
held  by  them,  approximately $2.74 million of which will be  received  by  the
Company.

10.  Subsequent Events

      On  November  4, 1997, Computervision Corporation ("CVN")  and  Parametric
Technology  Corporation  ("PTC") announced a definitive merger  agreement  under
which PTC will acquire CVN in a stock-for-stock transaction.  Under the terms of
the Agreement, each share of CVN common stock will be exchanged for .0866 shares
of PTC common stock.  The transaction is subject to several conditions including
regulatory approvals and approval of CVN's shareholders.  PTC has stated that it
expects the transaction to close in January 1998.


ITEM 9.             CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE

     None.


<PAGE>


                                    PART III


ITEM 10.            DIRECTORS AND EXECUTIVE OFFICERS

Executive Officers and Directors

     Listed below are the name, age and position with the Company of each of the
Company's  officers and directors.  All directors of the Company are  serving  a
current  term  of  office  which continues until  the  next  annual  meeting  of
stockholders,  and  all  officers are serving a current  term  of  office  which
continues until the next annual meeting of directors.

Name and Age                                 Position with the Company

Martin  D.  Sass  (55)*                         Chairman  of  the  Board,  Chief
Executive Officer
                                                 and Director

Hugh  R.  Lamle  (52)*                           Executive  Vice  President  and
Director

James B. Rubin (44)*                         Senior Vice President and Director

Martin E. Winter (43)*                       Secretary-Treasurer

Thomas M. Garvin (61)                        Director

Lawrence W. Leighton (63)                         Director

Edward Lowenthal (53)                        Director

Daniel R. Mazziota (60)                      Director

Guy E. Waldvogel (61)                        Director


_________________________
*Director who is an "Interested Person" within the meaning of the 1940 Act.


      The  following  is a detailed description of the profession  and  business
background of each officer and director.

      MARTIN  D.  SASS is an executive officer and principal of  the  Investment
Adviser and various affiliated registered investment advisers and other entities
which comprise the M.D. Sass organization ("M.D. Sass"), founded by Mr. Sass  in
1972.   Mr.  Sass also serves as a consultant to and a member of the Partnership
Board  of  Chase  &  MD  Sass Partners, and as Co-Chairman and  Chief  Executive
Officer of Resurgence Asset Management, L.L.C.  Prior to founding M.D. Sass, Mr.
Sass was President and principal shareholder of Neuwirth Management and Research
Corp.  from 1969 to 1972, where he managed several portfolios and mutual  funds.
Mr.  Sass was also a security analyst at Argus Research Corp. from 1963 to 1969,
where he founded and directed the Special Situations Department.  Mr. Sass holds
a  B.S. degree in Accounting from Brooklyn College, and has also studied finance
in graduate programs in New York University and City College of New York.


<PAGE>


      HUGH  R.  LAMLE is Executive Vice President and a principal of M.D.  Sass,
which  he joined in 1974.  Mr. Lamle is responsible for the formulation of fixed
income and quantitative investment policy and strategy, directing the management
at M.D. Sass of debt securities portfolios and directing the firm's new products
research  efforts.  Mr. Lamle also serves as the President and Chief  Investment
Officer  of  Chase  &  MD  Sass  Partners, and  President  of  Resurgence  Asset
Management, L.L.C.  He also serves as a public director of the Finex division of
the  New  York Cotton Exchange.  Prior to joining M.D. Sass, Mr. Lamle  in  1972
founded Lenox Capital Management, the investment management subsidiary of DuPont
Glore  Forgan,  Inc.   Mr. Lamle holds a B.A. degree in  Political  Science  and
Economics  from  Queens College and an M.B.A. degree in Finance and  Investments
from Baruch College.

      JAMES B. RUBIN joined M.D. Sass as Senior Managing Director in 1989,  with
over  15 years experience in advising firms in reorganizations and other special
situations.  At M.D. Sass, Mr. Rubin is head of the firm's Distressed Securities
Division  and  serves as Co-Chairman and Chief Investment Officer of  Resurgence
Asset  Management, L.L.C.  Mr. Rubin also serves as a director  of  Seamans  and
Computervision, and was Chairman of the Board of Directors of Ranger Industries,
Inc. from February 1990 to July 1997.  From 1986 until joining M.D. Sass, he was
the  principal of J.B. Rubin and Company.  From 1985 to 1986, Mr.  Rubin  was  a
Senior  Financial Analyst with Smith Vasiliou and its affiliates, including  the
distressed securities brokerage firm of R.D. Smith & Company, Inc.  Mr. Rubin is
a  graduate  of  Cornell University, with an undergraduate degree in  Industrial
Engineering.   He  also participated in graduate M.B.A. studies  in  Finance  at
Cornell and Pace Universities.

      MARTIN  E.  WINTER is Senior Vice President-Finance of M.D.  Sass,  having
joined  the  firm  in  1988.   He was previously a principal  in  the  Financial
Services Industry and Mergers and Acquisitions Groups of Arthur Young &  Company
(predecessor to Ernst & Young LLP) in New York, and he has 20 years  of  diverse
financial experience.  He is a certified public accountant and obtained his B.S.
in  Accounting  from the Wharton School of the University of Pennsylvania.   Mr.
Winter also has a M.A. in Economics from the University of Pennsylvania.

      THOMAS  M.  GARVIN currently has an industrial partnership with Ripplewood
Holdings  L.L.C.,  an equity investment fund.  Through that fund,  he  has  made
direct  investments in six leveraged acquisitions over the  last  two  years  in
pursuit  of a focused strategy in the food industry.  He is Chairman  and  Chief
Executive  Officer of the platform company, Edwards Fine Foods.   Formerly,  Mr.
Garvin  served  in various executive capacities at Keebler Company,  the  second
largest  U.S.  manufacturer and marketer of cookies and crackers, from  1969  to
1993, including those of President and Chief Executive Officer from 1978 to 1993
and  Chief  Operating Officer from 1976 to 1978.  During his tenure  at  Keebler
Company,  the  company progressed from a single product biscuit company  to  its
current  position of prominence in the baking and snack industries.  Mr.  Garvin
holds  B.S. and M.B.A. degrees from Loyola University and is a certified  public
accountant.


<PAGE>


      LAWRENCE  W.  LEIGHTON  is  a Senior Advisor  at  Bentley  Associates,  an
investment  bank  specializing  in private transactions.   Mr.  Leighton  was  a
Managing Director of L.M. Capital, an investment banking and buy-out firm,  from
September 1994 to January 1996.  From January 1994 to December 1994, he also was
Vice  Chairman  of  21,  Inc., a publicly-held company.  From  January  1989  to
January 1994, Mr. Leighton was President and Chief Executive Officer of UI  USA,
the  United States merchant bank of Credit Agricole, a large French-based  bank.
From  1982  until joining UI USA, Mr. Leighton was Managing Director responsible
for  the  international mergers and acquisitions activity  of  Chase  Investment
Bank.   From 1977 until 1982.  Mr. Leighton was a limited partner in the mergers
and acquisitions department of Bear, Stearns & Co. and from 1974 until 1977,  he
was  Director  of Strategic Planning of Norton Simon, Inc.  Mr.  Leighton  is  a
graduate  of Princeton University with a B.S.E. degree in Engineering and  holds
an M.B.A. degree from Harvard Business School.

      EDWARD  LOWENTHAL is a founder, Director and President of  Wellsford  Real
Properties, Inc. ("WRP"), an American Stock Exchange listed real estate company.
He  was President and a Trustee of Wellsford Residential Property Trust until it
was  acquired  by  Equity  Residential Property  Trust  ("EQR")  in  1997.   Mr.
Lowenthal  serves  as  a  director  of United  American  Energy  Corporation,  a
developer,  owner  and  operator of hydroelectric and other  alternative  energy
facilities,  a  director  of Omega Healthcare, Inc., a  healthcare  real  estate
investment trust; and as a trustee of EQR, a real estate investment trust.   Mr.
Lowenthal  is a member of the Board of Governors of the National Association  of
Real  Estate  Investment Trusts.  Mr. Lowenthal holds a B.A.  degree  from  Case
Western  Reserve  University and a J.D. degree from  Georgetown  University  Law
Center.

      DANIEL R. MAZZIOTA is principal of RSA Executive Search ("RSA"), which was
founded  in  1978.   RSA  specializes  in  recruitment  of  key  executives  and
management  personnel  in  the  consumer  goods  and  services,  healthcare  and
pharmaceutical,  finance,  electronics and  telecommunications  industries.   In
1967, Mr. Mazziota founded Microwave Power Devices, Inc. ("MPD"), which was sold
to  M/A-Com,  Inc. in 198 1. Mr. Mazziota continued as President  of  MPD  until
1987, when he became Chairman of RSA.  Mr. Mazziota also serves as President  of
IDM  Consulting,  which  provides business consulting  in  the  high  technology
mergers  and  acquisitions  field.  Mr. Mazziota  holds  Bachelors  and  Masters
degrees in Electrical Engineering from New York Polytechnic Institute.

      GUY  E. WALDVOGEL has been an independent consultant specializing  in  the
management  of  troubled  companies  in Europe  since  September  1989.   He  is
presently  holding directorships in various important enterprises in Europe  and
the  United  States.   From  1983  to 1989, he was  the  Senior  Executive  Vice
President of Societe Generale de Surveillance.  From 1980 to 1983, Mr. Waldvogel
served as President and chief Executive Officer of North American Operations  of
The  Alusuisse-Lonza  Group.  He was president and Chief  Executive  Officer  of
Givaudan, a subsidiary of Hoffmann-LaRoche, from 1973 to 1981, and held  various
other positions within the Hoffmann-LaRoche Group from 1965 until 1973.

Indemnification of Directors and Officers

      As  permitted  by Delaware law, the Company's Certificate of Incorporation
contains  an  article  limiting  the  personal  liability  of  directors.    The
Certificate of Incorporation provides that a director of the Company  shall  not
be  personally liable for monetary damages for a breach of fiduciary duty  as  a
director,  except  for liability (i) for any breach of the  director's  duty  of
loyalty,  (ii)  for  acts  or  omissions not in  good  faith  or  which  involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the  General  Corporation  Law  of the State of Delaware,  which  prohibits  the
unlawful  payment  of  dividends or the repurchase or redemption  of  stock,  or
(iv)  for  any transaction from which the director derived an improper  personal
benefit.   The  Company's Certificate of Incorporation also  provides  that  the
Company will indemnify all persons (including officers, directors and employees)
whom  it is empowered to indemnify pursuant to the provisions of Section 145  of
the Delaware General Corporation Law (or any similar provision of applicable law
at  the  time  in effect) to the full extent permitted thereby.   The  foregoing
provisions  are  subject,  however, to Section  17(h)  of  the  1940  Act  which
provides, in part, that neither the Certificate of Incorporation nor the by-laws
of  any BDC shall contain a provision which protects or purports to protect  any
officer  or  director of such BDC against any liability to such company  or  its
security  holders  to which he would otherwise be subject  due  to  his  willful
misfeasance,  bad faith, gross negligence or reckless disregard  of  the  duties
involved  in  the conduct of his office.  The Company currently  maintains  $5.0
million of officer and director liability insurance.


<PAGE>


Compliance with Section 16(a) of the Securities Exchange Act of 1934

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the  Company's officers, directors and holders of more than ten percent  of  the
Company's  Common Stock, to file reports of ownership and changes  in  ownership
with  the  Securities  and  Exchange Commission and Nasdaq.   Such  persons  are
required  to  furnish the Company with copies of all Section  16(a)  forms  they
file.   During  the  year  ended  September 30, 1997,  all  filing  requirements
applicable  to  its officers, directors and greater than ten percent  beneficial
owners were complied with.


ITEM 11.            EXECUTIVE COMPENSATION

Compensation of Executive Officers and Directors

      No  cash  compensation was paid by the Company to  any  of  its  executive
officers  during fiscal 1997, fiscal 1996 or fiscal 1995.  It is not anticipated
that executive officers will receive direct cash compensation in the foreseeable
future.

     Each director who is not an executive officer of the Company is compensated
for  his  services  at  a  fee  of $10,000 per annum.   Each  director  is  also
reimbursed for travel and other out-of-pocket disbursements actually incurred in
the business of the Company.

     Executive officers and directors of the Company are permitted to retain any
compensation  received for services to other companies, including  companies  in
which the Company invests and to which it renders managerial assistance.

Financial Advisory Agreement and Fees

The Investment Adviser

       The  Company  has  retained  M.D.  Sass  Investors  Services,  Inc.  (the
"Investment   Adviser")  as  the  Company's  investment  adviser  to   identify,
negotiate,  manage  and  liquidate investments for  the  Company.   The  Company
invests only in transactions recommended by the Investment Adviser.


<PAGE>


      The  Investment  Adviser  is  a registered investment  adviser  under  the
Investment Advisers Act of 1940.  The Investment Adviser is part of a  group  of
affiliated  investment  advisers and other affiliated entities  comprising  M.D.
Sass.   Founded  in  1972,  M.D. Sass is engaged in  investment  management  for
approximately 100 clients, including pension and profit sharing funds, municipal
employee  benefits  funds, insurance companies, endowment and charitable  funds,
large   corporations   and  wealthy  individuals.   M.D.  Sass   currently   has
approximately $11 billion in assets under management.

      The  Investment  Adviser and certain other M.D. Sass affiliates  currently
serve   as   general  partners  of  M.D.  Sass  Re/Enterprise   Partners,   L.P.
("Re/Enterprise "), M.D. Sass Corporate Resurgence Partners, L.P. ("Resurgence")
and  M.D.  Sass  Re/Enterprise-II,  L.P. ("Re/Enterprise-II"),  private  limited
partnerships  which have investment objectives similar to that of  the  Company,
achieving long-term capital appreciation of its assets by investing primarily in
securities of companies that are experiencing significant financial or  business
difficulties.

      Re/Enterprise, formed in October 1989, had approximately $130  million  in
assets as of September 30, 1997.  Re/Enterprise-II, formed in February 1996, had
approximately  $30 million in assets as of the same date.  Resurgence  completed
its  initial closing in May, 1997, with committed capital of approximately  $160
million.   Re/Enterprise  was a member of a group which acquired  a  controlling
interest in Seamans and assisted Seamans in a Restructuring.  Re/Enterprise also
participated  in the Restructurings of other companies, including Memorex  Telex
Corp.,  Emerson Radio Corp., Ranger Industries, Inc. (formerly known as  Coleco,
Inc.), SPI Holding, Inc., Leaseway Transportation Corp. and Forstmann & Company,
Inc.

      In  addition to the two Re/Enterprise partnerships, the Investment Adviser
and/or  other  affiliates  of  M.D. Sass serve as general  partners  of  a  more
aggressive,  higher-risk private limited partnership that invests in financially
troubled companies, a fund of funds, a private limited partnership that utilizes
a market-neutral strategy, and other private limited partnerships that invest in
municipal  and government securities and distressed real estate that appears  to
have a potential for recovery.  The Investment Adviser also serves as investment
adviser  to  two  private  offshore  investment  companies  pursuing  investment
strategies  similar  to  the  Re/Enterprise  partnerships,  Resurgence  and  the
Company, as well as a corporate pension fund of a Fortune 100 company.

      The principals of the Investment Adviser and other affiliates of M.D. Sass
are  Martin  D.  Sass and Hugh R. Lamle, each of whom serves as an  officer  and
director of the Company.  James B. Rubin and Martin E. Winter, officers  of  the
Investment Adviser and other affiliates of M.D. Sass, serve as officers  of  the
Company.  In addition, Mr. Rubin serves as a director of the Company.

      The  offices of the Investment Adviser are located at 1185 Avenue  of  the
Americas,  18th  Floor, New York, New York 10036, and its  telephone  number  is
(212) 730-2000.

The Financial Advisory Agreement

      The Company is party to a Financial Advisory Agreement with the Investment
Adviser  (the "Financial Advisory Agreement").  The Investment Adviser's  duties
under the Financial Advisory Agreement include locating, structuring, acquiring,
monitoring and disposing of investments for the Company.  The Company only makes
investments recommended by the Investment Adviser.  In addition, the  Investment
Adviser  also  provides  administrative services to the Company,  including  all
necessary  executive, administrative, internal accounting and  support  services
and  furnishes the Company with necessary office space.  The activities  of  the
Investment  Adviser on behalf of the Company are subject to the  supervision  of
the independent Directors of the Company.


<PAGE>


      Pursuant  to  the  Financial Advisory Agreement,  the  Investment  Adviser
receives  a base fee of $200,000 per annum for furnishing the Company  with  the
administrative services described above.

      In  addition to the base fee, the Investment Adviser receives an incentive
fee  for  its investment advisory services equal to 20% of net new appreciation,
if  any,  in  the  net  asset value of the shares of Common  Stock  outstanding,
adjusted  for all operating expenses, including accruals for any tax liabilities
on  income or realized gains from portfolio transactions.  The initial incentive
fee  calculation was made in November 1995 and a new calculation  has  been  and
will  continue  to be made at the end of each calendar quarter thereafter,  with
the  Investment  Adviser  receiving 20% of any net  new  appreciation  occurring
during the preceding four calendar quarters.  Thus, the fee is computed and paid
on a "rolling quarter" basis.

      At  any time the incentive fee is to be calculated, if the net asset value
per  share previously has reached a level at which an incentive fee was paid  (a
"previous  high  peak"), an additional incentive fee will be paid  only  on  the
incremental  appreciation of the shares of Common Stock  over  the  shares'  net
asset  value  after payment of the previous incentive fee at such peak.   In  no
event will an incentive fee be paid for recoupment of losses.  Thus, if the  net
asset  value  of  the shares of Common Stock falls below the initial  net  asset
value,  or the previous high peak at which the incentive fee was paid (less  the
incentive  fee paid at such level), no incentive fee will be due the  Investment
Adviser.   The  Investment Adviser will only be entitled to a further  incentive
fee  if the net asset value of the shares increases beyond the initial net asset
value,  or  its net asset value following payment of the incentive  fee  at  the
previous  high  peak,  as  the  case  may be.   Notwithstanding  the  foregoing,
incentive  fees  payable to the Investment Adviser under the Financial  Advisory
Agreement  will  not exceed the maximum amount which the Investment  Adviser  is
entitled  to  receive under the 1940 Act.  During fiscal 1997, the Company  paid
the  Investment  Adviser the base fee of $200,000.  No incentive  fee  has  been
accrued  in fiscal 1997 since the Company's net asset value has been  below  the
previous high peak.

     The Investment Adviser bears the expense of maintaining the staff necessary
for  performing its obligations under the Financial Advisory Agreement  and  all
other  expenses  associated with its duties as Investment Adviser.   Other  than
fees  payable  under  the Financial Advisory Agreement,  the  Company  bears  no
operating  expenses  other  than normal operating expenses  such  as  legal  and
auditing  fees, taxes and all direct expenses related to an investment including
all investment, legal and accounting expenses.

     The Financial Advisory Agreement continues from year to year if approved by
a  majority  of  independent directors and unless not less than  30  days  prior
written  notice is given by a party of its intention not to renew.  In  November
1997,  the  independent directors of the Company approved  the  renewal  of  the
Financial  Advisory  Agreement for a one-year period.   The  Financial  Advisory
Agreement is not assignable and may be terminated by either party upon  60  days
prior written notice given to the other party.


<PAGE>


ITEM 12.            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
               AND MANAGEMENT

      The  following  table sets forth, as of December 17, 1997, the  beneficial
ownership of the shares of Common Stock of the Company of (i) each person  known
by  the  Company to beneficially own more than five percent of the Common Stock,
(ii)  each director of the Company, (iii) the Company's Chief Executive  Officer
and (iv) all executive officers and directors as a group.

Name and Address                                     Amount and Nature
of Beneficial Stockholder                            of Beneficial    Percentage
of
or  Identity  of  Group(1)                              Ownership         Common
Stock

Officers and Directors:
Martin D. Sass                                        71,300          7.6
Hugh R. Lamle                                         48,600          5.2
James B. Rubin                                           -0-          -0-
Thomas M. Garvin                                         -0-          -0-
Lawrence W. Leighton                                   1,000            *
Edward Lowenthal                                       3,000            *
Daniel R. Mazziota                                       200            *
Guy E. Waldvogel                                         -0-          -0-

All executive officers and directors
as a group (nine persons)                         124,300(2)          13.2

5% or Greater Shareholders:
Curators Partners, L.P.                         94,034(3)(4)          10.0
420 Lexington Avenue
New York, New York

Robert Schneider                                52,945(3)(5)           5.6
2 Broadway
New York, New York

____________________
*Less than one percent

(1)  Unless otherwise indicated, the address of each beneficial owner is c/o the
     Company, 1185 Avenue of the Americas, 18th Floor, New York, NY 10036.
(2)  Includes 200 shares of Common Stock held by Martin E. Winter, the Company's
     Secretary-Treasurer.
(3)  Based on a Schedule 13D filed with the SEC.
(4)  Includes 56,900 shares of Common Stock held by certain accounts managed  by
     Curators Capital Management, Inc., an affiliate of Curators Partners, L.P.
(5)  Includes  12,000 shares of Common Stock owned jointly with Mr.  Schneider's
     spouse.   Excludes 18,650 shares of Common Stock owned by  Mr.  Schneider's
     spouse  over which Mr. Schneider disclaims beneficial ownership and  31,449
     shares  owned by RAS Securities Corp., a registered broker-dealer, acquired
     in  its ordinary course of business and over which Mr. Schneider has voting
     and dispositive power.


<PAGE>


ITEM 13.            CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      See  "Item  11.   Executive Compensation" with respect  to  the  Financial
Advisory Agreement entered into with the Investment Adviser.

      As  described in "Item 1. Business," the Company invests from time to time
jointly with affiliates of the Investment Adviser subject to restrictions  under
the 1940 Act and conditions set forth in an exemptive order granted by the SEC.

     The Company from time to time also effects securities sales to or purchases
from  affiliates  of  the  Investment Adviser pursuant  to  a  plan  adopted  in
accordance with Rule 17a-7 under the 1940 Act.


<PAGE>


                                     PART IV

ITEM 14.         EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
               AND REPORTS ON FORM 8-K

(a)  Documents filed as part of this report:

     (1)  Financial Statements

          Reference  is  made to the Index to Financial Statements of  Corporate
          Renaissance Group, Inc. included in Part II, Item 8, of this Report.

     (2)  Financial Statement Schedules

          All schedules for which provision is made in applicable regulations of
          the   SEC  are  not  required  under  the  related  instructions,  are
          inapplicable  or  the required information has been  included  in  the
          Financial Statements and therefore such schedules have been omitted.

     (3)  Exhibits

          Exhibit   Description of Exhibit
          
          1         Form of Amended and Restated Certificate of Incorporation(1)
          2         By-Laws, as amended(1)
          4         Form of Common Stock certificate (1)
          10.2      Revised  Form  of Financial Advisory Agreement  between  the
                    Company and M.D. Sass Investors Services, Inc.(1)
          27.1      Financial Data Schedule (SEC use only)

_________________________
(1)  Previously  filed  as  an  Exhibit of the  same  number  to  the  Company's
     Registration  Statement on Form N-2 (File No. 33-50424),  and  incorporated
     herein by reference.


(b)  Reports on Form 8-K

     None.

(c)  Item 601 Exhibits

     The exhibits required by Item 601 of Regulation S-K are set forth in (a)(3)
above.

(d)  Financial Statement Schedules

      The financial statement schedules required by Regulation S-K are set forth
in (a)(2) above.


<PAGE>


                                   SIGNATURES

Pursuant  to  the requirements of Section 12 of the Securities Exchange  Act  of
1934, the Registrant has caused the report or amendment thereto to be signed  on
its behalf by the undersigned, thereunto duly authorized.

                                   CORPORATE RENAISSANCE GROUP, INC.


                                      By:  /s/ Martin D. Sass
                                      Martin D. Sass
                                      Chairman of the Board and
                                      Chief Executive Officer
Dated:  December ____, 1997

      Pursuant to the requirements of the Securities Exchange Act of 1934,  this
report  has been signed below by the following persons in the capacities and  on
the dates indicated.

Signatures           Title                          Date


/s/ Martin D. Sass   Chairman of the Board, Chief   ________________
Martin D. Sass       Executive Officer and Director
                     (Principal Executive Officer)

/s/ Hugh R. Lamle    Executive Vice President       ________________
Hugh R. Lamle        and Director

/s/ James B. Rubin   Senior Vice President          ________________
James B. Rubin       and Director

/s/ Martin E. Winter Secretary-Treasurer (Principal ________________
Martin E. Winter     Financial and Accounting Officer)

/s/ Thomas M. Garvin Director                       ________________
Thomas M. Garvin

/s/ Lawrence W. Leighton Director                   ________________
Lawrence W. Leighton

/s/ Edward Lowenthal Director                       ________________
Edward Lowenthal

/s/ Daniel R. Mazziota   Director                   ________________
Daniel R. Mazziota

/s/ Guy E. Waldvogel Director                       ________________
Guy E. Waldvogel


</TABLE>