content: <PAGE>
   
                       SECURITIES AND EXCHANGE COMMISSION
  
                             Washington, D.C. 20549
  
                                    FORM 8-K
  
                                 CURRENT REPORT
  
                         ______________________________
  
     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
                Date of Report (Date of Earliest Event Reported):
  
                               September 18, 1997
                               ------------------
  
  
  Commission File Number 0-18655
                         -------
  
  
                             THE FAILURE GROUP, INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)
  
  
               DELAWARE                                       77-0218904
               --------                                       ----------
     (State or other jurisdiction                (I.R.S. Employer Identification
         of incorporation)                                    Number)
  
  
  149 COMMONWEALTH DRIVE, MENLO PARK, CALIFORNIA                   94025
  ----------------------------------------------                   -----
      (Address of principal executive office)                    (Zip Code)
  
  
  Registrant's telephone number, including area code      (650) 326-9400
                                                          --------------
  <PAGE>
   
  ITEM 2.   ACQUISITION OR DISPOSITION OF ASSETS.
  
       On September 18, 1997, the Company sold PLG, Inc. ("PLG"), a wholly-owned
  subsidiary of The Failure Group, Inc. (the "Registrant") to EQE International,
  Inc. ("EQE").  Subject to certain post-closing adjustments, EQE paid
  approximately $2.0 million in principle plus interest calculated at a rate of
  10% per annum.  These payments will be made in quarterly installments over a
  period of 18 months through March 18, 1999, with unamortized principal of
  approximately $1.0 million due and payable with the final quarterly payment.  In
  addition, the Registrant has retained approximately $1.1 million in cash on the
  books of PLG.  The sale of PLG has resulted in a gain over net book value of
  approximately $600,000, subject to certain post-closing adjustments.
  
       PLG is a firm that provides engineering and management consulting services
  relating to reliability, maintenance, and operational performance assessment.
  PLG, which has increasingly focused on providing services to governmental
  agencies, is a leader in analyzing the risks associated with nuclear power
  plants.  For the year-to-date period (though August), PLG was operating near
  break-even with an annualized revenue run rate of approximately $5 million.
  
  ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS.
  
       (a) Financial Statements of Business Acquired.
           ----------------------------------------- 
  
            Not applicable.
  
       (b) Pro Forma Financial Information.
           ------------------------------- 
  
            It is impracticable for the Registrant to provide the required pro
  forma financial statements for the business disposed at the time of filing of
  this report, but the Registrant will file such required financial statements by
  amendment as soon as practicable, but not later than 60 days after this report
  must be filed.
  
       (c)  Exhibits.
            -------- 
  
   2.1 (1)  Stock Purchase Agreement dated September 18, 1997 entered into
            among The Failure Group, Inc. and EQE International, Inc.
  27.1*     Financial Data Schedule
  --------------------
   *  To be filed by amendment.
  (1) Certain schedules delivered in connection with this agreement have been
      omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The
      Registrant agrees to supplementally furnish to the Commission, upon request,
      a copy of any such schedules.
  
                                        -2-
  <PAGE>
   
                                     SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  
                                      THE FAILURE GROUP, INC.
                                      -----------------------
                                            Registrant
  
  
  Date:  October 3, 1997              /s/ Michael R. Gaulke
                                      ---------------------
                                      Michael R. Gaulke
                                      President and CEO
  
                                        -3-
  <PAGE>
   
                                 INDEX TO EXHIBITS
                                 -----------------
  
  
  Exhibit
  Number                            Description of Document
  --------                          -----------------------
   2.1 (1)  Stock Purchase Agreement dated September 18, 1997 entered into among 
            The Failure Group, Inc. and EQE International, Inc.
  27.1*     Financial Data Schedule
  --------------------
   *  To be filed by amendment.
  (1) Certain schedules delivered in connection with this agreement have been
      omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The
      Registrant agrees to supplementally furnish to the Commission, upon request,
      a copy of any such schedules.
  
                                        -4-
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metadata_filer: {"company-data": {"conformed-name": "FAILURE GROUP INC", "cik": "0000851520", "assigned-sic": "8742", "irs-number": "770218904", "state-of-incorporation": "DE", "fiscal-year-end": "0103"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-18655", "film-number": "97690704"}, "business-address": {"street1": "149 COMMONWEALTH DR", "city": "MENLO PARK", "state": "CA", "zip": "94025", "phone": "4156886954"}, "mail-address": {"street1": "149 COMMONWEALTH DR", "city": "MENLO PARK", "state": "CA", "zip": "94025"}}
text: SECURITIES AND EXCHANGE COMMISSION
  
                             Washington, D.C. 20549
  
                                    FORM 8-K
  
                                 CURRENT REPORT
  
                         ______________________________
  
     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
                Date of Report (Date of Earliest Event Reported):
  
                               September 18, 1997
                               ------------------
  
  Commission File Number 0-18655
                         -------
  
                             THE FAILURE GROUP, INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)
  
               DELAWARE                                       77-0218904
               --------                                       ----------
     (State or other jurisdiction                (I.R.S. Employer Identification
         of incorporation)                                    Number)
  
  149 COMMONWEALTH DRIVE, MENLO PARK, CALIFORNIA                   94025
  ----------------------------------------------                   -----
      (Address of principal executive office)                    (Zip Code)
  
  Registrant's telephone number, including area code      (650) 326-9400
                                                          --------------
  ITEM 2.   ACQUISITION OR DISPOSITION OF ASSETS.
  
       On September 18, 1997, the Company sold PLG, Inc. ("PLG"), a wholly-owned
  subsidiary of The Failure Group, Inc. (the "Registrant") to EQE International,
  Inc. ("EQE").  Subject to certain post-closing adjustments, EQE paid
  approximately $2.0 million in principle plus interest calculated at a rate of
  10% per annum.  These payments will be made in quarterly installments over a
  period of 18 months through March 18, 1999, with unamortized principal of
  approximately $1.0 million due and payable with the final quarterly payment.  In
  addition, the Registrant has retained approximately $1.1 million in cash on the
  books of PLG.  The sale of PLG has resulted in a gain over net book value of
  approximately $600,000, subject to certain post-closing adjustments.
  
       PLG is a firm that provides engineering and management consulting services
  relating to reliability, maintenance, and operational performance assessment.
  PLG, which has increasingly focused on providing services to governmental
  agencies, is a leader in analyzing the risks associated with nuclear power
  plants.  For the year-to-date period (though August), PLG was operating near
  break-even with an annualized revenue run rate of approximately $5 million.
  
  ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS.
  
       (a) Financial Statements of Business Acquired.
           ----------------------------------------- 
  
            Not applicable.
  
       (b) Pro Forma Financial Information.
           ------------------------------- 
  
            It is impracticable for the Registrant to provide the required pro
  forma financial statements for the business disposed at the time of filing of
  this report, but the Registrant will file such required financial statements by
  amendment as soon as practicable, but not later than 60 days after this report
  must be filed.
  
       (c)  Exhibits.
            -------- 
  
   2.1 (1)  Stock Purchase Agreement dated September 18, 1997 entered into
            among The Failure Group, Inc. and EQE International, Inc.
  27.1*     Financial Data Schedule
  --------------------
   *  To be filed by amendment.
  (1) Certain schedules delivered in connection with this agreement have been
      omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The
      Registrant agrees to supplementally furnish to the Commission, upon request,
      a copy of any such schedules.
  
                                        -2-
  SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                                      THE FAILURE GROUP, INC.
                                      -----------------------
                                            Registrant
  
  Date:  October 3, 1997              /s/ Michael R. Gaulke
                                      ---------------------
                                      Michael R. Gaulke
                                      President and CEO
  
                                        -3-
  INDEX TO EXHIBITS
                                 -----------------
  
  Exhibit
  Number                            Description of Document
  --------                          -----------------------
   2.1 (1)  Stock Purchase Agreement dated September 18, 1997 entered into among 
            The Failure Group, Inc. and EQE International, Inc.
  27.1*     Financial Data Schedule
  --------------------
   *  To be filed by amendment.
  (1) Certain schedules delivered in connection with this agreement have been
      omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The
      Registrant agrees to supplementally furnish to the Commission, upon request,
      a copy of any such schedules.
  
                                        -4-