EXHIBIT 2.2

PROSKAUER ROSE LLP
Counsel for Debtors and Debtors-in-Possession
1585 Broadway
New York, New York  10036
(212) 969-3000
Alan B. Hyman (AH-6655)
Michael E. Foreman (MF-5802)
Scott K. Rutsky (SR-0712)

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------x
                                     :
In re:                               :        (Chapter 11)
                                     :
GOLDEN BOOKS FAMILY                  :
ENTERTAINMENT, INC., et al.,         :        Case Nos. 99-10030
                                     :        Through 99-10032 (TLB)
                                     :
                 Debtors.            :        (Jointly Administered)
                                     :
-------------------------------------x





                    DISCLOSURE STATEMENT PURSUANT TO SECTION
                    1125 OF THE BANKRUPTCY CODE FOR THE JOINT
                      PLAN OF REORGANIZATION OF THE DEBTORS
                    -----------------------------------------


THIS IS NOT A SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE PLAN. ACCEPTANCES
OR  REJECTIONS  MAY NOT BE  SOLICITED  UNTIL A  DISCLOSURE  STATEMENT  HAS  BEEN
APPROVED BY THE BANKRUPTCY COURT.  THIS DISCLOSURE  STATEMENT IS BEING SUBMITTED
FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE COURT.





Dated:  March 25, 1999
        New York, New York



<PAGE>


                                       I.


                            INTRODUCTION AND SUMMARY


A. Overview


          Golden  Books  Family  Entertainment,  Inc.  ("Parent"),  Golden Books
Publishing  Company,  Inc.  ("Publishing")  and Golden  Books Home  Video,  Inc.
("Video"  and  together  with Parent and  Publishing,  the  "Debtors" or "Golden
Books") transmit this Disclosure  Statement pursuant to Section 1125(b) of Title
11, United States Code, 11 U.S.C. ss.ss. 101 et seq. (the "Bankruptcy Code") and
Rule 3017 of the Federal Rules of Bankruptcy Procedure  ("Bankruptcy Rules"), in
connection  with their  Joint Plan of  Reorganization  dated March 25, 1999 (the
"Plan") in order to provide adequate information to enable holders of Claims and
Equity  Interests that are impaired under the Plan to make an informed  judgment
in  exercising  their right to vote for  acceptance  or rejection of the Plan. A
copy of the Plan is attached hereto as Exhibit A. All capitalized terms used but
not defined in this  Disclosure  Statement  shall have the  respective  meanings
ascribed to them in the Plan unless otherwise noted.

          THE DEBTORS  STRONGLY URGE  ACCEPTANCE  OF THE PLAN.  THE DEBTORS HAVE
NEGOTIATED  THE TERMS OF THE PLAN WITH AN INFORMAL  COMMITTEE  OF HOLDERS OF OLD
SENIOR NOTES (THE "INFORMAL SENIOR NOTE COMMITTEE") AND AN INFORMAL COMMITTEE OF
HOLDERS OF TOPrS  CERTIFICATES  (THE "INFORMAL TOPrS  COMMITTEE").  THE INFORMAL
SENIOR NOTE COMMITTEE AND THE INFORMAL TOPrS  COMMITTEE ALSO STRONGLY  RECOMMEND
THAT ALL


                                        1

<PAGE>



HOLDERS OF OLD SENIOR NOTES AND TOPrS CERTIFICATES VOTE TO ACCEPT THE PLAN.

B. Summary of Classification and Treatment Under the Plan



          In general, and as more fully described herein, the Plan effectuates a
restructuring of the Debtors'  pre-petition  indebtedness and operations.  Among
other  things,  the Plan  provides  for the  exchange of Old Senior  Notes for a
combination  of New Senior  Notes and New  Parent  Common  Stock.  The Plan also
provides for the exchange of TOPrS  Certificates for shares of New Parent Common
Stock.  Holders  of General  Unsecured  Claims,  to the  extent  not  previously
satisfied,  will either be  reinstated,  paid in full in  accordance  with their
respective  terms or otherwise  rendered  unimpaired.  Holders of Old  Preferred
Stock  Interests  and Old Common  Stock  Interests  will receive New Warrants to
purchase  New  Parent  Common  Stock.  Set forth in the  following  section is a
summary of the classification and treatment of Claims and Equity Interests under
the Plan.

          The Plan (i) divides Claims and Equity  Interests into eleven classes,
(ii) sets forth the  treatment  afforded to each class,  and (iii)  provides the
means  by  which  the  Debtors  will  be  reorganized  under  Chapter  11 of the
Bankruptcy  Code.  The following  table sets forth a summary of the treatment of
each  type of  Claim  and  Equity  Interest  under  the  Plan  (a more  detailed
description  of the Plan is set  forth  later in this  Disclosure  Statement  in
Section IV entitled "Overview of The Plan").1



--------
1            This summary  contains only a brief and simplified  description of
             the  classification  and treatment of Claims and Equity  Interests
             under the Plan. It does not describe every  provision of the Plan.
             Accordingly,  reference  should be made to the  entire  Disclosure
                                                                (continued. . .)

                                        2

<PAGE>

Class           Type of Claim/Interest    Treatment
--------------  ------------------------- --------------------------------------
Not Applicable  Allowed Administrative    To be paid  in  full, in  Cash, in
                Expense Claims            such amounts as (1)  are  incurred in
                                          the ordinary course of business by the
                                          Debtors,   (2)  are   Allowed  by  the
                                          Bankruptcy Court upon the later of the
                                          Effective  Date,  the  date of a Final
                                          Order  allowing  such   Administrative
                                          Expense  Claims,  or  any  other  date
                                          specified in such order, or (3) may be
                                          agreed  upon  between  the  holders of
                                          such Administrative Expense Claims and
                                          the Debtors.  

Not Applicable  Allowed Priority Tax      To be paid in full, in Cash,  upon the
                Claims                    later  of  Claims  (1)  the  Effective
                                          Date, (2) the date upon which there is
                                          a Final Order  allowing  such Claim as
                                          an Allowed Priority Tax Claim, (3) the
                                          date that such  Allowed  Priority  Tax
                                          Claim  would  have  been  due  if  the
                                          Reorganization   Cases  had  not  been
                                          commenced,  or  (4)  upon  such  other
                                          terms as may be agreed to between  the
                                          Debtors  and the holder of any Allowed
                                          Priority Tax Claim; provided, however,
                                          that the Debtors may, at their option,
                                          in lieu of  payment in full of Allowed
                                          Priority  Tax Claims on the  Effective
                                          Date,  make Cash  payments  respecting
                                          Allowed  Priority Tax Claims  deferred
                                          in accordance with Section  1129(a)(9)
                                          of the Bankruptcy Code.

(. . .continued)
              Statement (including exhibits),  the Plan, and the Plan Supplement
              for a complete  description of the classification and treatment of
              Claims and Equity Interests.

                                       3

<PAGE>

Class           Type of Claim/Interest    Treatment
--------------  ------------------------  --------------------------------
1               Priority Claims           Unimpaired. Each  holder of an Allowed
                                          Priority  Claim shall  receive Cash in
                                          an  amount   equal  to  such   Allowed
                                          Priority  Claim  on the  later  of the
                                          Effective   Date  and  the  date  such
                                          Priority   Claim  becomes  an  Allowed
                                          Priority  Claim, or as soon thereafter
                                          as is  practicable,  unless the holder
                                          of an Allowed  Priority  Claim and the
                                          Reorganized   Debtors   agree   to   a
                                          different treatment thereof.


2               General Secured Claims    Unimpaired.  At   the  option  of  the
                                          Reorganized  Debtors,  (i) an  Allowed
                                          General   Secured   Claim   shall   be
                                          reinstated and rendered  unimpaired in
                                          accordance with Section 1124(2) of the
                                          Bankruptcy  Code,  (ii) a holder of an
                                          Allowed  General  Secured  Claim shall
                                          receive  Cash in an  amount  equal  to
                                          such Allowed  General  Secured  Claim,
                                          including any interest on such Allowed
                                          General  Secured Claim  required to be
                                          paid pursuant to Section 506(b) of the
                                          Bankruptcy  Code,  on the later of the
                                          Effective   Date  and  the  date  such
                                          General   Secured   Claim  becomes  an
                                          Allowed  General  Secured Claim, or as
                                          soon thereafter as is practicable,  or
                                          (iii) a holder of an  Allowed  General
                                          Secured   Claim   shall   receive  the
                                          Collateral    securing   its   Allowed
                                          General Secured Claim and any interest
                                          on such Allowed  General Secured Claim
                                          required   to  be  paid   pursuant  to
                                          Section 506(b) of the Bankruptcy Code,
                                          in  full  and  complete   satisfaction
                                          thereof on the later of the  Effective
                                          Date and the date such General Secured
                                          Claim  becomes  Allowed,  or  as  soon
                                          thereafter as is practicable.



                                        4

<PAGE>



Class           Type of Claim/Interest    Treatment
--------------  ------------------------  --------------------------------
3               Old Senior Note Claims    Impaired. On the Effective  Date, each
                                          holder of an Allowed  Old Senior  Note
                                          Claim shall receive, in full and final
                                          satisfaction  of  such  Allowed  Claim
                                          (including  any  unsecured  deficiency
                                          Claim  in  respect  of the Old  Senior
                                          Notes),  its Pro Rata Share of (i) the
                                          New Senior Notes and  (ii)____  shares
                                          of New Parent  Common  Stock.  The New
                                          Parent  Common Stock issued to holders
                                          of  Allowed  Old  Senior  Note  Claims
                                          pursuant  to the Plan will  represent,
                                          in  the   aggregate,   42.5%   of  the
                                          authorized and  outstanding  shares of
                                          New   Parent   Common   Stock  on  the
                                          Effective  Date;  provided,   however,
                                          that the  foregoing  --------  -------
                                          percentage  is subject to  dilution by
                                          (i) shares of New Parent  Common Stock
                                          issued as a result of the  exercise of
                                          the New  Warrants,  (ii) shares of New
                                          Parent    Common   Stock   issued   in
                                          accordance  with the Management  Stock
                                          Option  Plan,  and  (iii)  such  other
                                          shares as may be authorized and issued
                                          pursuant  to  the  Reorganized  Parent
                                          Charter.



                                        5

<PAGE>

Class           Type of Claim/Interest    Treatment
-------------- ------------------------   --------------------------------
4              GPH Claims                 Impaired.  On the Effective  Date,
                                          each  holder of the  Allowed GPH Claim
                                          shall  receive,   in  full  and  final
                                          satisfaction  of  such  Allowed  Claim
                                          (including  any  unsecured  deficiency
                                          Claim in  respect  of the GPH  Notes),
                                          ______  shares  of New  Parent  Common
                                          Stock.  The New  Parent  Common  Stock
                                          issued to the  holder  of the  Allowed
                                          GPH Claim  pursuant to the Plan,  will
                                          represent, in the aggregate, 5% of the
                                          authorized and  outstanding  shares of
                                          New   Parent   Common   Stock  on  the
                                          Effective  Date;  provided,   however,
                                          that  the   foregoing   percentage  is
                                          subject to  dilution  by (i) shares of
                                          New Parent  Common  Stock  issued as a
                                          result  of the  exercise  of  the  New
                                          Warrants,  (ii)  shares of New  Parent
                                          Common Stock issued in accordance with
                                          the Management  Stock Option Plan, and
                                          (iii)  such  other  shares  as  may be
                                          authorized and issued  pursuant to the
                                          Reorganized Parent Charter.

5               TOPrS Claims              Impaired. On the Effective Date, each
                                          holder of an Allowed TOPrS Claim shall
                                          receive,    in    full    and    final
                                          satisfaction  of such  Allowed  Claim,
                                          its Pro Rata  Share of ____  shares of
                                          New  Parent  Common  Stock.   The  New
                                          Parent  Common Stock issued to holders
                                          of Allowed  TOPrS  Claims  pursuant to
                                          the  Plan,  will  represent,   in  the
                                          aggregate,  50.0%  of the  outstanding
                                          shares of New Parent  Common  Stock on
                                          the Effective Date; provided, however,
                                          that  the   foregoing   percentage  is
                                          subject to  dilution  by (i) shares of
                                          New Parent  Common  Stock  issued as a
                                          result  of the  exercise  of  the  New
                                          Warrants,  (ii)  shares of New  Parent
                                          Common Stock issued in accordance with
                                          the Management  Stock Option Plan, and
                                          (iii)  such  other  shares  as  may be
                                          authorized and issued  pursuant to the
                                          Reorganized Parent Charter.


                                        6

<PAGE>



Class           Type of Claim/Interest    Treatment
--------------  ------------------------  --------------------------------
6               General Unsecured         Unimpaired.To the extent not satisfied
                                          by the Debtors in the ordinary course 
                                          of  business  prior  to the  Effective
                                          Date,  in full and final  satisfaction
                                          of such claim,  the legal,  equitable,
                                          and  contractual  rights  to  which an
                                          Allowed   General    Unsecured   Claim
                                          entitles the holder  thereof  shall be
                                          left  unimpaired   and,   accordingly,
                                          shall be  satisfied  on the  latest of
                                          (a) the Effective Date, (b) the date a
                                          General  Unsecured  Claim  becomes  an
                                          Allowed Claim, (c) the date an Allowed
                                          General  Unsecured  Claim  becomes due
                                          and payable in the ordinary  course of
                                          the Debtors' business  consistent with
                                          the    Debtors'    ordinary    payment
                                          practices,  and (d) the  date on which
                                          the  Debtors  and the  holder  of such
                                          Allowed   General    Unsecured   Claim
                                          otherwise  agree  in  writing.  At the
                                          option of the Debtors,  the  treatment
                                          provided  in the Plan  will  result in
                                          the  payment  of any  Allowed  General
                                          Unsecured Claim, in Cash, in an amount
                                          equal   to   such   Allowed    General
                                          Unsecured  Claim (which  payment shall
                                          include  interest,  only to the extent
                                          to which the  holder of such Claim may
                                          be  contractually  entitled,   accrued
                                          through the date of payment).


                                        7

<PAGE>


Class           Type of Claim/Interest    Treatment
--------------  ------------------------- --------------------------------
7               Debt Securities           Impaired. Subject to the releases con-
                Rescission or Damage      tained in Section 9.1 of the Plan,each
                Claims                    holder of an Allowed  Debt  Securities
                                          Rescission   or  Damage   Claim  shall
                                          retain all  proceeds  derived  from or
                                          relating to any litigation  instituted
                                          by or  against  any such  holder or on
                                          his  behalf  which are  payable by any
                                          entity   other  than  the  Debtors  or
                                          Reorganized   Debtors   (but  not  any
                                          proceeds  from any of the  property or
                                          assets of the Debtors except  proceeds
                                          of insurance  policies  maintained  by
                                          the  Debtors)  but  shall  receive  no
                                          other  distribution  under the Plan.

8               Old Preferred Stock       Impaired.  On the Effective   Date,
                Interests                 all  Old  Preferred   Stock  Interests
                                          shall  be  canceled,   annulled,   and
                                          extinguished,  and the  holder  of the
                                          Allowed Old Preferred  Stock Interests
                                          shall receive  two-thirds (2/3) of the
                                          New Warrants.

9               Old Common Stock          Impaired.  On  the   Effective   Date,
                Interests                 all   Old   Common   Stock   Interests
                                          (including  any such Equity  Interests
                                          consisting   of  accrued   and  unpaid
                                          dividends on the Old  Preferred  Stock
                                          Interest) shall be canceled, annulled,
                                          and  extinguished,  and each holder of
                                          an Allowed Old Common  Stock  Interest
                                          shall  receive  its Pro Rata  Share of
                                          one-third (1/3) of the New Warrants.



                                        8

<PAGE>



Class           Type of Claim/Interest    Treatment
--------------  ------------------------- --------------------------------
10              Equity Interests          Impaired.Subject to the releases cont-
                Rescission or Damage      ained in Section 9.1 of the Plan, each
                Claims                    holder of an Allowed Equity  Interests
                                          Rescission   or  Damage   Claim  shall
                                          retain all  proceeds  derived  from or
                                          relating to any litigation  instituted
                                          by or  against  any such  holder or on
                                          his  behalf  which are  payable by any
                                          entity   other  than  the  Debtors  or
                                          Reorganized   Debtors   (but  not  any
                                          proceeds  from any of the  property or
                                          assets of the Debtors except  proceeds
                                          of insurance  policies  maintained  by
                                          the  Debtors)  but  shall  receive  no
                                          other  distribution under the Plan. 

11              Subsidiary Equity         Unimpaired.  On  the  Effective  Date,
                Interests                 record  holders of Allowed  Subsidiary
                                          Equity  Interests  shall  continue  to
                                          hold  such  equity  interests,   which
                                          equity  interests shall continue to be
                                          evidenced by the capital stock held by
                                          such record  holders in the Subsidiary
                                          or  Subsidiaries  as of the  Effective
                                          Date.


          THIS DISCLOSURE STATEMENT HAS BEEN APPROVED BY ORDER OF THE BANKRUPTCY
COURT AS CONTAINING  INFORMATION OF A KIND, AND IN SUFFICIENT  DETAIL, TO ENABLE
HOLDERS OF CLAIMS AND EQUITY INTERESTS TO MAKE AN INFORMED JUDGMENT IN VOTING TO
ACCEPT OR REJECT  THE PLAN.  APPROVAL  OF THIS  DISCLOSURE  STATEMENT  DOES NOT,
HOWEVER, CONSTITUTE A DETERMINATION OR RECOMMENDATION BY THE BANKRUPTCY COURT AS
TO THE FAIRNESS OR THE MERITS OF THE PLAN.


                                        9

<PAGE>



          THIS DISCLOSURE  STATEMENT CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF
THE PLAN,  THE PLAN  DOCUMENTS,  AND CERTAIN  FINANCIAL  INFORMATION.  WHILE THE
DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE AND PROVIDE  ADEQUATE
INFORMATION  WITH  RESPECT  TO THE  DOCUMENTS  SUMMARIZED,  SUCH  SUMMARIES  ARE
QUALIFIED  TO THE  EXTENT  THAT THEY DO NOT SET FORTH  THE  ENTIRE  TEXT OF SUCH
DOCUMENTS.  FURTHERMORE,  ALTHOUGH  THE  DEBTORS  HAVE MADE  EVERY  EFFORT TO BE
ACCURATE,  THE  FINANCIAL  INFORMATION  CONTAINED  HEREIN (WITH THE EXCEPTION OF
CERTAIN INFORMATION CONTAINED IN PUBLIC FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION  WHICH ARE ATTACHED  HERETO AS EXHIBITS "B" AND "C") HAS NOT BEEN THE
SUBJECT OF AN AUDIT BY AN OUTSIDE ACCOUNTING FIRM. IN THE EVENT OF ANY CONFLICT,
INCONSISTENCY,   OR  DISCREPANCY  BETWEEN  THE  TERMS  AND  PROVISIONS  IN  THIS
DISCLOSURE  STATEMENT  AND THE  TERMS  AND  PROVISIONS  IN THE  PLAN,  THE  PLAN
DOCUMENTS, OR THE FINANCIAL INFORMATION  INCORPORATED THEREIN BY REFERENCE,  THE
PLAN SHALL GOVERN FOR ALL PURPOSES.  ALL HOLDERS OF CLAIMS AND EQUITY  INTERESTS
SHOULD READ THIS DISCLOSURE STATEMENT, THE PLAN, THE EXHIBITS TO THIS DISCLOSURE
STATEMENT, AND THE PLAN DOCUMENTS IN THEIR ENTIRETY BEFORE VOTING ON THE PLAN.


                                       10

<PAGE>



          THE STATEMENTS AND FINANCIAL  INFORMATION  CONTAINED  HEREIN HAVE BEEN
MADE AS OF THE DATE HEREOF  UNLESS  OTHERWISE  SPECIFIED.  HOLDERS OF CLAIMS AND
EQUITY  INTERESTS  REVIEWING THIS DISCLOSURE  STATEMENT  SHOULD NOT INFER AT THE
TIME OF SUCH  REVIEW  THAT  THERE  HAVE BEEN NO  CHANGES  IN THE FACTS SET FORTH
HEREIN UNLESS SO SPECIFIED. WHILE THE DEBTORS HAVE MADE EVERY EFFORT TO DISCLOSE
WHERE CHANGES IN PRESENT  CIRCUMSTANCES  COULD  REASONABLY BE EXPECTED TO AFFECT
MATERIALLY THE VOTE ON THE PLAN, THIS  DISCLOSURE  STATEMENT IS QUALIFIED TO THE
EXTENT THAT  CERTAIN  EVENTS,  SUCH AS THOSE  MATTERS  DISCUSSED IN SECTION VIII
BELOW ENTITLED "RISK FACTORS," DO OCCUR.

          THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION
1125 OF THE  BANKRUPTCY  CODE  AND  NOT IN  ACCORDANCE  WITH  FEDERAL  OR  STATE
SECURITIES  LAW OR OTHER  APPLICABLE  NONBANKRUPTCY  LAW.  PERSONS  OR  ENTITIES
HOLDING OR TRADING IN OR OTHERWISE  PURCHASING,  SELLING OR TRANSFERRING  CLAIMS
AGAINST, OR SECURITIES OF, THE DEBTORS SHOULD EVALUATE THIS DISCLOSURE STATEMENT
IN LIGHT OF THE PURPOSE FOR WHICH IT WAS PREPARED.

          IN ACCORDANCE WITH THE BANKRUPTCY CODE, THIS DISCLOSURE  STATEMENT HAS
NOT BEEN APPROVED OR DISAPPROVED BY


                                       11

<PAGE>



THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS SUCH COMMISSION PASSED UPON THE 
ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.

          WITH RESPECT TO CONTESTED  MATTERS,  ADVERSARY  PROCEEDINGS  AND OTHER
PENDING OR THREATENED  ACTIONS,  THIS  DISCLOSURE  STATEMENT AND THE INFORMATION
CONTAINED  HEREIN SHALL NOT BE CONSTRUED  AS AN  ADMISSION OR  STIPULATION,  BUT
RATHER AS STATEMENTS MADE IN SETTLEMENT NEGOTIATIONS.

C. Voting and Confirmation Procedures

          Accompanying  this  Disclosure  Statement  are copies of the following
documents:  (i) the Plan, which is attached hereto as Exhibit "A", (ii) an Order
from the  Bankruptcy  Court (the  "Disclosure  Statement  Approval  Order")  (a)
approving this Disclosure  Statement as containing adequate information pursuant
to Section 1125 of the Bankruptcy Code; (b) approving the forms of Ballots to be
executed by holders of impaired  Claims and Equity  Interests  for voting on the
Plan;  and (c)  approving  the notice of and fixing the time for (1)  submitting
acceptances or rejections to the Plan, (2) the hearing to consider  confirmation
of the Plan, and (3) filing  objections to  confirmation  of the Plan; and (iii)
forms of  Ballots  to be  executed  by  holders  of  impaired  Claims and Equity
Interests for voting to accept or reject the Plan.


                                       12

<PAGE>



          The forms of Ballots,  and the related  materials  delivered  together
herewith, are being furnished,  for purposes of soliciting votes on the Plan, to
holders of (i) Old Senior  Notes whose  respective  names (or the names of whose
nominees)  appear as of the Voting Record Date  (defined  below) on the security
holder lists  maintained by the Old Senior Note  Indenture  Trustee,  (ii) TOPrS
Certificates  whose  respective names (or the names of whose nominees) appear as
of the Voting Record Date on the security  holder lists  maintained by the TOPrS
Trustee, (iii) GPH Claims, (iv) Debt Securities Rescission or Damage Claims, (v)
Old Preferred Stock Interests,  (vi) Old Common Stock Interests and (vii) Equity
Interest  Rescission or Damage Claims.  With regard  specifically  to the Senior
Notes and the TOPrS  Certificates  held by banks  and/or  brokers  (the  "Record
Holders") for the beneficial  ownership of other  entities or  individuals  (the
"Beneficial  Holders"),  the  Debtors or their  balloting  agent will  provide a
sufficient  number  of  copies of this  Disclosure  Statement,  the Plan and the
Ballots  to the  Record  Holders  for  transmission  to each  of the  Beneficial
Holders.  The  Debtors  shall  ask the  Record  Holders  to send  copies  of the
Disclosure  Statement,  the Plan and the  Ballots to the  respective  Beneficial
Holders,  and to collect completed  Ballots from such Beneficial  Holders on the
Debtors'  behalf.  The Record Holders shall be asked to summarize the results of
the votes received from the Beneficial Holders on a summary form, i.e., a master
ballot,  which  will be  provided  to each  Record  Holder by the  Debtors.  The
Disclosure  Statement is also being  provided to holders of claims in Classes 1,
2, 6 and 11 (who are  deemed to have  accepted  the Plan),  and other  entities,
solely for informational purposes.


                                       13

<PAGE>



          1. Who May Vote
             ------------

          Under  the  Bankruptcy  Code,  impaired  classes  of  Claims or Equity
Interests are entitled to vote to accept or reject a plan of  reorganization.  A
class  which is not  "impaired"  is deemed to have  accepted a Plan and does not
vote.  A class is  "impaired"  under  the  Bankruptcy  Code  unless  the  legal,
equitable,  and contractual  rights of the holders of Claims or Equity Interests
in such class are not modified or altered.  For purposes of the Plan, holders of
Old Senior Note Claims in Class 3,  holders of GPH Claims in Class 4, holders of
TOPrS Claims in Class 5, holders of Debt Securities  Rescission or Damage Claims
in Class 7, holders of Old Preferred  Stock Interests in Class 8, holders of Old
Common Stock Interests in Class 9, and holders of Equity Interest  Rescission or
Damage Claims in Class 10 are impaired and are entitled to vote on the Plan.

          2. Voting Instructions
             -------------------


          All votes to accept or reject  the Plan must be cast by using the form
of Ballot,  or, in the case of a brokerage firm holding Old Senior Notes,  TOPrS
Certificates,  or Old  Common  Stock  Interests  in its own name on  behalf of a
beneficial  owner,  the  Ballot  entitled  "Master  Ballot"  enclosed  with this
Disclosure  Statement.  No votes  other  than ones using  such  Ballots  will be
counted  except  to the  extent  the  Bankruptcy  Court  orders  otherwise.  The
Bankruptcy Court has fixed ____ __.m., New York City Time, on _______, 1999 (the
"Voting Record Date") as the time and date for the  determination  of holders of
record of  Claims  who are  entitled  to (a)  receive a copy of this  Disclosure
Statement and all of the related materials, and (b) vote to


                                       14

<PAGE>



accept  or  reject  the  Plan.  After  carefully  reviewing  the  Plan  and this
Disclosure  Statement,  including the attached  exhibits and the Plan Documents,
please  indicate  your  acceptance  or rejection of the Plan on the  appropriate
Ballot and return such Ballot in the enclosed envelope to:

                  Golden Books Plan of Reorganization
                  c/o Bankruptcy Services, LLC
                  70 East 55th Street
                  6th Floor
                  New York, New York  10022
                  (212) 376-8494
                  Attn:  Ms. Kathy Gerber


BALLOTS  MUST BE  RECEIVED  ON OR  BEFORE  4:00 P.M.  (NEW  YORK  CITY  TIME) ON
_________,  1999 (THE "VOTING DEADLINE").  ANY BALLOT WHICH IS NOT EXECUTED BY A
DULY AUTHORIZED PERSON SHALL NOT BE COUNTED. ANY BALLOT WHICH IS EXECUTED BY THE
HOLDER  OF AN  ALLOWED  CLAIM BUT  WHICH  DOES NOT  INDICATE  AN  ACCEPTANCE  OR
REJECTION OF THE PLAN SHALL BE DEEMED TO BE AN ACCEPTANCE.

IF YOU ARE A BENEFICIAL  HOLDER OF A SECURITY HELD BY A NOMINEE PLEASE NOTE THAT
BALLOTS  MUST BE RETURNED  BY HAND,  MAIL,  OR  OVERNIGHT  TRANSMISSION  TO YOUR
NOMINEE  IN  SUFFICIENT  TIME  FOR IT TO BE  FORWARDED  BY YOUR  NOMINEE  TO THE
DEBTORS' BALLOTING AGENT BY THE VOTING DEADLINE.


                                       15

<PAGE>



          If you have any questions  regarding the  procedures for voting on the
Plan, please contact the Debtors' balloting agent,  Bankruptcy Services, LLC, at
the above address and telephone number.

          3. Acceptance or Rejection of the Plan
             -----------------------------------

          Under the Bankruptcy  Code, a voting Class of Claims is deemed to have
accepted  the Plan if it is  accepted by  creditors  in such Class who, of those
voting on the Plan, hold at least two-thirds in amount and more than one-half in
number of the Allowed Claims of such Class.  A voting Class of Equity  Interests
is deemed to have  accepted  the Plan if it is  accepted  by  holders  of Equity
Interests who hold at least two-thirds in amount of the Equity Interests of such
Class that have actually voted on the Plan.

          If the Plan is not accepted by all impaired Classes of Allowed Claims,
the Plan may still be  confirmed  by the  Bankruptcy  Court  pursuant to Section
1129(b) of the Bankruptcy Code if (a) the Plan has been accepted by at least one
impaired Class of Claims,  and (b) the Bankruptcy Court determines,  among other
things,  that  the Plan  "does  not  discriminate  unfairly"  and is  "fair  and
equitable" with respect to each non-accepting impaired Class. If the Plan is not
accepted by all  impaired  Classes of Allowed  Claims or Equity  Interests,  the
Debtors reserve the right to ask the Bankruptcy Court to find that the Plan does
not  discriminate  unfairly  and is fair  and  equitable  with  respect  to each
impaired Class that has not accepted the Plan.


                                       16

<PAGE>



          4. Confirmation Hearing
             --------------------

          Section 1128(a) of the Bankruptcy Code requires the Bankruptcy  Court,
after notice, to hold a Confirmation Hearing.  Section 1128(b) of the Bankruptcy
Code provides that any party-in-interest may object to Confirmation of the Plan.

          Pursuant to Section  1128 of the  Bankruptcy  Code and Rule 3017(c) of
the  Bankruptcy  Rules,  the  Bankruptcy  Court has scheduled  the  Confirmation
Hearing  before the Honorable  Tina L. Brozman,  Chief United States  Bankruptcy
Judge, at the United States Bankruptcy Court, Southern District of New York, One
Bowling  Green,  New York,  New York for  _________,  1999 at ___ p.m.  A notice
setting  forth the time and date of the  Confirmation  Hearing has been included
along with this Disclosure Statement.  The Confirmation Hearing may be adjourned
from time to time by the Bankruptcy Court without further notice,  except for an
announcement  of such  adjourned  hearing date by the  Bankruptcy  Court in open
court at such hearing.

          5. Objections
             ----------

          Any  objection to  Confirmation  of the Plan must be in writing,  must
comply with the Bankruptcy  Rules and the Local Rules of the  Bankruptcy  Court,
and must be filed and served as required by the Bankruptcy Court pursuant to the
Disclosure Statement Approval Order. A copy of the Disclosure Statement Approval
Order accompanies this Disclosure Statement and contains all relevant procedures
relating to the submission of objections to  Confirmation  of the Plan.  Parties
submitting objections should review such order in its entirety.


                                       17

<PAGE>



                                       II.


                       BACKGROUND AND EVENTS PRECIPITATING
                       CHAPTER 11 FILING AND SOLICITATION

A.   Overview of the Debtors and their Business Operations


          Golden Books  publishes,  produces,  licenses and markets an extensive
range of children's and family-related media and entertainment  products. On the
Petition  Date,  the Debtors  employed over 1,100  individuals,  owned or leased
properties in five states,  and had  operations in Canada  (through a non-debtor
affiliate) and in the United Kingdom.  The Debtors' products and productions are
distributed throughout the United States, and worldwide in over 60 countries.

          On May 8, 1996, Golden Press Holding,  L.L.C.  ("GPH"),  an investment
vehicle formed by Warburg,  Pincus Ventures,  L.P.,  Richard E. Snyder and Barry
Diller,  invested  $65  million in Golden  Books  through  the  purchase  of the
Parent's Old Preferred Stock  Interests.2 At that time, the name of the Debtors'
parent corporation was changed from Western Publishing  Company,  Inc. to Golden
Books Family Entertainment, Inc.


-------  
2        GPH also  purchased  $10 million of GPH Notes on or about  September 8,
         1998. Class 4 under the Plan is made up of the holders of GPH Notes.





                                       18

<PAGE>



          On the Petition Date, the Debtors  operated through the following four
business segments:  (i) Children's  Publishing  Division,  (ii) Adult Publishing
Division,  (iii) Golden Books  Entertainment  Group and (iv) Commercial Printing
Division.3

          1. Children's Publishing Division
             ------------------------------

          Golden Books is the largest publisher of children's books in the North
American  retail market,  and has published its flagship  product line,  "Little
Golden Books",  for over 50 years. The Children's  Publishing  Division produces
storybooks, coloring/activity books, electronic storybooks, puzzles, educational
workbooks,  reference  books,  novelty  books,  chapter  books and fiction.  The
products of the Children's  Publishing  Division utilize both owned (in whole or
in part)  characters,  such as the Poky Little Puppy and Lassie,  and characters
licensed by Golden Books from third parties, such as Barney and the Muppets. The
Children's  Publishing  Division's products have traditionally been designed for
children up to age seven and have been distributed  through mass market channels
(which include national discount store chains, such as Wal-mart,  K-Mart, Target
and Toys "R" Us). Golden Books has also distributed  children's products through
bookstores and other retailers, special markets and international channels.


--------
3        For a detailed  description  of Golden  Books and its  operations,  see
         Golden  Books'  Annual  Report on Form 10-K for the  fiscal  year ended
         1997,  a  copy  of  which  is  annexed   hereto  as  Exhibit  "B."  The
         aforementioned  financial information is provided to permit the holders
         of Claims and  Equity  Interests  to better  understand  Golden  Books'
         historical business performance.



                                       19

<PAGE>



          2. Adult Publishing Division
             -------------------------

          The Adult Publishing Division publishes trade books focusing primarily
on hobbies,  parenting  and the  family.  The  products of the Adult  Publishing
Division  are  distributed  primarily  through  bookstores,  although  the  line
includes books published in formats  suitable for mass market  distribution.  In
February  1998,  the Adult  Publishing  Division  signed an  agreement  with St.
Martin's  Press,  Incorporated  to distribute its books in the United States and
Canada.4

          3. Entertainment Group Division
             ----------------------------

          The Golden Books  Entertainment  Group  Division  (the  "Entertainment
Division") was  established in August 1996 upon the  acquisition by Golden Books
of an extensive library of character-based family entertainment  properties from
Broadway  Video  Entertainment,  L.P. The  Entertainment  Division's  library is
comprised of copyrights,  distribution rights,  trademarks and licenses relating
to characters,  television programs and motion pictures, both animation and live
action, and includes individual specials and multiple episode series. Properties
from  this  library  are  licensed  to  third  parties,  both  domestically  and
internationally,  for use in television,  home video and other electronic media.
Included  in the  assets  of the  Entertainment  Division  are the  intellectual
property rights relating to a number of well-known  television programs,  motion
pictures and characters  including,  among others,  Christmas Classics,  Lassie,
Underdog, Lone Ranger and Felix the Cat.


-------- 
4        As  discussed  later in this  Disclosure  Statement,  Golden  Books has
         entered into an agreement to sell the Adult Publishing  Division to St.
         Martin's Press. A hearing to consider this sale is presently  scheduled
         for March 25, 1999.



                                       20

<PAGE>

          4. Commercial Printing Division
             ----------------------------

          The  Commercial  Printing  Division  allows the company,  as a leading
publisher,  to market its surplus  manufacturing  capabilities to third parties.
Customers of the Commercial  Printing Division include  educational  publishers,
religious publishers, brand marketers targeting children and families, and other
juvenile  publishers  and  entertainment   companies.  The  Commercial  Printing
Division also engages in commodity printing such as tax instruction booklets and
tax forms.

B. Pre-Petition Debt Structure of the Debtors

          Prior to the Filing  Date,  the  Debtors'  debt  structure  included a
secured working  capital  facility,  long-term debt consisting  primarily of the
Senior  Notes  and  the  TOPrS  Certificates,  and  short-term  debt  consisting
primarily of the GPH Notes.

          1. Pre-Petition Working Capital Facility
             -------------------------------------

          The  Debtors'  day-to-day  operations  were  primarily  financed  by a
secured,  revolving  working  capital  facility  with  NationsCredit  Commercial
Funding,  a  division  of  NationsCredit  Commercial  Corp.   ("NationsCredit"),
pursuant  to a Loan  and  Security  Agreement  dated  as of  June 3,  1998  (the
"NationsCredit  Agreement"),  by  and  between  NationsCredit,  as  lender,  and
Publishing,  as  borrower.  Publishing's  obligations  under  the  NationsCredit
Agreement  were  secured  by a  first  lien  and  security  interest  in (i) all
Accounts,  Chattel  Paper,  Documents  and  Inventory  (each as  defined  in the
NationsCredit Agreement) relating solely to


                                       21

<PAGE>



Publishing's  Children's  Publishing  Division  excluding  all of the  foregoing
assets relating to  Publishing's  Christmas  Classics,  Lone Ranger and Underdog
properties (as such terms are defined in the NationsCredit Agreement),  (ii) any
and all proceeds and products of the foregoing,  and (iii) all books and records
relating to any of the foregoing (collectively, the "NationsCredit Collateral").

          The NationsCredit  Agreement had an initial maximum borrowing capacity
of $30 million.  Prior to the Petition Date,  NationsCredit notified the Debtors
of the occurrence of certain  alleged events of default under the  NationsCredit
Agreement.  As a result, the Debtors and NationsCredit  entered into a series of
letter  agreements,  wherefore in  consideration  for certain payments and other
undertakings by the Debtors,  NationsCredit  agreed to refrain through  February
26, 1999,  from  exercising  its rights under the  NationsCredit  Agreement with
respect  to the  alleged  events  of  default.  Additionally,  pursuant  to such
agreements,  the Debtors'  maximum  borrowing  capacity was reduced from time to
time. On the Petition Date, the Debtors'  maximum  borrowing  capacity under the
NationsCredit  Agreement  was  approximately  $16  million  and the  outstanding
balance owed to NationsCredit was approximately $10 million.5


--------
5        On March 1,  1999 , the  Debtors  obtained  entry of an  Interim  Order
         authorizing  them  to  enter  into  a  debtor-in-possession   financing
         facility of up to $55 million with The CIT Group/Business  Credit, Inc.
         (and allowing for interim  borrowing  thereunder of up to $30 million),
         and  authorizing  the use of a portion of the proceeds of such facility
         to satisfy fully the Debtors' obligations to NationsCredit.



>


                                       22

<PAGE>



          2. The Old Senior Notes
             --------------------

          Pursuant to the Old Senior Note  Indenture,  dated September 15, 1992,
$150   million  of  Old  Senior   Notes  due  2002  were   issued  by   Parent's
predecessor-in-interest.  As part of the series of  transactions  related to the
1996  investment  by GPH (see  subsection  II.A.  above),  Parent  assigned  its
obligations  in respect of the Old Senior Notes to  Publishing.  Interest on the
Old Senior  Notes  accrues at the rate of 7.65% per annum and is payable on each
March 15 and  September  15. As part of the  incurrence  of the secured  working
capital  facility with  NationsCredit,  in June 1998,  the holders of Old Senior
Notes  directed  the Old Senior  Note  Indenture  Trustee to amend the  covenant
prohibiting secured  indebtedness and certain other provisions of the Old Senior
Note Indenture. Parent provided a guaranty of Publishing's obligations under the
Old Senior Notes.  Publishing  also provided the Old Senior Note  Indenture with
certain collateral described below. Publishing did not make the interest payment
due on September  15, 1998.  As of the Filing Date,  the  aggregate  amount owed
under  the  Old  Senior  Notes  (including  accrued  and  unpaid  interest)  was
approximately $160 million.

          The Old Senior Notes are secured  obligations of the Debtors  pursuant
to a security agreement dated as of June 2, 1998 (the "Security Agreement").  In
particular, the Debtors believe that the Senior Note Trustee (for the benefit of
all holders) holds valid, perfected and unavoidable (i) first priority liens and
security  interests  (subject  to  certain  permitted  liens)  in and  upon  (a)
inventory,  accounts  receivable,  chattel paper,  documents and proceeds of the
foregoing relating solely to Publishing's  Christmas  Classics,  Lone Ranger and
Underdog properties (as such terms are defined in the Security  Agreement),  and
the copyrights,


                                       23

<PAGE>



copyright licenses,  trademarks and trademark licenses associated therewith, (b)
certain  personal  property and fixtures  owned by Publishing and located at the
Debtors' distribution center in Crawfordsville,  Indiana, manufacturing facility
in Racine,  Wisconsin,  and corporate  headquarters  in New York, New York; (ii)
junior liens and security  interests  in and upon the  NationsCredit  Collateral
(subject to the terms and  conditions set forth  therein);  and (iii) a mortgage
lien upon  Publishing's  real property located in  Crawfordsville,  Indiana.  In
addition,  the Old Senior Note  Indenture  Trustee and the Informal  Senior Note
Committee  believe  that the Senior  Notes are entitled to be secured by a first
priority  lien on and  security  interest  in a certain  distribution  agreement
between Video and Sony Music and a related license agreement between  Publishing
and  Video  (collectively,  the  "Distribution  Agreement"),  and all  rights to
receive moneys due and to become due thereunder, and all proceeds thereof.

          3. GPH Claims
             ----------

          Pursuant to the GPH Note Purchase Agreement,  dated as of September 8,
1998,  among GPH,  Parent,  Publishing  and Video,  Video issued senior  secured
promissory  notes in the  original  principal  amount of $10 million to GPH. The
proceeds  from the Note Purchase  Agreement  were loaned to Publishing in return
for senior notes of Publishing in the original  principal  amount of $10 million
(the "Publishing Notes"). The Publishing Notes were pledged to GPH as collateral
for the GPH Notes.

          As additional  collateral for the GPH Notes,  the Debtors believe that
the GPH  Notes are  secured  by first  priority  liens  and  security  interests
(subject in certain  instances  to  permitted  liens) in and upon all of Video's
assets (including Video's rights under the Distribution


                                       24

<PAGE>



Agreement  and all  rights of Video to  receive  moneys  due and to  become  due
thereunder,  and all  proceeds  thereof).  Video's  obligations  under  the Note
Purchase Agreement were guaranteed by both Parent and Publishing.  In connection
therewith, Parent pledged to GPH all of the issued and outstanding capital stock
of Publishing  and Video,  and all  dividends,  cash and other rights in respect
thereof,  and all proceeds of any of the  foregoing.  As of the Filing Date, the
aggregate  amount  owed to GPH  under  the Note  Purchase  Agreement  (including
accrued and unpaid interest) was approximately $10.2 million.

          4. TOPrS Certificates
             ------------------

          Prior to the Filing Date, Parent and Publishing issued $118 million in
original  principal  amount  of  8.75%  Convertible  Debentures  due  2016  (the
"Convertible  Debentures")  to the Golden  Books  Financing  Trust  (the  "TOPrS
Trust"),  a Delaware  Statutory  Business Trust. In turn, the TOPrS Trust issued
$118 million of 8.75% Convertible Trust Originated Preferred Securities due 2016
(the "TOPrS  Certificates"),  which  represent  undivided  beneficial  ownership
interests in the assets of the TOPrS Trust (i.e.,  the Convertible  Debentures).
Pursuant to the terms of the TOPrS Trust,  a bankruptcy  filing by Publishing or
Parent  causes a  dissolution  of the TOPrS  Trust,  whereupon  the  Convertible
Debentures are to be distributed to the holders of the TOPrS  Certificates  on a
pro rata  basis.6 The  Convertible  Debentures  are joint and several  unsecured
obligations   of  Parent   and   Publishing.   


--------
6         Given the direct interrelationship  between the Convertible Debentures
          and the TOPrS Certificates,  they are treated collectively as a single
          Class of "TOPrS Claims" for purposes of the Plan.


                                       25

<PAGE>



          The TOPrS  Certificates  are  convertible  at the option of the holder
into shares of Old Common Stock of Parent at a conversion rate of  approximately
$13 per  share of  Common  Stock.  Interest  payments  on both  the  Convertible
Debentures and TOPrS  Certificates are payable in arrears  quarterly,  provided,
however,  that  Parent and  Publishing  have the option to defer the  payment of
interest  for  successive  periods not  exceeding  20  consecutive  periods.  In
November  1998 and  February  1999,  Golden Books  exercised  its right to defer
interest payments due with respect to the TOPrS Certificates.

C.   Pre-Petition Capital Structure

          As of the Petition Date, Parent had approximately 27,899,047 shares of
common stock,  $.01 par value per share,  issued and  outstanding.  Parent's Old
Common  Stock is listed for  inclusion  on the  NASDAQ  National  Market  System
("NASDAQ").  In  February,  1999,  trading  of  Parent's  Old  Common  Stock was
suspended by NASDAQ.

          As of the Petition Date, Parent also had 13,000 shares of its Series B
Preferred   Stock,  no  par  value  (the  "Old  Preferred   Stock")  issued  and
outstanding.  These shares are held by GPH whose  aggregate  investment for such
shares was approximately $65 million.

          The Old Preferred  Stock is convertible  into 6,500,000  shares of Old
Common Stock at a conversion  price of $10 a share.  The Old Preferred  Stock is
entitled to receive as quarterly  dividends  195,000  shares of Old Common Stock
(together  with  certain  amounts of cash if the market  value of the Old Common
Stock falls below certain thresholds specified in the certificate of designation
relating to the Old Preferred Stock) through May 8, 2000. However,


                                       26

<PAGE>



the Debtors  have not paid  195,000  shares of Old Common Stock and certain cash
amounts due as unpaid dividends on the Old Preferred Stock.

D.   Events Precipitating Chapter 11 Filing

          The  Debtors'  Chapter  11  proceedings  were  preceded  by  liquidity
difficulties  which they  experienced  after incurring  operating losses for the
past several years, including  restructuring costs related to the implementation
of a long-term financial strategic plan centered on the Debtors' core publishing
operations.  Such difficulties  hampered the Debtors' ability to fund day-to-day
operations and maintain future business prospects.

          As  a  result  of  the  Debtors'  insufficient  liquidity,  Publishing
determined  that it was in the best interests of its creditors and  stockholders
for it not to make a September 15, 1998  interest  payment in respect of the Old
Senior Notes,  but rather attempt to pursue  long-term  strategic  financial and
capital  restructuring  options.  Publishing's failure to make the September 15,
1998 interest payment on the Old Senior Notes resulted in the reactivation of an
unrestricted  informal  committee  of  holders of Old  Senior  Notes,  which had
originally been formed in connection with the series of transactions  related to
the incurrence of the pre-petition  working capital facility with  NationsCredit
in June,  1998.  Members of this  informal  committee  held, as of September 15,
1998, in the aggregate,  approximately 60% of the principal amount of Old Senior
Notes. Members of the informal committee included,  at that time, the following:
AEGON, U.S.A.  Investment Management,  Inc., Avenue Advisors, LLC, Ohio National
Life Insurance Company,  Principal Life Insurance Company, Provident Mutual Life
Insurance


                                       27

<PAGE>



Company,  Security  Benefit Life Insurance Company, Alliance  Capital Management
Corporation and Bennett Management Corporation.

          During the negotiations  leading up to the agreed Plan, the first five
members of the informal  committee  listed in the foregoing  sentence  agreed to
become  "restricted"  in order to receive  material  non-public  information  to
assist them, in their capacity as members of the Informal Senior Note Committee,
in making recommendations regarding the proposed restructuring to all holders of
Senior Notes.  The Informal  Senior Note  Committee has retained the law firm of
Stroock & Stroock & Lavan LLP, 180 Maiden  Lane,  New York,  New York 10038,  as
counsel,  and the financial  advisory firm of Houlihan Lokey Howard & Zukin, 685
Third Avenue, New York, New York 10017, as financial advisor.

          In November 1998,  due to continued  liquidity  problems,  the Debtors
deferred a scheduled interest payment due with respect to the TOPrS Certificates
pursuant  to the  terms of such  certificates.  Thereafter,  the  Debtors  began
discussions with a second ad hoc committee,  the Informal TOPrS Committee,  that
had  formed  earlier.  The  members  of the  Informal  TOPrS  Committee  include
Deephaven Capital Management, David Matlin, Stephen J. Devoe, III, Oleg Lagetko,
Anil Suri, Chris Pechock,  Stacy Herman,  Mark Patterson,  Greyhound Lines, Inc.
Amalgamated  CNCL  Retirement  and  Disability  Trust,  P.R. Co.,  Forest Global
Convertible  Fund Series B-1, Forest Global  Convertible Fund Series A-5, Forest
Performance Fund, Forest  Alternative  Strategies Fund II, LP Series B-3, Forest
Strategies Fund III, LP Series A-5M, Forest  Alternative  Strategies Fund II, LP
Series A-5-2,  Forest  Fulcrum Fund LP,  SoundShore  Holdings  Ltd.,  SoundShore
Opportunity Holding Fund Ltd., and Krista Cowley, which, upon information


                                       28

<PAGE>



and belief,  hold an aggregate of  approximately  32% of the  outstanding  TOPrS
Certificates.  The Informal  TOPrS  Committee is  represented by the law firm of
Cleary,  Gottlieb,  Steen & Hamilton,  One  Liberty  Plaza,  New York,  New York
10006-1470,  as counsel,  and Jefferies & Company,  Inc., 650 Fifth Avenue,  New
York,  New York 10019,  as financial  advisors.  In February,  1999, the Debtors
again exercised their right to defer a scheduled  interest  payment on the TOPrS
Certificates.

          After failing to make the  September 15, 1998 interest  payment on the
Old Senior Notes, the Debtors were notified of certain alleged events of default
under the NationsCredit  Agreement.  As previously noted,  NationsCredit and the
Debtors entered into letter  agreements  pursuant to which,  among other things,
NationsCredit agreed to refrain from exercising remedies under the NationsCredit
Agreement  with  respect to such  events of  default  and the  Debtors'  maximum
borrowing  capacity  was reduced from $30 million to  approximately  $16 million
immediately  prior to the Petition Date. Such reduced liquidity further hampered
the Debtors'  pre-petition  business  operations  and their ability to implement
their pre-petition operational  restructuring plan. Accordingly,  in October and
November 1998, the Debtors  explored the  possibility of obtaining a new working
capital facility to provide them with greater liquidity to stabilize  operations
and allow the continued  implementation of their operational  restructuring plan
while  they  continued  to  pursue a  long-term  resolution  of their  financial
difficulties.

          In particular,  the Debtors undertook extensive  negotiations with the
Informal  Senior  Note  Committee  and  potential  lenders  with  respect  to  a
replacement  working capital  facility.  Such negotiations were required because
any working capital facility which provided


                                       29

<PAGE>



rights or borrowing  capacity greater than those contained in the  NationsCredit
Agreement  also  required  an  amendment  to the Old Senior Note  Indenture.  In
November,  1998,  the Debtors  believed  that they were close to entering into a
replacement  working capital and term loan facility with The CIT  Group/Business
Credit,  Inc.  which would have provided them with greater  borrowing  capacity.
However,  despite  extensive  efforts by all parties,  it was determined  that a
replacement  facility could not be  implemented  at that time,  primarily due to
complex  intercreditor  issues  and  disputes,  and  efforts  to  pursue  such a
transaction ceased. Nonetheless,  the parties continued discussions concerning a
long-term restructuring of Golden Books' indebtedness.

          During  discussions  with its  creditor  constituencies,  Golden Books
emphasized the benefits of a consensual transaction,  and the potential harm the
uncertainties of a protracted,  contentious restructuring process could cause to
Golden  Books'  relationships  with its  suppliers  and  customers.  Ultimately,
following  months of negotiations  with the Informal Senior Note Committee,  the
Informal TOPrS Committee,  GPH, Mr. Richard E. Snyder (the Debtors' Chairman and
Chief  Executive  Officer)  and others,  the  parties  reached an  agreement  in
principle on the terms of a restructuring of Golden Books'  indebtedness,  which
the parties determined would be best accomplished through a pre-arranged Chapter
11 proceeding.

          To memorialize the agreement,  the parties negotiated and entered into
a  "Restructuring  Agreement," a copy of which is annexed hereto as Exhibit "D",
outlining the terms and provisions by which the Debtors, members of the Informal
Senior Note  Committee  and of the Informal  TOPrS  Committee  and certain other
signatory holders of such securities,


                                       30

<PAGE>



Mr.  Richard E. Snyder and GPH,  would  support a  restructuring  of the Debtors
through a Chapter 11 plan of  reorganization.  The Plan,  which is  described in
this Disclosure Statement,  embodies the terms and arrangements set forth in the
Restructuring  Agreement. In general, the Plan provides for, among other things,
an  exchange  of the Old Senior  Notes for new senior  secured  notes and equity
interests in Reorganized  Parent,  and an exchange of TOPrS Certificates and GPH
Notes for equity interests in Reorganized Parent. The Debtors' general unsecured
trade  creditors  shall be paid in full under the Plan. The Plan also provides a
distribution of New Warrants to holders of Old Preferred Stock Interests and Old
Common Stock Interests.

          Additionally,  pursuant to the  Restructuring  Agreement,  the parties
thereto agreed inter alia, to: (i) support  confirmation  of the Plan;  (ii) not
vote against, object to or support an objection to the Plan; (iii) not vote for,
consent  to,  support  or  participate  in any  modification  of the Plan or the
severance of any provision  thereof that is  determined  to be invalid,  void or
unenforceable  (unless such  modification or the severance of such provision has
been  agreed to in writing by each of the  parties  thereto);  and (iv) not vote
for,  consent to, support or participate in the  formulation  of, and shall vote
against,  any  other  plan  of  reorganization  for  any or all of the  Debtors.
Furthermore,  under  the  Restructuring  Agreement,  the  Informal  Senior  Note
Committee,  the Informal TOPrS  Committee,  and each of the  respective  members
thereof, Mr. Snyder and GPH each agreed that the distributions under the Plan in
respect of such person's  claims  against,  or interests in, the Debtors is fair
and equitable under Section 1129(b) of the Bankruptcy Code.


                                       31

<PAGE>



          Pursuant to its terms, the Restructuring  Agreement may terminate upon
the occurrence of any of the following  events,  unless waived in writing by all
of the parties thereto:

          (i) the Plan and the DIP Order are not filed  within  twenty-one  (21)
          days after the effective date of the Restructuring Agreement;

          (ii) projections  supporting the Plan are not filed within twenty-five
          (25) days after the filing of the Plan;

          (iii) the Plan is not  confirmed  within one  hundred  and fifty (150)
          days after the effective  date of the  Restructuring  Agreement (or an
          order  is  entered  which  has  the  practical  effect  of  preventing
          confirmation of the Plan within one hundred and fifty (150) days after
          the effective date of the Restructuring Agreement);

          (iv) the Plan shall not become effective within two hundred (200) days
          after the effective date of the Restructuring Agreement;

          (v) any party fails to perform, in any material respect,  any of their
          obligations under the Restructuring  Agreement or to support the terms
          set forth in the exhibits thereto;

          (vi) holders of more than 20% in the aggregate  principal amount, on a
          per issue  basis,  of Old  Senior  Notes  that are not  members of the
          Informal Senior Note Committee or of TOPrS  Certificates  that are not
          members of the Informal TOPrS  Committee  shall take actions which are
          materially  adverse to, and in contravention of, the obligations under
          the Restructuring  Agreement of the respective members of the Informal
          Senior Note Committee or Informal TOPrS Committee; or

          (vii) there shall be any material modification to, or severance of any
          provision of, the Plan which is materially inconsistent with the terms
          and  conditions  set  forth  in  the  exhibits  to  the  Restructuring
          Agreement (including,  without limitation, a material modification to,
          or severance of, the release and indemnification  provisions set forth
          in the exhibits to the Restructuring Agreement).




                                       32

<PAGE>



E. Pre-Petition Asset Disposition and Expense Reduction Efforts

          Throughout the entire pre-petition  negotiation process,  Golden Books
continued  to  implement  its  pre-petition   operational   restructuring  plan,
centering on a rehabilitation around the Debtors' core children's publishing and
distribution businesses. In that regard, prior to the Petition Date, the Debtors
undertook  extensive  efforts to reduce  overhead and other  operating  expenses
through,  among other things,  the  termination of nonessential  employees,  the
disposition of certain nonessential assets and facilities, and the consolidation
of business and administration  functions.  Among other actions, in 1998, Golden
Books sold its distribution  center in Coffeyville,  Kansas, and a manufacturing
and distribution  facility in  Fayetteville,  North Carolina.  In addition,  the
Debtors  consolidated their office space in New York City. Such efforts resulted
in several  million dollars in expense  reductions.  The Debtors' cost reduction
and business consolidation efforts are ongoing.


                                      III.

                        SIGNIFICANT POST-PETITION EVENTS


A.   Commencement Of Chapter 11 Cases

          On February 26, 1999 (the  "Petition  Date"),  in furtherance of their
restructuring  efforts,  the  Debtors  filed  their  Chapter  11  cases  in  the
Bankruptcy  Court.  The Debtors'  cases were assigned to the  Honorable  Tina L.
Brozman,  Chief United States  Bankruptcy Judge for the Southern District of New
York. The Debtors continue to operate their businesses and manage


                                       33

<PAGE>



their properties as debtors-in-possession  pursuant to Sections 1107 and 1108 of
the Bankruptcy Code. As of the date hereof, no trustee or official  committee of
unsecured  creditors  has been  appointed in the Debtors'  cases.  The following
sections  present a brief  description  of some of the major  events  which have
occurred since the Petition Date.

B. First Day Orders

          On the  Petition  Date or shortly  thereafter,  the  Bankruptcy  Court
entered  several  orders  authorizing  the Debtors to pay  various  pre-petition
claims and granting other relief  necessary to help the Debtors  stabilize their
day-to-day business operations.  These orders were designed to allow the Debtors
to continue business operations with minimum  disruptions and dislocations,  and
to ease the strain on the Debtors'  relationships with their employees and other
parties.  Included among the orders entered by the Court were orders authorizing
the  Debtors  to: (i) pay  pre-petition  payroll,  business  expenses  and other
employee-related  obligations;  (ii) pay pre-petition  royalties in the ordinary
course of business; (iii) continue the Debtors' return policy; and (iv) continue
and maintain their consolidated cash management system,  existing bank accounts,
and to use existing business forms.

C.  Professional Retentions

          On the Petition Date, the Bankruptcy Court entered orders  authorizing
the Debtors to retain,  among  others,  (i) the law firm of Proskauer  Rose LLP,
1585  Broadway,  New York,  New York 10036,  as  bankruptcy  and  reorganization
counsel, and (ii) the firm of Conway,


                                       34

<PAGE>


Del Genio,  Gries & Co.,  Olympic  Tower,  645 Fifth Avenue,  New York, New York
10022, as financial advisors.

D. Post-Petition Financing

          As noted above,  prior to the Petition Date,  the Debtors'  operations
were hampered by, among other things,  significant reductions in their borrowing
capacity under their pre-petition  working capital facility with  NationsCredit.
Accordingly, on the Petition Date, one of the most important issues addressed by
the Debtors was obtaining  access to an adequate  post-petition  working capital
facility to enable them to operate their businesses on a competitive  basis and,
thus, to successfully  reorganize.  After due deliberation and  consideration of
viable alternatives, the Debtors determined that it was in the best interests of
their creditors and estates to seek  authorization and approval of a $55 million
post-petition  financing  facility  from  The CIT  Group/Business  Credit,  Inc.
("CITBC").  Accordingly, on the Filing Date, the Debtors filed an application to
authorize and approve of such facility  pursuant to a Revolving  Credit and Term
Loan Agreement with CITBC dated as of March 1, 1999 (the "Loan Agreement").

          On March 1, 1999,  the  Bankruptcy  Court  entered  an  Interim  Order
preliminarily  approving of the Loan  Agreement and  authorizing  the Debtors to
borrow up to $30 million  thereunder on an interim basis pending a final hearing
presently  scheduled  for March 25,  1999.  Pursuant  to the Interim  Order,  as
security for the interim  borrowings  under the CITBC loan  facility,  CITBC was
granted senior and junior liens on specified assets of the Debtors, and a


                                       35

<PAGE>



superpriority  administrative  expense claim (subject to a carve out for fees of
the United States Trustee and specified professional fees).

          In  addition,   pursuant  to  the  Interim  Order,  the  Debtors  were
authorized to use  collateral  (including  cash  collateral)  in which liens and
security  interests  were held by the Old Senior Note  Indenture  Trustee and by
GPH. Pursuant to the Interim Order, replacement and additional senior and junior
liens on  specified  assets  were  provided  to the Old  Senior  Note  Indenture
Trustee,  and replacement  liens on its pre-petition  collateral and a specified
superpriority administrative expense claim were provided to GPH.

E. Sale of Assets of the Adult Publishing Division

          As noted  above,  the  Debtors  have  been  implementing  a  long-term
strategic  business  plan  centered  on their  core  children's  publishing  and
distribution  operations through, among other things, the divestment of non-core
assets.  In that regard,  on or about March 8, 1999,  the Debtors filed a motion
seeking  authorization  to sell the assets  comprising  their  Adult  Publishing
Division,  which had been  extensively  marketed  since the Fall of 1998, to St.
Martin's Press,  Incorporated for  approximately $11 million (subject to certain
adjustments).  The proposed sale is subject to higher and better offers on terms
and  conditions  contained in an order of the  Bankruptcy  Court dated March 15,
1999. A hearing to approve of the sale to St. Martin's Press,  Incorporated  (or
to any successful overbidder) is presently scheduled for March 25, 1999.


                                       36

<PAGE>



                                       IV.

                              OVERVIEW OF THE PLAN


A.  General


          The  following is a summary  intended as a brief  overview of the Plan
and is  qualified  in its  entirety by reference to the full text of the Plan, a
copy of which is annexed hereto as Exhibit A, and the Plan  Supplement.  Holders
of Claims  and  Equity  Interests  are  respectfully  referred  to the  relevant
provisions of the Bankruptcy Code and are encouraged to review the Plan and this
Disclosure Statement with their counsel.

          In general, a Chapter 11 plan of reorganization must (i) divide Claims
and equity  interests  into separate  categories  and classes,  (ii) specify the
treatment  that each category and class is to receive under such plan, and (iii)
contain other provisions  necessary to implement the reorganization of a debtor.
A Chapter 11 plan may specify that the legal, equitable,  and contractual rights
of the holders of Claims or equity  interests  in certain  classes are to remain
unchanged  by the  reorganization  effectuated  by the plan.  Such  classes  are
referred to as "unimpaired" and, because of such favorable treatment, are deemed
to vote to accept the plan.  Accordingly,  it is not  necessary to solicit votes
from  holders  of Claims  or  equity  interests  in such  "unimpaired"  classes.
Pursuant  to  Section  1124(1)  of the  Bankruptcy  Code,  a class of  claims or
interest is "impaired," and entitled to vote on a plan,  unless the plan "leaves
unaltered the legal,  equitable,  and contractual  rights to which such claim or
interest entitles the holder of such claim or interest."


                                       37

<PAGE>



          The Debtors believe that (i) under the Plan holders of impaired Claims
and Equity  Interests will obtain a greater  recovery than they would  otherwise
obtain if the  assets of the  Debtors  were  liquidated  under  Chapter 7 of the
Bankruptcy  Code,  and (ii) the Plan will  enable  the  Debtors  to emerge  from
Chapter 11 as a viable and  competitive  enterprise,  and enhance  the  Debtors'
ability to effect a return to profitability.

B. Classification of Claims and Equity Interests


          Section  1122  of  the  Bankruptcy   Code  provides  that  a  plan  of
reorganization  shall  classify  the claims and equity  interests  of a debtor's
creditors and equity interest holders. In compliance with Section 1122, the Plan
divides  the  holders of Claims and Equity  Interests  into two  categories  and
eleven  Classes,  and sets forth the  treatment  offered to each  Class.7  These
Classes take into account the  differing  nature and priority of Claims  against
the Debtors.  Section 101(5) of the Bankruptcy  Code defines "Claim" as a "right
to  payment,  whether  or not such right is  reduced  to  judgment,  liquidated,
unliquidated, fixed, contingent, matured,


-------- 
7        A debtor is  required  under  Section  1122 of the  Bankruptcy  Code to
         classify the claims and interests of its creditors and interest holders
         into classes  containing  claims and interests  that are  substantially
         similar  to the other  claims or  interests  in such  class.  While the
         Debtors  believe  that  their  classification  of all Claims and Equity
         Interests is in compliance  with the  provisions of Section 1122 of the
         Bankruptcy  Code,  it is  possible  that a holder  of a Claim or Equity
         Interest  may  challenge  the  Debtors'  classification  scheme and the
         Bankruptcy Court may find that a different  classification  is required
         for the Plan to be confirmed.  In such event,  it is the present intent
         of the Debtors,  to the extent  permitted by the Bankruptcy  Court,  to
         modify the Plan to provide for whatever reasonable classification might
         be required by the Bankruptcy  Court for  Confirmation,  and to use the
         acceptances  received  by the  Debtors  from any  holder  of a Claim or
         Equity  Interest  pursuant  to this  solicitation  for the  purpose  of
         obtaining  the approval of the Class or Classes of which such holder of
         a Claim or Equity Interest is ultimately deemed to be a member.



                                       38

<PAGE>



unmatured,  disputed,  undisputed,  legal, equitable, secured or unsecured" or a
"right to an  equitable  remedy for breach of  performance  if such breach gives
rise to a right to payment  whether or not such right to an equitable  remedy is
reduced  to  judgment,   fixed,  contingent,   matured,   unmatured,   disputed,
undisputed, secured or unsecured." A "Claim" against the Debtors also includes a
Claim  against  property of the  Debtors,  as provided in Section  102(2) of the
Bankruptcy Code. An interest is an equity interest in a debtor.

          For the holder of a Claim to participate in a reorganization  plan and
receive the treatment offered to the class in which it is classified,  its Claim
must be  Allowed.  Under the Plan,  an Allowed  Claim is defined as: (a) a Claim
that has been listed by the Debtors in their  Schedules and (i) is not listed as
disputed,  contingent  or  unliquidated,  and  (ii) is not a Claim as to which a
proof of claim has been filed;  (b) a Claim as to which a timely  proof of Claim
has been  filed  as of the Bar Date and  either  (i) no  objection  thereto,  or
application to estimate,  equitably subordinate or otherwise limit recovery, has
been made on or before any applicable deadline, or (ii) if an objection thereto,
or application to estimate,  equitably  subordinate or otherwise limit recovery,
has been  interposed,  the extent to which such  Claim  (whether  in whole or in
part) has been allowed by a Final Order;  (c) a Claim  arising from the recovery
of  property  under  Section  550 or 553 of the  Bankruptcy  Code and allowed in
accordance with Section 502(h) of the Bankruptcy  Code; or (d) any Claim allowed
under the Plan.


                                       39

<PAGE>



C. Treatment of Claims and Equity Interests Under the Plan

          The Plan segregates the various Claims against,  and Equity  Interests
in, the Debtors into Administrative Expense Claims, Priority Tax Claims, Class 1
consisting of Priority  Claims,  Class 2 consisting of General  Secured  Claims,
Class 3 consisting of Old Senior Note Claims,  Class 4 consisting of GPH Claims,
Class 5 consisting  of TOPrS  Claims,  Class 6 consisting  of General  Unsecured
Claims,  Class 7  consisting  of TOPrS  Securities  Litigation  Claims,  Class 8
consisting of Old Preferred  Stock Interests  Claims,  Class 9 consisting of Old
Common Stock Interests  Claims,  Class 10 consisting of Common Stock  Securities
Litigation Claims and Class 11 consisting of Equity Interests in Subsidiaries.

          Under the Plan,  Claims in Classes 1, 2, 6 and 11 are unimpaired,  and
Claims in Classes 3, 4, 5, 7, 8, 9 and 10 are impaired. In the Debtors' opinion,
the treatment  accorded to the impaired  Classes of Claims and Equity  Interests
under the Plan  represents  the best  treatment  which can be  provided  to such
Classes under the  circumstances and is superior to the treatment which would be
afforded to such Classes in the event of a liquidation of the Debtors. Set forth
below is a summary of the Plan's treatment of the various categories and Classes
of Claims and Equity Interests. This summary is qualified in its entirety by the
full text of the Plan. In the event of an inconsistency between the Plan and the
description  contained herein,  the terms of the Plan shall govern.  The Plan is
complicated  and   substantial.   Time  should  be  allowed  for  its  analysis;
consultation  with a legal and/or financial advisor is recommended and should be
considered.


                                       40

<PAGE>

          1. Unclassified Categories of Claims


                a. Category 1 -- Administrative Expense Claims
                   -------------------------------------------

          Administrative  Expense Claims include the actual and necessary  costs
and  expenses  incurred  during  the  Chapter  11 cases.  Under  the  Plan,  all
Administrative Expense Claims shall be paid in full, in Cash, in such amounts as
(a) are  incurred in the  ordinary  course of business by the  Debtors,  (b) are
Allowed by the Bankruptcy  Court upon the later of the Effective  Date, the date
upon which there is a Final Order allowing such Administrative  Expense Claim or
any other date  specified  in such order,  or (c) may be agreed upon between the
holder of such Administrative Expense Claim and the Debtors.

          Administrative  Expense  Claims shall  include  obligations  to CITBC,
costs  incurred in the operation of the Debtors'  businesses  after the Petition
Date,  the fees and  expenses  of  Professionals  retained by the  Debtors,  the
Informal Senior Note Committee,  the Old Senior Note Indenture Trustee, GPH, the
Informal TOPrS Committee,  the TOPrS Trustee,  any statutory committee appointed
to serve in the Chapter 11 Cases,  and the fees due to the United States Trustee
pursuant to 28 U.S.C. ss. 1930. The reasonable fees and expenses  incurred on or
before the Effective Date by the members of the Informal  Senior Note Committee,
the Old Senior Note Indenture  Trustee,  the Informal TOPrS  Committee,  and the
TOPrS Trustee  including the respective  counsel and financial  advisors to such
committees,  and the reasonable fees and expenses of counsel to GPH, incurred in
connection  with  the  Chapter  11  Cases  or the  Plan  shall  be  paid  by the
Reorganized Debtors as Administrative Expense Claims (without application by,


                                       41

<PAGE>



or on behalf of, any such Person to the Bankruptcy  Court,  unless  specifically
ordered  by the  Bankruptcy  Court or any such  Person has been  retained  by an
Official  Committee  pursuant to Sections 327 or 1103 of the Bankruptcy Code, in
which  event,  the  provisions  of  the  next  paragraph  shall  apply).  If the
Reorganized  Debtors and any such Person  cannot agree on the amount of fees and
expenses to be paid to such  Person,  such  amount  shall be  determined  by the
Bankruptcy Court.

          All entities  seeking an award by the Bankruptcy Court of Professional
Fees, or of  compensation  for services  rendered or  reimbursement  of expenses
incurred through and including the Confirmation  Date under Sections  503(b)(2),
503(b)(3),  503(b)(4) or 503(b)(5) of the Bankruptcy  Code, (a) shall file their
respective  final  applications  for  allowances  of  compensation  for services
rendered and  reimbursement of expenses  incurred through the Confirmation  Date
within thirty (30) days after the Confirmation  Date, and (b) if granted such an
award by the  Bankruptcy  Court,  shall be paid in full in such  amounts  as are
allowed by the  Bankruptcy  Court (i) on the later of the Effective  Date or the
date such Administrative Expense Claim becomes an Allowed Administrative Expense
Claim, or as soon  thereafter as is  practicable,  (ii) upon such other terms as
may be mutually  agreed upon  between  such holder of an Allowed  Administrative
Expense Claim and the Debtors-in-Possession or, on and after the Effective Date,
the Reorganized Debtors, or (iii) in accordance with the terms of any applicable
administrative   procedures   order  entered  by  the  Bankruptcy   Court.   All
Professional  Fees for services rendered in connection with the Chapter 11 Cases
and the Plan after the Confirmation Date, including,  without limitation,  those
relating to the occurrence of the Effective Date, the


                                       42

<PAGE>



prosecution  of Causes of  Action  preserved  hereunder  and the  resolution  of
Disputed  Claims,  shall be paid by the  Reorganized  Debtors upon receipt of an
invoice  therefor,  or on such other terms as the Reorganized  Debtors may agree
to, without the need for further  Bankruptcy  Court  authorization or entry of a
Final Order. If the Reorganized Debtors and any Professional cannot agree on the
amount  of  post-Confirmation  Date  fees  and  expenses  to  be  paid  to  such
Professional, such amount shall be determined by the Bankruptcy Court.

          In  addition,  simultaneously  with the closing of the  Post-Effective
Date  Financing  Facility,  all of the  Debtors'  obligations  to the DIP Lender
pursuant  to the DIP Loan  Documents  shall be fully and  finally  satisfied  in
accordance with the terms thereof.

                b.       Category 2 -- Priority Tax Claims
                         ---------------------------------

          Allowed  Priority Tax Claims shall be paid in full, in Cash,  upon the
later of (a) the Effective  Date, (b) the date upon which there is a Final Order
allowing  such Claim as an Allowed  Priority  Tax Claim,  (c) the date that such
Allowed  Priority  Tax Claim would have been due if the Chapter 11 Cases had not
been  commenced,  or (d) upon such other  terms as may be agreed to between  the
Debtors and any holder of an Allowed Priority Tax Claim; provided, however, that
the Debtors may, at their option, in lieu of payment in full of Allowed Priority
Tax Claims on the Effective Date, make Cash payments respecting Allowed Priority
Tax  Claims  deferred  to the extent  permitted  by  Section  1129(a)(9)  of the
Bankruptcy Code and, in such event, interest shall be paid on the unpaid portion
of such Allowed Priority Tax Claim at a rate


                                       43

<PAGE>



to be agreed to by the Debtors and the appropriate governmental unit or, if they
are unable to agree, as determined by the Bankruptcy Court.

          2. Unimpaired Classes of Claims
             ----------------------------

          A  Chapter  11  plan  may  specify  that  the  legal,  equitable,  and
contractual  rights of the  holders  of Claims or equity  interests  in  certain
classes are to remain unchanged by the  reorganization  effectuated by the plan.
Such  classes are referred to as  "unimpaired"  and,  because of such  favorable
treatment,  are  deemed  to vote to  accept  the  plan.  Accordingly,  it is not
necessary to solicit  votes from  holders of Claims or equity  interests in such
"unimpaired"  classes.  Under the Debtors'  Plan,  the Class of Priority  Claims
(Class 1), the Class of General  Secured  Claims (Class 2), the Class of General
Unsecured  Claims  (Class 6) and the Class of Equity  Interests in  Subsidiaries
(Class 11) are unimpaired and, therefore, are deemed to have accepted the Plan.

                a.       Class 1 -- Priority Claims
                         --------------------------

          Each  holder of an Allowed  Priority  Claim shall  receive  Cash in an
amount equal to such Allowed  Priority  Claim on the later of the Effective Date
and the date such Priority Claim becomes an Allowed  Priority  Claim, or as soon
thereafter as is practicable, unless the holder of an Allowed Priority Claim and
the Reorganized Debtors agree to a different treatment thereof.


                                       44

<PAGE>



                b.   Class 2 -- General Secured Claims
                     ---------------------------------

          At the option of the  Reorganized  Debtors,  (i) an Allowed  Gen- eral
SecuredClaim  shall be reinstated  and rendered  unimpaired  in accordance  with
Section  1124(2) of the  Bankruptcy  Code,  (ii) a holder of an Allowed  General
Secured  Claim shall  receive Cash in an amount  equal to such  Allowed  General
Secured  Claim,  including  any interest on such Allowed  General  Secured Claim
required to be paid pursuant to Section  506(b) of the  Bankruptcy  Code, on the
later of the Effective  Date and the date such General  Secured Claim becomes an
Allowed General Secured Claim, or as soon thereafter as is practicable, or (iii)
a holder of an Allowed  General  Secured  Claim  shall  receive  the  Collateral
securing  its Allowed  General  Secured  Claim and any  interest on such Allowed
General  Secured  Claim  required to be paid  pursuant to Section  506(b) of the
Bankruptcy Code, in full and complete  satisfaction  thereof on the later of the
Effective Date and the date such General  Secured Claim becomes  Allowed,  or as
soon thereafter as is practicable.

          Included  in the  Class  of  General  Secured  Claims  are  subclasses
consisting of secured  obligations  to (i) the  Wisconsin  Department of Revenue
Division of Economic  Development  and the Racine  County  Economic  Development
Corporation,  and (ii) the Wisconsin  Department  of Revenue  Bureau of Business
Finance. Specifically,  Publishing and Parent have a $1 million joint obligation
to the Wisconsin  Department  of Revenue  Division of Economic  Development  and
Racine  County  Economic  Development  Corporation,  which is secured by certain
equipment located in Racine County,  Wisconsin.  Parent has a $3 million secured
obligation to the Wisconsin  Department  of Revenue  Bureau of Business  Finance
which


                                       45

<PAGE>



is secured by  specified  equipment  located in Racine  County,  Wisconsin.  The
Debtors intend to maintain such obligations  post-Confirmation,  and, therefore,
to render such  claimants  unimpaired  by providing  them with the treatment set
forth in clause (i) of the preceding paragraph.

                c.       Class 6 -- General Unsecured Claims
                         -----------------------------------

          To the extent not  satisfied by the Debtors in the ordinary  course of
business  prior to the Effective  Date, in full and final  satisfaction  of such
Claim, the legal, equitable,  and contractual rights to which an Allowed General
Unsecured  Claim  entitles  the holder  thereof  shall be left  unimpaired  and,
accordingly, shall be satisfied on the latest of (a) the Effective Date, (b) the
date a General Unsecured Claim becomes an Allowed Claim, (c) the date an Allowed
General  Unsecured  Claim becomes due and payable in the ordinary  course of the
Debtors' business  consistent with the Debtors' ordinary payment  practices,  or
(d) the date on  which  the  Debtors  and the  holder  of such  Allowed  General
Unsecured Claim otherwise  agree in writing.  At the option of the Debtors,  the
treatment provided in the Plan will result in the payment of any Allowed General
Unsecured  Claim, in Cash, in an amount equal to such Allowed General  Unsecured
Claim (which  payment  shall include  interest,  only to the extent to which the
holder of such Claim may be contractually entitled,  accrued through the date of
payment).




                                       46

<PAGE>



                d.  Class 11 -- Subsidiary Equity Interests
                    ---------------------------------------

          On the Effective  Date,  record holders of Allowed  Subsidiary  Equity
Interests shall continue to hold such equity  interests,  which equity interests
shall  continue to be evidenced by the capital stock held by such record holders
in the Subsidiary or Subsidiaries as of the Effective Date.

          3. Impaired Classes
             ----------------

          Pursuant to Section 1124 of the Bankruptcy  Code, a class of Claims or
equity interests is impaired unless the legal, equitable, and contractual rights
of the holders of Claims or equity  interests  in such class are not modified or
altered.  Holders of Allowed  Claims  and  interests  in  impaired  classes  are
entitled to vote on a debtor's plan of reorganization.  Under the Debtors' Plan,
the Class of Old Senior  Note Claims  (Class 3), the Class of GPH Claims  (Class
4), the Class of TOPrS Claims (Class 5), the Class of Debt Securities Rescission
or Damage Claims (Class 7), the Class of Old Preferred  Stock  Interests  (Class
8), the Class of Old Common Stock  Interests  (Class 9), and the Class of Equity
Interest Rescission or Damage Claims (Class 10) are impaired and, therefore, are
entitled to vote on the Debtors' Plan.

                a.       Class 3 -- Old Senior Note Claims
                         ---------------------------------


          Allowance of Old Senior Note Claims.  On the Effective  Date,  the Old
Senior  Note  Claims  shall be deemed  Allowed in the  aggregate  amount of $150
million  plus accrued and unpaid  interest  relating to the period up to but not
including the Petition Date.


                                       47

<PAGE>



          Distributions.  On the Effective  Date,  each holder of an Allowed Old
Senior Note Claim shall receive,  in full and final satisfaction of such Allowed
Claim  (including  any unsecured  deficiency  Claim in respect of the Old Senior
Notes), its Pro Rata Share of (i) the New Senior Notes and  (ii)______shares  of
New Parent  Common  Stock.  The New  Parent  Common  Stock  issued to holders of
Allowed  Old Senior  Note Claims as  described  in clause (ii) of the  preceding
sentence,  will  represent,  in  the  aggregate,  42.5%  of the  authorized  and
outstanding  shares of New Parent Common Stock on the Effective Date;  provided,
however,  that the foregoing  percentage is subject to dilution by (i) shares of
New Parent  Common Stock issued as a result of the exercise of the New Warrants,
(ii) shares of New Parent Common Stock issued in accordance  with the Management
Stock Option Plan,  and (iii) such other shares as may be authorized  and issued
pursuant to the Reorganized Parent Charter.

          Principal Terms of New Senior Notes.  Subject to the occurrence of the
Effective  Date,  the New Senior  Note  issued  pursuant  to the New Senior Note
Indenture shall contain the following principal terms:

          Issuer:                  Reorganized Publishing

          Guarantor:               Reorganized Parent and Reorganized Video (and
                                   their   respective    direct   and   indirect
                                   subsidiaries   and   affiliates   other  than
                                   Reorganized Publishing)

          Principal Amount:        $87 million

          Maturity:                Fifth anniversary of the Effective Date

          Interest:                Payable  in Cash at a rate of 10% per  annum,
                                   or  at  the  sole  election  of  the  issuer,
                                   payable  in kind  in  additional  New  Senior
                                   Notes at a rate of 13.5% per  annum,  payable
                                   semi-

                                       48

<PAGE>


                                   annually;  provided, however, that commencing
                                   three   years  after  the   Effective   Date,
                                   interest  on the New  Senior  Notes  shall be
                                   payable  only  in  cash  at a rate of 10% per
                                   annum.

          Amortization:            Mandatory  semi-annual  amortization payments
                                   of $8.33 million commencing three years after
                                   the Effective Date, i.e., commencing with the
                                   first  semi-annual  interest  payment that is
                                   due  during   the   fourth   year  after  the
                                   Effective  Date,  to retire $25.0  million of
                                   the principal balance of the New Senior Notes
                                   prior to maturity

          Collateral:              New  Senior  Notes  shall be  secured  by all
                                   collateral  securing  the Old Senior Notes on
                                   the  Petition   Date  as  described  in  this
                                   Disclosure  Statement   (including,   without
                                   limitation,  the proceeds  arising  under the
                                   Distribution Agreement);  provided,  however,
                                   that the liens  securing the Old Senior Notes
                                   on corporate  leasehold  improvements sold in
                                   connection  with  Parent's  reduction  of the
                                   office space at its corporate headquarters in
                                   New York, New York shall be deemed released.8
                                   The New Senior Notes shall also be secured by
                                   (i) a  first  lien  on (a)  the  Distribution
                                   Agreement,  and (b) the  Debtors'  rights and
                                   interests  in and  to  "Lassie,"  "Felix  the
                                   Cat,"  the   "Film   Library,"   and   "Other
                                   Entertainment  Works";  and  (ii)  a  blanket
                                   second  lien  on all  assets  pledged  to the
                                   lender(s)  under  the   Post-Effective   Date
                                   Financing   Facility.   Consistent  with  the
                                   foregoing,  upon the Effective  Date, the New
                                   Senior  Notes  will be  secured  by  either a
                                   first  or  second   lien  on  all  assets  of
                                   Reorganized   Parent   and  its   direct  and
                                   indirect subsidiaries.

          Call Protection:         New Senior Notes may be redeemed, in whole or
                                   in part,  at any time,  at the  option of the
                                   Issuer,  at the redemption  prices (expressed
                                   as  percentages  of  principal  amount of New
                                   Senior  Notes) set forth below,  plus accrued
                                   and   unpaid   interest   to  the   date   of
                                   redemption:

-------- 
8        See  Section  II.B.2.  for a  general  description  of  the  collateral
         securing the Old Senior Notes on the Petition Date.


                                       49

<PAGE>

       

                                   Years From
                                   Effective Date              Redemption Price
                                   ---------------             ----------------

                                   1 year                        105.00%
                                   2 years                       103.33%
                                   3 years                       101.25%
                                   Thereafter                    100.0%

                                   Any  net  proceeds   from  the  sale  of  any
                                   collateral  securing  the  New  Senior  Notes
                                   (excluding  sales of  inventory  or  accounts
                                   receivable   in  the   ordinary   course   of
                                   business)  will be used to pay  down  the New
                                   Senior  Notes   (subject  to  the  redemption
                                   schedule set forth above).

          Covenants:               Normal and customary for secured indebtedness
                                   of  this  nature,  to be  determined  to  the
                                   reasonable   satisfaction   of  the  Informal
                                   Senior Note  Committee and the Informal TOPrS
                                   Committee.


          Cancellation  of Old Senior Notes and Related  Instruments.  As of the
Effective  Date,  all  Old  Senior  Notes,   and  all  indentures,   agreements,
instruments and other documents evidencing Old Senior Note Claims and the rights
of the holders  thereof,  shall be  canceled  and deemed null and void and of no
further force and effect (all without further act or action by any Person),  and
all obligations of any Person  (including,  without  limitation,  the Old Senior
Note Indenture Trustee) under such instruments and agreements shall be fully and
finally satisfied and released. Notwithstanding the foregoing, such cancellation
shall not impair the rights and duties  under the Old Senior Note  Indenture  as
between the Old Senior Note Indenture Trustee and the beneficiaries of the trust
created thereby.


                                       50

<PAGE>



                b.       Class 4 -- GPH Claims
                         ---------------------

          Allowance of GPH Claims.  On the Effective  Date, the GPH Claims shall
be deemed Allowed in the aggregate amount of $10 million plus accrued and unpaid
interest relating to the period up to but not including the Petition Date.

          Distributions.  On the Effective  Date,  the holder of the Allowed GPH
Claim  shall  receive,  in full and final  satisfaction  of such  Allowed  Claim
(including  any unsecured  deficiency  Claim in respect of the GPH Notes) ______
shares of New Parent  Common  Stock.  The New Parent  Common Stock issued to the
holder of the Allowed GPH Claim  pursuant to the Plan,  will  represent,  in the
aggregate,  5% of the  authorized  and  outstanding  shares of New Parent Common
Stock on the Effective Date; provided, however, that the foregoing percentage is
subject to dilution by (i) shares of New Parent  Common Stock issued as a result
of the  exercise of the New  Warrants,  (ii) shares of New Parent  Common  Stock
issued in accordance with the Management Stock Option Plan, and (iii) such other
shares as may be  authorized  and  issued  pursuant  to the  Reorganized  Parent
Charter.

          Cancellation of GPH Notes and Related Instruments. As of the Effective
Date,  all GPH  Notes,  the GPH  Note  Purchase  Agreement  and all  agreements,
instruments and other documents  evidencing the GPH Claims and the rights of the
holder thereof (including,  without  limitation,  the Publishing Notes), and all
liens and  security  interests  securing  the GPH Claims,  shall be canceled and
extinguished, and deemed null and void and of no force and effect (all


                                       51

<PAGE>



without further act or action by any Person),  and all obligations of any Person
under such instruments and agreements  shall be fully and finally  satisfied and
released.

                c.       Class 5 -- TOPrS Claims
                         -----------------------


          Allowance of TOPrS  Claims.  On the Effective  Date,  the TOPrS Claims
shall be deemed Allowed in the aggregate amount of $105 million plus accrued and
unpaid  interest  relating to the period up to but not  including  the  Petition
Date.

          Distributions.  On the Effective Date, each holder of an Allowed TOPrS
Claim shall receive,  in full and final  satisfaction of such Allowed Claim, its
Pro Rata Share of ____ shares of New Parent Common Stock.  The New Parent Common
Stock  issued to holders of Allowed  TOPrS  Claims  pursuant  to the Plan,  will
represent,  in the  aggregate,  50.0% of the  outstanding  shares of New  Parent
Common  Stock on the  Effective  Date;  provided,  however,  that the  foregoing
percentage  is subject to  dilution  by (i)  shares of New Parent  Common  Stock
issued as a result  of the  exercise  of the New  Warrants,  (ii)  shares of New
Parent Common Stock issued in accordance with the Management  Stock Option Plan,
and (iii) such other  shares as may be  authorized  and issued  pursuant  to the
Reorganized Parent Charter.

          Cancellation of TOPrS Certificates and Related Instruments.  As of the
Effective Date, all TOPrS Certificates and all Convertible  Debentures,  and all
indentures,  agreements, instruments and other documents evidencing TOPrS Claims
and the rights of the holders thereof,  shall be canceled and extinguished,  and
deemed null and void and of no further force and effect (all without further act
or action by any Person), and all obligations of any Person


                                       52

<PAGE>



under such instruments and agreements  shall be fully and finally  satisfied and
released, and the TOPrS Trust shall be deemed dissolved.

                 d.       Class 7 -- Debt Securities Rescission or Damage Claims
                          ------------------------------------------------------

          Subject to the  releases  contained  in Section 9.1 of the Plan,  each
holder of an Allowed Debt Securities Rescission or Damage Claim shall retain all
proceeds derived from or relating to any litigation instituted by or against any
such  holder or on his behalf  which are  payable  by any entity  other than the
Debtors or Reorganized Debtors (but not any proceeds from any of the property or
assets of the Debtors except  proceeds of insurance  policies  maintained by the
Debtors) but shall receive no other distribution under the Plan.

          Currently,  there is a consolidated  litigation  pending in the United
States District Court for the Southern  District of New York  encaptioned  Kevin
Lemmer v. Golden Books Family Entertainment,  Inc., et al., Case No. 98 CIV 5748
(AGS)  and  Green  Fund  and  Cynthia   Green  Colin  v.  Golden   Books  Family
Entertainment, Inc., et al., Case No. 98 CIV 7072 (AGS) purportedly on behalf of
all  persons  who,  during the period  between  May 13, 1997 and August 4, 1998,
purchased Old Common Stock  Interests or TOPrS  Certificates,  alleging  damages
based on the Debtors'  alleged  dissemination of materially false and misleading
statements regarding, among other things, the Debtors' restructuring program and
the effect of the restructuring on the Debtors' financial condition,  operations
and liquidity.  As of the date hereof,  a class has not been certified in either
action.  The Debtors deny the allegations and have filed a motion to dismiss the
case. The plaintiffs filed an opposition to the Debtors' motion to dismiss. The


                                       53

<PAGE>



plaintiffs are represented by Milberg,  Weiss, Bershad, Hynes & Learach LLP, One
Pennsylvania  Plaza,  New York, New York 10119,  (212)  594-5300,  Attn:  Robert
Wallner, Esq.

                e.       Class 8 -- Old Preferred Stock Interests
                         ----------------------------------------


          On the Effective  Date,  all Old Preferred  Stock  Interests  shall be
canceled,  annulled,  and  extinguished,  and  the  holder  of the  Allowed  Old
Preferred Stock Interests shall receive  two-thirds (2/3) of the New Warrants to
be issued pursuant to the Plan.

                f.       Class 9 -- Old Common Stock Interests
                         -------------------------------------

          Impairment and Voting. Class 9 is impaired by the Plan.  Consequently,
each holder of an Allowed Old Common Stock Interest shall be entitled to vote to
accept or reject the Plan.

          Distributions.  On the Effective  Date, all Old Common Stock Interests
shall be canceled, annulled and extinguished,  and each holder of an Allowed Old
Common Stock  Interest  (including  any such Interest  consisting of accrued and
unpaid  dividends on the Old Preferred  Stock  Interests)  shall receive its Pro
Rata Share of one-third  (1/3) of the New Warrants to be issued  pursuant to the
Plan.


                                       54

<PAGE>



                g.       Class 10 -- Equity Interest Rescission or Damage Claims
                         -------------------------------------------------------

          Impairment and Voting. Class 10 is impaired by the Plan. Consequently,
each holder of an Allowed  Equity  Interest  Rescission or Damage Claim shall be
entitled to vote to accept or reject the Plan.

          Distributions. Subject to the releases contained in Section 9.1 of the
Plan, each holder of an Allowed Equity Interest Rescission or Damage Claim shall
retain all proceeds derived from or relating to any litigation  instituted by or
against any such holder or on his behalf  which are payable by any entity  other
than the Debtors or  Reorganized  Debtors (but not any proceeds  from any of the
property  or  assets  of the  Debtors  except  proceeds  of  insurance  policies
maintained  by the Debtors) but shall  receive no other  distribution  under the
Plan.

          As set forth in more detail in subsection IV.C.3.d.  above, currently,
there is a consolidated  litigation  pending in the United States District Court
for the Southern  District of New York encaptioned  Kevin Lemmer v. Golden Books
Family  Entertainment,  Inc.,  et al., Case No. 98 CIV 5748 (AGS) and Green Fund
and Cynthia Green Colin v. Golden Books Family Entertainment, Inc., et al., Case
No. 98 CIV 7072 (AGS), alleging an Equity Interest Recession or Damages Claim.


                                       55

<PAGE>



D. Description of Transactions to Be Implemented in Connection with the Plan

          1. New Senior Notes
             ----------------

          On the Effective Date, the New Senior Notes will be issued pursuant to
the New Senior  Note  Indenture.  The New Senior  Notes will have the  principal
terms set forth in Section 4.3(d) of the Plan. In addition, the New Senior Notes
will have normal and customary terms for secured indebtedness of this nature and
standard financial covenants and, as set forth in Section IV.3.a. above, will be
guaranteed. A form of the New Senior Note Indenture is included as an exhibit in
the Plan Supplement.

          2. New Warrants
             ------------

          On the Effective  Date, New Warrants  shall be issued  pursuant to the
Warrant  Agreement to purchase  that number of shares of New Parent Common Stock
constituting  5%, on a  fully-diluted  basis,  of the  authorized  shares of New
Parent Common Stock on the Effective Date, provided, however, that the foregoing
percentage  is subject to  dilution  by (i)  shares of New Parent  Common  Stock
issued in accordance with the Management  Stock Option Plan, and (ii) such other
shares as may be  authorized  and  issued  pursuant  to the  Reorganized  Parent
Charter.  The New Warrants shall be exercisable  until the third  anniversary of
the Effective Date at a price of $__________  per share and will have normal and
customary terms for a security of this nature.


                                       56

<PAGE>



          3. Reorganized Debtors' Charters
             -----------------------------


          Upon the Effective Date, the Reorganized Debtors' Charters will become
effective.  The Reorganized  Debtors' Charters,  together with the provisions of
the Plan,  will  provide for the  authorization  and  issuance of the New Senior
Notes,  the New Parent Common Stock and the New Warrants,  a prohibition  on the
issuance of non-voting equity  securities in accordance with Section  1123(a)(6)
of the  Bankruptcy  Code,  and  such  other  provisions  that are  necessary  to
facilitate consummation of the Plan.

          4. Management Stock Option Plan
             ----------------------------

          The Management  Stock Option Plan shall be effective  immediately upon
the Effective Date. The Management  Stock Option Plan shall be a stock incentive
program  and shall  provide for the  issuance  of up to 10%, on a  fully-diluted
basis,  of the shares of New Parent Common Stock as of the Effective Date of the
Plan.  Shares of New Parent Common Stock issued pursuant to the Management Stock
Option Plan shall be allocated as follows:

               a.        Richard E. Snyder (Chief Executive Officer) -- 2%, on a
                         fully-diluted basis, of the shares of New Parent Common
                         Stock  in the form of  restricted  stock to vest 2/3 on
                         the second anniversary of the Effective Date and 1/3 on
                         the  third  anniversary  of the  Effective  Date  (with
                         vesting fully  accelerated  upon a termination  without
                         cause, a termination for good reason, a termination due
                         to death or disability or a change of control).


                                       57

<PAGE>



               b.        Richard K. Collins (Chief  Operating  Officer),  Philip
                         Galanes  (Chief   Administrative   Officer)  and  Colin
                         Finkelstein  (Chief  Financial  Officer)--  Each  shall
                         receive 1%, on a fully-diluted  basis, of the shares of
                         New  Parent  Common  Stock in the form of at the  money
                         stock  options  with an  exercise  price based upon the
                         total equity value of Reorganized  Parent (as set forth
                         in this  Disclosure  Statement)  to vest ratably over a
                         three year period (with vesting fully  accelerated upon
                         a termination  without  cause,  a termination  for good
                         reason,  a termination  due to death or disability or a
                         change of control).

               c.        Other Grants -- 5%, on a  fully-diluted  basis,  of the
                         shares of New Parent Common Stock shall be reserved for
                         option  grants to key employees up to one-half of which
                         is to be determined by the Debtors' current  management
                         or  board to be  issued  as part of the  Debtors'  1999
                         bonus plan to management  not covered by clauses (a) or
                         (b) above,  with the  remainder to be determined by the
                         board of directors of Reorganized Parent.

          5.  Cancellation  and Surrender of Existing  Securities and Agreements
              ------------------------------------------------------------------


          Except as may  otherwise  be  provided in the Plan,  on the  Effective
Date, the promissory  notes,  share  certificates,  bonds and other  instruments
evidencing any Claim or


                                       58

<PAGE>



Equity Interest shall be deemed canceled without further act or action under any
applicable agreement, law, regulation,  order or rule and the obligations of the
Debtors  under the  agreements,  indentures  and  certificates  of  designations
governing  such  Claims  and  Equity  Interests,  as the case  may be,  shall be
discharged and released. In addition, on the Effective Date,  Reorganized Parent
and Richard E. Snyder shall enter into an agreement  providing for Mr.  Snyder's
transfer to Parent of his entire interest in certain shares of Old Parent Common
Stock in full and complete  satisfaction  of  obligations  under a  non-recourse
promissory note to Parent related thereto.

          Each holder of a promissory  note,  share  certificate,  bond or other
instrument  evidencing  a  Claim  or  Equity  Interest,   shall  surrender  such
promissory  note,  share  certificate,  bond or  instrument  to the  Reorganized
Debtors (or their  disbursing  agent),  unless such requirement is waived by the
Reorganized  Debtors.  No distribution of property hereunder shall be made to or
on behalf of any such  holders  unless and until  such  promissory  note,  share
certificate, bond or instrument is received by the Reorganized Debtors (or their
disbursing  agent),  or  the  unavailability  of  such  promissory  note,  share
certificate, bond or instrument is established to the reasonable satisfaction of
the Reorganized  Debtors (or their  disbursing  agent),  or such  requirement is
waived by the  Reorganized  Debtors.  The  Reorganized  Debtors  may require any
holder  that is  unable  to  surrender  or  cause  to be  surrendered  any  such
promissory  notes,  share  certificates,  bonds or  instruments  to  deliver  an
affidavit  of loss and  indemnity  and/or  furnish a bond in form and  substance
(including,  without limitation, with respect to amount) reasonably satisfactory
to the Reorganized Debtors. Any holder that fails within the


                                       59

<PAGE>



later of one year  after the  Effective  Date and the date of  Allowance  of its
Claim or  Equity  Interest  (i) to  surrender  or cause to be  surrendered  such
promissory note, share certificate,  bond or instrument,  (ii) if requested,  to
execute and deliver an affidavit of loss and indemnity  reasonably  satisfactory
to the Reorganized  Debtors (or their disbursing agent), and (iii) if requested,
to furnish a bond reasonably  satisfactory to the Reorganized  Debtors (or their
disbursing  agent),  shall be deemed to have  forfeited  all rights,  Claims and
Causes of Action  against  the  Debtors  and  Reorganized  Debtors and shall not
participate in any distribution hereunder.

          6. Employment Contracts.
             ---------------------

          Except  as  otherwise  provided  in the Plan or as  agreed  among  the
Informal Committees,  the Debtors and the respective employee,  on the Effective
Date,  employment contracts of current employees of the Debtors will be assumed.
On the  Effective  Date,  the current  employment  contract of Richard E. Snyder
shall be deemed canceled and terminated,  and Reorganized  Parent and Mr. Snyder
shall  enter  into  a  new  revised  employment   contract  which  shall  become
automatically  effective on the Effective  Date. The form of such new employment
contract is attached to the  Restructuring  Agreement which is annexed hereto as
Exhibit D.


                                       60

<PAGE>



          7. Registration Rights Agreements
             ------------------------------

          On and after the Effective  Date,  Reorganized  Parent and appropriate
holders of New Senior  Notes and New Parent  Common  Stock  shall  enter into an
appropriate registration rights agreement(s).

          8. Substantive Consolidation
             -------------------------

          Substantive   consolidation   is  an  equitable   right  that  may  be
effectuated  in  Chapter  11 cases  involving  affiliated  debtors.  Substantive
consolidation  involves the pooling and merging of the assets and liabilities of
affiliated debtors.  All of the debtors in the substantively  consolidated group
are treated as if they were a single  corporate and economic entity for purposes
of a Chapter  11 plan.  Consequently,  a  creditor  of one of the  substantively
consolidated debtors is treated as a creditor of the substantively  consolidated
group of debtors,  and, for purposes of the plan, issues of individual corporate
ownership of property and  individual  corporate  liability on  obligations  are
ignored.  Substantive  consolidation of two or more debtors'  estates  generally
results  in the deemed  consolidation  of the  assets  and  liabilities  of such
debtors, the deemed elimination of intercompany claims, multiple and duplicative
creditor  claims,  joint and several  liability  claims and guarantees,  and the
payment of allowed claims from a common fund.

          Pursuant  to  the  Plan,  contemporaneously  with  the  entry  of  the
Confirmation  Order (but subject to the occurrence of the Effective  Date),  the
Debtors' estates shall be substantively consolidated.  In particular,  except as
expressly provided in the Plan, the Debtors


                                       61

<PAGE>



and  Reorganized  Debtors shall continue to maintain  their  separate  corporate
existence  for all purposes  other than the  treatment of Claims under the Plan.
Thus,  on the  Effective  Date:  (i) all assets (and all  proceeds  thereof) and
liabilities of the Debtors shall be deemed merged or treated as though they were
merged into and with the assets and liabilities of Parent, (ii) no distributions
shall be made under the Plan on account of intercompany Claims among the Debtors
and all such  Claims  (including,  without  limitation,  Claims  based  upon the
Publishing  Notes) shall be  eliminated,  (iii) all guarantees of the Debtors of
the obligations of any other Debtor shall be deemed  eliminated and extinguished
so that any Claim against any Debtor and any guarantee  thereof  executed by any
other Debtor and any joint or several  liability of any of the Debtors  shall be
deemed to be one  obligation of the  consolidated  Debtors,  (iv) each and every
Claim filed or to be filed in any of the Chapter 11 Cases shall be deemed  filed
against  the  consolidated  Debtors,  and shall be deemed one Claim  against and
obligation of the  consolidated  Debtors and (v) for purposes of determining the
availability  of the right of set-off under Section 553 of the Bankruptcy  Code,
the  Debtors  shall be  treated  as one  entity  so that,  subject  to the other
provisions  of  Section  553 of the  Bankruptcy  Code,  debts  due to any of the
Debtors  may be  set-off  against  the debts of any of the other  Debtors.  Such
substantive  consolidation  shall not (other  than for  purposes  related to the
Plan) affect (i) the legal and corporate  structures of the Reorganized Debtors,
and (ii) Subsidiary Equity Interests.

          The Debtors believe that  substantive  consolidation is appropriate in
these cases and will  facilitate  confirmation  of the Plan.  Specifically,  the
Debtors' operations and indebtedness are significantly interrelated. The Debtors
also share common management and


                                       62

<PAGE>



have a centralized cash management system.  Therefore,  the Debtors believe that
the substantive  consolidation of their Chapter 11 cases is warranted and in the
best interest of the Debtors' creditors, shareholders and estates.

E. Funding for the Plan

          The  funds  utilized  to make Cash  payments  under the Plan have been
and/or will be generated from, among other things, the operation of the Debtors'
businesses,  asset  dispositions,  and borrowing under the  Post-Effective  Date
Financing Facility.

F. Description of Other Provisions of the Plan

          1. Disputed Claims
             ---------------

          The Plan provides that with respect to any Disputed  Claims and Equity
Interests,  for the purposes of effectuating  the provisions of the Plan and the
distributions to holders of Allowed Claims and Equity Interests,  the Bankruptcy
Court, on or prior to the Effective Date or such date or dates thereafter as the
Bankruptcy  Court shall set,  may fix or liquidate  the amount of such  Disputed
Claims and Equity  Interests  pursuant to Section 502(c) of the Bankruptcy Code,
in which  event the amounts so fixed or  liquidated  shall be deemed the maximum
amounts of the Disputed Claims and Equity  Interests  pursuant to Section 502(c)
of the Bankruptcy Code for purposes of distribution under the Plan.


                                       63

<PAGE>



          When a Disputed Claim or Equity  Interest  becomes an Allowed Claim or
Equity Interest,  the Reorganized Debtors shall distribute to the holder of such
Allowed Claim or Equity Interest,  the property  distributable to such holder as
provided in the Plan.

          2. Disputed Payments
             -----------------

          The Plan provides  that in the event of any dispute  between and among
holders of Claims or Equity  Interests and/or the holders of a Disputed Claim or
Equity  Interest  as to the right of any Person to receive or retain any payment
or  distribution  to be made to such  Person  under  the Plan,  the  Reorganized
Debtors  may, in lieu of making such  payment or  distribution  to such  Person,
instead  hold  such  payment  or  distribution,   without  interest,  until  the
disposition thereof shall be determined by a Final Order of the Bankruptcy Court
or other court with appropriate jurisdiction.

          3. Unclaimed Property
             ------------------

          Any  distributions  under the Plan that are  unclaimed for a period of
one  year  after  distribution  thereof  shall  revert  and be  revested  in the
Reorganized  Debtors,  and any  entitlement of any holder of any Claim or Equity
Interest to such  distributions  shall be forfeited,  extinguished,  and forever
barred.

          4. Issuance of New Securities
             --------------------------

          The Reorganized  Debtors shall  authorize the issuance,  in accordance
with 1the  terms of the Plan,  of  approximately  ________  shares of New Parent
Common Stock, the New


                                       64

<PAGE>



Senior Notes and _______ New Warrants.  On the Effective  Date,  the Debtor will
transmit written  instructions  regarding the surrender of Old Senior Notes, Old
Preferred Stock Interests,  and Old Common Stock Interests, and the distribution
of shares of New Parent Common Stock and New Warrants to those parties  entitled
to distributions  thereof pursuant to the Plan.  Reorganized Parent will use its
reasonable  best efforts to cause the New Parent Common Stock and the New Senior
Notes to be listed for trading on a national  securities  exchange or the NASDAQ
National  Market  System.  All  shares of New Parent  Common  Stock to be issued
pursuant to the Plan (including,  without  limitation,  upon exercise of the New
Warrants) shall be, upon issuance,  fully paid and non-assessable,  and shall be
subject to dilution  only as may be  expressly  set forth in this Plan or in the
Plan Documents, and the holders thereof shall have no preemptive or other rights
to subscribe for additional shares.

          5. Discharge
             ---------

          Except  as  otherwise  expressly  provided  in  Section  1141  of  the
Bankruptcy  Code  or  the  Plan,  the  distributions  made  pursuant  to  and in
accordance with the applicable  terms and conditions of the Plan are in full and
final satisfaction,  settlement, release and discharge as against the Debtors of
any debt that arose before the Effective  Date, and any debt of a kind specified
in Section 502(g),  502(h), or 502(i) of the Bankruptcy Code, and all Claims and
Equity  Interests of any nature,  including,  without  limitation,  any interest
accrued thereon from and after the Petition Date,  whether or not (i) a proof of
Claim or Equity  Interest based on such debt,  obligation or equity  interest is
filed or deemed filed under Section 501 of the Bankruptcy  Code, (ii) such Claim
or Equity Interest is Allowed under Section 502 of the Bankruptcy Code or


                                       65

<PAGE>



(iii)  the  holder of such  Claim or  Equity  Interest  has  accepted  the Plan;
provided,  however,  that the foregoing  discharge  shall not apply to rights of
holders of Rescission or Damage Claims, and Indemnification  Claims arising from
or related thereto, to pursue such claims against the Debtors solely to obtain a
right or recovery against any applicable insurance coverage of the Debtors or to
seek indemnification,  all as otherwise provided by Section 7.3 of the Plan (but
not to enforce a judgment on any other  property  of the Debtors or  Reorganized
Debtors).

          6.  Termination  of  Subordination  Rights and  Settlement
              of Related Claims and Controversies
              ------------------------------------------------------


          The  classification  and  manner of  satisfying  all Claims and Equity
Interests  under the Plan take into  consideration  all  contractual,  legal and
equitable  subordination  rights,  whether  arising under general  principles of
equitable  subordination,  Sections  510(b)  and (c) of the  Bankruptcy  Code or
otherwise,  that a holder of a Claim or Equity  Interest may have against  other
Claim or Equity Interest holders with respect to any distribution  made pursuant
to the  Plan.  On the  Effective  Date,  all  contractual,  legal  or  equitable
subordination  rights that a holder of a Claim or Equity  Interest may have with
respect to any  distribution to be made pursuant to the Plan shall be discharged
and terminated, and all actions related to the enforcement of such subordination
rights  shall be  permanently  enjoined and  distributions  pursuant to the Plan
shall  not  be  subject  to  payment  to  a  beneficiary   of  such   terminated
subordination rights, or to levy, garnishment, attachment or other legal process
by any beneficiary of such terminated subordination rights.


                                       66

<PAGE>



          Pursuant  to  Bankruptcy  Rule  9019,  and in  consideration  for  the
distributions  and other benefits provided under the Plan, the provisions of the
Plan shall  constitute a good faith  compromise  and settlement of all claims or
controversies  relating  to  the  termination  of  all  contractual,  legal  and
equitable  subordination  rights that a holder of a Claim or Equity Interest may
have with  respect to any  Allowed  Claim or  Allowed  Equity  Interest,  or any
distribution  to be made on  account of an  Allowed  Claim or an Allowed  Equity
Interest.  The entry of the  Confirmation  Order shall constitute the Bankruptcy
Court's  approval  of the  compromise  or  settlement  of  all  such  claims  or
controversies,  and the  Bankruptcy  Court's  finding  that such  compromise  or
settlement  is in the best  interests  of the Debtors,  Reorganized  Debtors and
their  respective  property  and holders of Claims and Equity  Interests  and is
fair, equitable and reasonable.

          7. Additional Releases
             -------------------

          Without  limiting the provisions of Section 9.2 of the Plan and except
as otherwise  provided in the Plan, as of the Effective  Date, in  consideration
for, and as part of the treatment  afforded to, the holders of Claims and Equity
Interests  under the Plan,  and for other  valuable  consideration,  each of the
Released  Parties  shall be deemed  forever  released from any and all Causes of
Action that any Person may have asserted,  could have asserted,  or could in the
future  assert,  directly or  indirectly,  against any of the  Released  Parties
relating  to the  Debtors or the  Chapter 11 Cases on or prior to the  Effective
Date,  provided,  however,  that the  foregoing  release  shall not apply to (i)
Causes of Action  that  arise from  obligations  or rights  created  under or in
connection  with the Plan or any agreement  provided for or  contemplated in the
Plan, and


                                       67

<PAGE>



(ii) the rights of holders of  Rescission or Damage Claims to pursue such claims
against  present  or former  officers  and  directors  of the  Debtors  as named
defendants in litigations respecting such Rescission or Damage Claims solely for
purposes of preserving or obtaining a right of recovery  against any  applicable
insurance  coverage  of the  Debtors  but not to enforce a judgment  against any
property of any present or former  officers and directors of the Debtors  except
to the extent of the  insurance  proceeds of the Debtors and any other  proceeds
made available under the  indemnification  rights as provided for in Section 7.3
of the Plan.

          Except as, and only to the extent  provided  otherwise in the Plan, as
of the Effective Date, each of the Released Parties forever releases, waives and
discharges  all known and  unknown  Causes  of  Action of any  nature  that such
Released  Party has,  had or may have against any other  Released  Party for all
acts and omissions related to the Debtors arising from or related to the Chapter
11 Cases through the Effective Date, other than Causes of Action that arise from
obligations  or  rights  created  under  or in  connection  with the Plan or any
agreement provided for or contemplated in the Plan.

          8. Injunctions
             -----------

          As of the Effective  Date and subject to its  occurrence,  all Persons
that have held,  currently  hold or may have asserted a Claim, a Cause of Action
or other debt, or liability, or an Equity Interest or other right of a holder of
an Equity  Interest that is discharged,  released or terminated  pursuant to the
Plan, are permanently  enjoined from commencing or continuing,  in any manner or
in any place, any action or other proceeding,  enforcing,  attaching, collecting
or


                                       68

<PAGE>



recovering  in any  manner  any  judgment,  award,  decree or  order,  creating,
perfecting or enforcing any lien or encumbrance,  asserting a set-off,  right or
subrogation or recoupment of any kind against any debt,  liability or obligation
due to any such releasing Person,  and from commencing or continuing any action,
in any manner or in any place  where the  foregoing  does not comply  with or is
inconsistent with the provisions hereof,  provided,  however, that the foregoing
injunctions  shall not apply to rights of the  holders of  Rescission  or Damage
Claims, and  Indemnification  Claims arising from or related thereto,  to pursue
such claims  against any Person that is discharged or released  pursuant to this
plan  solely to obtain a right of  recovery  against  any  applicable  insurance
coverage or to seek  indemnification as otherwise provided by Section 7.3 of the
Plan but not to enforce a judgment  against  any  property of any Person that is
discharged  or released  pursuant to this Plan except to the extent of insurance
proceeds or to seek  indemnification as otherwise provided by Section 7.3 of the
Plan.

          As of the Effective  Date,  except as otherwise  provided in the Plan,
all Persons are  permanently  enjoined  from  commencing or  continuing,  in any
manner or in any  place,  any  action  or other  proceeding,  whether  directly,
derivatively or otherwise against any or all of the Released Parties, on account
of or respecting  any claims,  debts,  rights,  Causes of Action or  liabilities
released  or  discharged  pursuant to the Plan,  except to the extent  expressly
permitted under the Plan.

          Without limitation to the scope, extent, validity or enforceability of
the injunctive  relief set forth in the Plan and in the  Confirmation  Order, by
accepting distributions pursuant to the Plan, each holder of an Allowed Claim or
Equity Interest receiving distributions pursuant to


                                       69

<PAGE>



the Plan  is deemed to have  specifically  consented to the releases and injunc-
tions set forth in the Plan.

          9. Exculpation 
             -----------

          Pursuant to the Plan, neither the Debtors,  Reorganized  Debtors,  the
Informal  Committees,  any official  committee  of creditors  appointed in these
cases,  or GPH,  nor  any of  their  respective  members,  officers,  directors,
employees,  advisors,  agents or Professionals shall have or incur any liability
to any  holder  of a  Claim  or  Equity  Interest  for any  act or  omission  in
connection  with,  related  to, or  arising  out of, the  Chapter 11 Cases,  the
preparation or formulation of the Plan, the pursuit of confirmation of the Plan,
the consummation of the Plan or the  administration  of the Plan or the property
to be  distributed  under the  Plan,  except  for  willful  misconduct  or gross
negligence,  and, in all respects, the Debtors,  Reorganized Debtors and each of
their respective members, officers, directors,  employees,  advisors, agents and
Professionals  shall be entitled to rely upon the advice of counsel with respect
to their duties and  responsibilities  under the Plan; provided,  however,  that
nothing  in the Plan  shall,  or shall be deemed  to,  release  the  Debtors  or
Reorganized  Debtors from, or exculpate the Debtors or Reorganized  Debtors with
respect to, their  respective  obligations or covenants  arising pursuant to the
Plan.

          10. Section 1146 Exemption
              ----------------------

          In accordance  with Section  1146(c) of the  Bankruptcy  Code, (a) the
issuance,  transfer or exchange of any security  under the Plan or the making or
delivery of any instrument


                                       70

<PAGE>



of transfer pursuant to, in  implementation  of, or as contemplated by the Plan,
including any merger agreements or agreements of consolidation,  deeds, bills of
sale  or  assignments  executed  in  connection  with  any of  the  transactions
contemplated  under the Plan, or the revesting,  transfer or sale of any real or
personal  property  of the  Debtors  pursuant  to, in  implementation  of, or as
contemplated  by the  Plan,  (b) the  making,  delivery,  creation,  assignment,
amendment or recording of any note or other  obligation for the payment of money
or any mortgage,  deed of trust or other security interest under, in furtherance
of, or in connection  with the Plan,  the  issuance,  renewal,  modification  or
securing  of  indebtedness  by  such  means,  and (c) the  making,  delivery  or
recording of any deed or other  instrument of transfer under, in furtherance of,
or in connection with, the Plan, including, without limitation, the Confirmation
Order, shall not be subject to any document recording tax, stamp tax, conveyance
fee or other  similar tax,  mortgage tax,  real estate  transfer  tax,  mortgage
recording tax or other similar tax or governmental  assessment.  Consistent with
the foregoing,  each recorder of deeds or similar official for any county,  city
or governmental unit in which any instrument  hereunder is to be recorded shall,
pursuant  to the  Confirmation  Order,  be ordered  and  directed to accept such
instrument,  without  requiring the payment of any  documentary  stamp tax, deed
stamps, stamp tax, transfer tax, intangible tax or similar tax.

          11. Full and Final Satisfaction
              ---------------------------

          Pursuant to the Plan, all payments and all  distributions  shall be in
full and final satisfaction, settlement, release and discharge of all Claims and
Equity Interests, except as otherwise provided in the Plan.


                                       71

<PAGE>


          12. Cram-Down
              ---------

          If any  impaired  Class  entitled to vote shall not accept the Plan by
the  requisite  majorities  provided  in  Sections  1126(c)  or  1126(d)  of the
Bankruptcy  Code as  applicable,  or if any  impaired  Class is  deemed  to have
rejected  the Plan,  the Debtors  reserve the right (a) to undertake to have the
Bankruptcy  Court confirm the Plan under Section  1129(b) of the Bankruptcy Code
and (b) to amend the Plan in accordance with the Plan to the extent necessary to
obtain entry of the Confirmation Order.

          13.    Disbursement    of   Funds   and   Delivery   of   Distribution
                 ---------------------------------------------------------------

          Subject to  Bankruptcy  Rule 9010,  all  distributions  under the Plan
shall be made by the  Reorganized  Debtors  (or their  disbursing  agent) to the
holder of each  Allowed  Claim at the  address  of such  holder as listed on the
Schedules as of the Distribution  Record Date, unless the Debtors or Reorganized
Debtors have been notified in writing of a change of address, including, without
limitation,  by the  filing of a proof of claim or notice of  transfer  of claim
filed by such holder that provides an address for such holder different from the
address reflected on the Schedules.

          Any  payment  of  Cash  made  by the  Reorganized  Debtors  (or  their
disbursing  agent)  pursuant  to the  Plan  shall  be made by  check  drawn on a
domestic bank.

          Any  payment or  distribution  required to be made under the Plan on a
day other than a Business Day shall be made on the next succeeding Business Day.


                                       72

<PAGE>



          Whenever any payment of a fraction of a cent would otherwise be called
for, the actual payment shall reflect a rounding of such fraction to the nearest
whole cent (rounding down in the case of .50 or less and rounding up in the case
of more than .50).

          No fractional  shares of New Parent Common Stock or New Warrants shall
be distributed  under the Plan.  Fractional  interests shall be combined into as
many whole shares of New Parent  Common Stock or New  Warrants,  as the case may
be, as  possible  and shall be  redistributed  to  holders  of Claims and Equity
Interests (as applicable) with fractional interests,  in descending order, until
all  such  whole  shares  of  New  Parent  Common  Stock  or  New  Warrants  are
distributed.

          As of the close of  business  on the  Distribution  Record  Date,  the
claims  register  (for Claims) and the transfer  ledgers (for Old Senior  Notes,
TOPrS  Certificates and Equity Interests) shall be closed, and there shall be no
further  changes in the record  holders of any Claims or Equity  Interests.  The
Debtors,  Reorganized Debtors and the respective  indenture trustees for all the
Old  Senior  Notes and TOPrS  Certificates,  as the case may be,  shall  have no
obligation to recognize any transfer of any Claims or Equity Interests occurring
after the close of business on the  Distribution  Record Date, and shall instead
be entitled to recognize and deal for all purposes  under the Plan (except as to
voting to accept or reject the Plan  pursuant  to Section  6.1 of the Plan) with
only those  holders of record as of the close of  business  on the  Distribution
Record Date.


                                       73

<PAGE>



          Except  as  to  applications   for  allowances  of  compensation   and
reimbursement  of expenses  under  Sections 330 and 503 of the  Bankruptcy  Code
(with respect to which  procedures  respecting  objections  shall be governed by
Section 2.1(b) of the Plan and the Confirmation Order or other Final Order), the
Debtors or Reorganized  Debtors shall have the exclusive  right to make and file
objections  to  Administrative  Expense  Claims,  Claims  and  Equity  Interests
subsequent to the Confirmation  Date. All objections shall be litigated to Final
Order; provided,  however, that the Reorganized Debtors shall have the authority
to compromise,  settle, otherwise resolve or withdraw any objections, subject to
approval of the Bankruptcy  Court.  Unless  otherwise  ordered by the Bankruptcy
Court,  the  Debtors  or  Reorganized  Debtors  shall  file  all  objections  to
Administrative  Expense  Claims  that  are the  subject  of  proofs  of claim or
requests for payment filed with the  Bankruptcy  Court (other than  applications
for allowances of compensation and reimbursement of expenses), Claims and Equity
Interests  and serve  such  objections  upon the  holder  of the  Administrative
Expense  Claim,  Claim or Equity  Interest as to which the  objection is made as
soon as is  practicable,  but in no event later than 60 days after the Effective
Date or such later date as may be approved by the Bankruptcy Court.

          14. Avoidance and Recovery Actions
              ------------------------------

          As of and subject to the occurrence of the Effective Date, the Debtors
and the Reorganized  Debtors, for and on behalf of themselves and their Estates,
will waive and release any of the Causes of Action under Sections 510, 544, 547,
548, 550 and 553 of the Bankruptcy Code.


                                       74

<PAGE>



          15. Retention of Jurisdiction
              -------------------------

          The Bankruptcy Court shall have exclusive  jurisdiction of all matters
arising out of, and related to, the Chapter 11 Cases and the Plan  pursuant  to,
and for the purposes of,  Sections  105(a) and 1142 of the  Bankruptcy  Code and
for, among other things, the following purposes:

               
               (a) to hear and determine any and all objections to the allowance
of any  Claims or any  controversies  as to the  classification  of any  Claims,
provided that only Debtors may file objections to Claims;

               (b) to  hear  and  determine  any and  all  applications  by Pro-
fessionals for compensation and reimbursement of expenses;

               (c) to hear and  determine any and all pending  applications  for
the rejection and disaffirmance of executory contracts and unexpired leases, and
fix and allow any Claims resulting therefrom;

               (d) to liquidate any Disputed Claim;

               (e)  to  enforce  the  provisions  of  the  Plan,  including  the
injunction, exculpation and releases provided for in the Plan;

               (f) to enable the Debtors to prosecute  any and all proceed- ings
which have been or may be brought prior to the Effective Date to set aside liens
or encumbrances and


                                       75

<PAGE>

to recover any transfers,  assets,  properties,  or damages to which the Debtors
may be  entitled  under  applicable  provisions  of the  Bankruptcy  Code or any
federal state, or local laws;

               (g) to correct any defect,  cure any  omission,  or reconcile any
inconsistency  in the Plan or in the  Confirmation  Order as may be necessary to
carry out its purpose and the intent of the Plan;

               (h) to determine  any Claim or liability to a  governmental  unit
which may be asserted as a result of the transactions contemplated herein;

               (i) to hear and determine matters  concerning  state,  local, and
federal  taxes in accordance  with Sections 346, 505 and 1146 of the  Bankruptcy
Code; and

               (j) to determine such other matters as may be provided for in the
Confirmation  Order  or as  may  be  authorized  under  the  provisions  of  the
Bankruptcy Code.

          16.      Executory Contracts and Unexpired Leases
                   ----------------------------------------

          Any  unexpired  lease  or  executory  contract  that  has not been ex-
pressly  rejected  by the  Debtors or  treated  in the Plan with the  Bankruptcy
Court's  approval  on or  prior  to  the  Confirmation  Date  shall,  as of  the
Confirmation  Date (subject to the occurrence of the Effective  Date), be deemed
to have  been  assumed  by the  Debtors  unless  there  is  pending  before  the
Bankruptcy  Court on the  Confirmation  Date a motion to reject  such  unexpired
lease or executory  contract or such  executory  contract or unexpired  lease is
otherwise  designated for  rejection;  provided that (a) such lease or executory
contract is ultimately rejected and (b) the


                                       76

<PAGE>



filing of the  Confirmation  Order shall be deemed to be a rejection of all then
outstanding   unexercised  stock  options,   warrants  and  similar  rights.  In
accordance with Section  1123(a)(5)(G)  of the Bankruptcy Code, on the Effective
Date, or as soon as practicable  thereafter,  the Reorganized Debtors shall cure
all defaults under any executory contract or unexpired lease assumed pursuant to
the Plan by making a Cash payment in an amount agreed to between the Reorganized
Debtors and the claimant, or as otherwise fixed pursuant to a Final Order.

     17.        Bar Date for Filing Proofs of Claims Relating to Executory
                Contracts and Unexpired Leases Rejected Pursuant to the Plan
                ------------------------------------------------------------

          Claims  arising  out of the  rejection  of an  executory  contract  or
unexpired lease designated for rejection pursuant to the Confirmation Order must
be filed with the Bankruptcy Court and/or served upon the Debtors or Reorganized
Debtors or as otherwise  may be provided in the  Confirmation  Order by no later
than 30 days after the notice of entry of an order approving such rejection. Any
Claims not filed within such time will be forever barred from assertion  against
the Debtors,  their estates, the Reorganized Debtors and their property, and the
holders  thereof  shall not be  entitled to any  distribution  under the Plan or
otherwise from the Debtors or Reorganized  Debtors.  Unless otherwise ordered by
the  Bankruptcy  Court,  all Claims  arising  from the  rejection  of  executory
contracts  and  unexpired  leases shall be treated as General  Unsecured  Claims
under the Plan.


                                       77

<PAGE>

          18. Indemnification Claims
              ----------------------

               (a)  Notwithstanding  anything to the contrary  contained herein,
all Persons holding or asserting  Indemnification  Claims (whether directly,  by
subrogation  or  otherwise)  shall be entitled to obtain  recovery on account of
such Claims solely from the proceeds of any applicable  directors' and officers'
insurance policy maintained by the Debtors or Reorganized  Debtors,  as the case
may be, and shall not, under any circumstances, be entitled to obtain a recovery
in  respect  of  such  Indemnification  Claims  from  the  Reorganized  Debtors;
provided,  however,  that the Reorganized  Debtors shall remain responsible for,
and shall pay, in respect of any and all  Indemnification  Claims, all retention
amounts and coinsurance obligations arising under, or necessary to maintain, its
directors' and officers' insurance policies. The Debtors or Reorganized Debtors,
as the  case  may  be,  shall  continue  and  maintain  all  presently  existing
directors' and officers' insurance policies,  and all such policies shall remain
in full force and effect following Confirmation.  The Debtors shall maintain any
prior directors' and officers' insurance policies and renew existing policies as
they expire at comparable or greater coverage levels.

               (b) As set forth in  Section  7.3(b)  of the  Plan,  in the event
that:  (i) the  Bankruptcy  Court does not  approve  any or all of the  material
provisions of Article 9 of the Plan (i.e.,  releases and injunctions),  and (ii)
the Plan is not terminated pursuant to Section 12.5


                                       78

<PAGE>


thereof,  then all  Indemnification  Claims shall be assumed by the  Reorganized
Debtors without limitation.9

          19. Compensation and Benefit Programs
              ---------------------------------

          Except as otherwise provided in the Plan, all employment and severance
practices and policies and all  compensation  and benefit plans,  policies,  and
programs of the Debtors  applicable to their  directors,  officers or employees,
including,  without limitation, all savings plans, retirement plans, health care
plans,  severance benefit plans, incentive plans, workers' compensation programs
and life,  disability and other  insurance plans are treated either as executory
contracts  pursuant to Section 7.1 of the Plan or as permitted under  applicable
non-bankruptcy law.

          Included in the foregoing compensation and benefit plans to be assumed
pursuant to the Plan is the Debtors'  1999 Bonus Plan.  Pursuant to the Debtors'
1999 Bonus Plan,  senior and certain middle level  management of the Debtors are
eligible to receive a bonus if certain  performance  targets are obtained by the
Debtors.  Such  participants  are classified  into one of five groups,  based on
employment  position,  and, depending on the group in which they are classified,
are  eligible  to receive  bonuses in varying  percentages  of their base salary
depending  upon the level of  operating  performance  achieved.  


--------  
9         The Informal  Committees,  under the Plan, have the right to cause the
          Plan to not become  effective if Section  7.3(b) is made  relevant and
          enforceable, and have advised the Debtors that, as of the date hereof,
          they would cause the Plan to not become effective in such event.


                                       79

<PAGE>

          20. Retiree Benefits
              ----------------

          Payment  of any  Retiree  Benefits  shall be  continued  solely to the
extent,  and for the duration of the period,  the Debtors are  contractually  or
legally obligated to provide such benefits, subject to any and all rights of the
Debtors under applicable law.

          21. Post-Confirmation Fees, Final Decree
              ------------------------------------

          The  Reorganized  Debtor shall be  responsible  for the payment of any
post-confirmation fees due pursuant to 28 U.S.C.ss. 1930(a)(6) and the filing of
post-confirmation reports, until a final decree is entered. A final decree shall
be entered as soon as practicable after  distributions  have commenced under the
Plan.

          22. Continuation of Bankruptcy Injunction or Stays
              ----------------------------------------------

          All  injunctions  or stays  provided for in the Chapter 11 Cases under
Sections 105 or 362 of the  Bankruptcy  Code, or otherwise,  and in existence on
the Confirmation Date, shall remain in full force and effect until the Effective
Date.

          23. Revesting of Assets
              -------------------

          Except as otherwise  provided by the Plan,  upon the  Effective  Date,
title to all  properties  and  assets  dealt  with by the Plan shall pass to the
Reorganized  Debtors  free and  clear of all  Claims,  Liens,  encumbrances  and
interests of creditors  and of equity  security  holders  (except  those Claims,
Liens, encumbrances and interests created pursuant to this Plan) and the


                                       80

<PAGE>



Confirmation   Order  shall  be  a  judicial   determination  of  discharge  and
extinguishment  of all Claims,  Liens or Equity Interests  (except those created
pursuant to this Plan).

          24. General Release of Liens
              ------------------------

          Except as otherwise  provided in the Plan in  connection  with the New
Senior Notes and the Post-Effective Date Financing Facility, or in any contract,
instrument,  indenture or other agreement or document created in connection with
the Plan or the  implementation  thereof,  on the Effective Date, all mortgages,
deeds of  trust,  liens or other  security  interests  against  property  of the
Estates are released and extinguished,  and all the right, title and interest of
any holder of such mortgages,  deeds of trust, liens or other security interests
will revert to the  Reorganized  Debtors as  applicable,  and the successors and
assigns thereof.

          25. Conditions to Effective Date of the Plan
              ----------------------------------------

          The Plan shall not  become  effective  unless and until the  following
conditions  shall have been satisfied or waived  pursuant to Section 10.3 of the
Plan:

               (a) the  Confirmation  Order  and the  Substantive  Consolidation
Order, in form and substance reasonably  acceptable to the Debtors, GPH, and the
Informal Committees, shall have been entered contemporaneously by the Bankruptcy
Court and shall have become a Final Order;

               (b) the Reorganized  Debtors shall have credit availability under
the Post-Effective  Date Financing  Facility to provide the Reorganized  Debtors
with financing


                                       81

<PAGE>



sufficient  to meet their  Cash  obligations  under the Plan and their  business
requirements as of and after the Effective Date;

               (c) each of the Plan  Documents  and the New Parent Common Stock,
New Senior Notes and New Warrants,  in form and substance reasonably  acceptable
to the Debtors,  GPH, and the Informal  Committees,  shall have been effected or
executed  and  delivered  and the New Common  Stock,  New  Senior  Notes and New
Warrants shall be validly issued and outstanding; and

               (d) if  the  Indemnification  Claims  are  to be  assumed  by the
Reorganized Debtors pursuant to Section 7.3(b) hereof or otherwise, then each of
the Informal Committees shall have consented to such assumption; and

               (e) all actions,  other  documents  and  agreements  necessary to
implement the Plan shall have been effected or executed and delivered.

          In the event that one or more of the  conditions  specified in Section
10.1 of the Plan have not occurred on or before 120 days after the  Confirmation
Date, upon notification submitted by the Debtors to the Bankruptcy Court (a) the
Confirmation Order shall be vacated,  (b) no distributions  under the Plan shall
be made, (c) the Debtors and all holders of Claims and Equity Interests shall be
restored  to the  status  quo  ante  as of the  day  immediately  preceding  the
Confirmation  Date as though the  Confirmation  Date never  occurred and (d) the
Debtors'  obligations  with  respect to the Claims  and Equity  Interests  shall
remain  unchanged and nothing  contained  herein shall constitute or be deemed a
waiver or release of any Claims or Equity


                                       82

<PAGE>



Interests  by or against the Debtors or any other  Person or to prejudice in any
manner  the  rights of the  Debtors  or any  Person in any  further  proceedings
involving the Debtors.

          Upon written  consent of each of the Informal  Committees and GPH, the
Debtors may waive,  by a writing signed by an authorized  representative  of the
Debtors and  subsequently  filed with the Bankruptcy  Court,  one or more of the
conditions precedent to effectiveness of the Plan as set forth above.

G. Post-Confirmation Officers and Directors


          The  officers  of the  respective  Debtors  immediately  prior  to the
Effective Date shall serve as the initial officers of the respective Reorganized
Debtors  on and  after  the  Effective  Date.  Set  forth  below  is  the  name,
compensation and position of Reorganized  Parent's key officers on the Effective
Date.


                                       83

<PAGE>


                                                             Post-Confirmation
      Name                    Title                          Base Salary
      ----                    -----                          -----------------

Richard E. Snyder        Chairman of the Board and               $750,000
                         Chief Executive Officer

Philip Galanes           Executive Vice President,               $350,000
                         Chief Administrative Officer,
                         General Counsel and
                         Secretary

Richard K. Collins       Executive Vice President,               $350,000
                         and Chief Operating Officer

Colin Finkelstein        Executive Vice President and            $300,000
                         Chief Financial Officer


          In addition to the post-confirmation base salary set forth above, such
officers (and certain other  employees)  will also be entitled to participate in
the  Debtors'  1999  Bonus  Plan as set forth in Section  IV.F.19.  hereof.  The
initial  members of the  post-Confirmation  board of  directors  of  Reorganized
Parent shall  consist of the  following:  (i) Richard E. Snyder,  (ii) three (3)
members  selected by the Informal TOPrS  Committee,  and (iii) three (3) members
selected by the Informal Senior Note Committee;  provided, however, that (i) the
nominees of each Informal Committee shall be reasonably  acceptable to the other
Informal  Committee,  and (ii) each of the nominees of the  Informal  Committees
shall be discussed,  prior to formal nomination,  among the Informal  Committees
and current  management  of the Debtors.  The  designation  of the board members
selected by the Informal  Committees,  along with the  designation  of the board
members for Reorganized  Publishing and Reorganized  Video,  shall be filed with
the Bankruptcy Court on


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or prior to the  commencement  date of the Confirmation  Hearing,  or such later
date as the Bankruptcy Court may establish.


                                       V.

                     ACCEPTANCE AND CONFIRMATION OF THE PLAN

          The following is a brief summary of the  provisions of the  Bankruptcy
Code respecting acceptance and confirmation of a plan of reorganization. Holders
of Claims and Equity Interests are encouraged to review the relevant  provisions
of the Bankruptcy Code and/or to consult their own attorneys.

A.   Acceptance of the Plan

          This   Disclosure   Statement  is  provided  in  connection  with  the
solicitation of acceptances of the Plan. The Bankruptcy Code defines  acceptance
of a plan of  reorganization by a class of Claims as acceptance by holders of at
least  two-thirds in dollar  amount,  and more than  one-half in number,  of the
allowed  Claims of that  class  that have  actually  voted or are deemed to have
voted to accept or reject a plan.  The Bankruptcy  Code defines  acceptance of a
plan of  reorganization  by a class  of  interests  as  acceptance  by at  least
two-thirds  in amount of the allowed  interests of that class that have actually
voted or are deemed to have voted to accept or reject a plan.

          If one or more impaired  Classes rejects the Plan, the Debtors may, in
their  discretion,  nevertheless  seek  confirmation  of the Plan if the Debtors
believe that they will be


                                       85

<PAGE>

able to meet the  requirements  of Section  1129(b) of the  Bankruptcy  Code for
Confirmation of the Plan (which are set forth below), despite lack of acceptance
by all impaired classes.

B.   Confirmation

          1. Confirmation Hearing
             --------------------

          Section 1128(a) of the Bankruptcy Code requires the Bankruptcy  Court,
after  notice,  to hold a  hearing  on  confirmation  of a plan.  Notice  of the
Confirmation  Hearing  of the Plan has been  provided  to all known  holders  of
Claims and Equity Interest or their  representatives  along with this Disclosure
Statement.  The  Confirmation  Hearing may be adjourned from time to time by the
Bankruptcy  Court  without  further  notice  except for an  announcement  of the
adjourned  date made at the  Confirmation  Hearing or any  subsequent  adjourned
Confirmation Hearing.

          Section  1128(b) of the  Bankruptcy  Code  provides  that any party in
interest may object to  confirmation of a plan. Any objection to Confirmation of
the Plan must be in writing,  must  conform  with the  Bankruptcy  Rules and the
Local Rules of the Bankruptcy  Court,  must set forth the name of the objectant,
the nature  and amount of Claims or Equity  Interests  held or  asserted  by the
objectant  against  the  Debtors'  Estates  or  property,  and the basis for the
objection and the specific  grounds in support  thereof.  Such objection must be
filed with the Bankruptcy Court, with a copy forwarded  directly to the Chambers
of the Honorable Tina L. Brozman,  together with proof of service  thereof,  and
served upon (a) counsel to the Debtors,  Proskauer Rose LLP, 1585 Broadway,  New
York, New York 10036, Attn: Alan B. Hyman, Esq.; Scott K.


                                       86

<PAGE>



Rutsky,  Esq.,  (b) counsel to the  Informal  Senior Note  Committee,  Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038-4982,  Attn: Fred
S. Hodara, Esq., (c) counsel to the Informal TOPrS Committee,  Cleary, Gottlieb,
Steen & Hamilton, One Liberty Plaza, New York, New York 10006-1470,  Attn: James
E.  Millstein,  Esq.,  and (d) counsel to GPH,  Willkie  Farr &  Gallagher,  787
Seventh Avenue, New York, New York 10019,  Attn: Marc Abrams,  Esq., so as to be
received  no  later  than the date and  time  designated  in the  notice  of the
Confirmation Hearing.

          2. Statutory Requirements for Confirmation of the Plan
             ---------------------------------------------------

          At the  Confirmation  Hearing,  the  Debtors  will  request  that  the
Bankruptcy  Court determine that the Plan satisfies the  requirements of Section
1129 of the Bankruptcy  Code. If so, the  Bankruptcy  Court shall enter an order
confirming  the  Plan.  The  applicable  requirements  of  Section  1129  of the
Bankruptcy Code are as follows:

               (a) The Plan must comply with the  applicable  provisions  of the
Bankruptcy Code;

               (b) The Debtors must have complied with the applicable provisions
of the Bankruptcy Code;

               (c) The Plan has been proposed in good faith and not by any means
forbidden by law;


                                       87

<PAGE>



               (d) Any payment made or promised to be made by the Debtors  under
the Plan for services or for costs and expenses in, or in connection with, these
Chapter  11  cases,  or  in  connection  with  the  Plan  and  incident  to  the
Reorganization  Cases, has been disclosed to the Bankruptcy  Court, and any such
payment made before  Confirmation of the Plan is reasonable,  or if such payment
is to be fixed after  Confirmation  of the Plan,  such payment is subject to the
approval of the Bankruptcy Court as reasonable;

               (e) The Debtors have disclosed the identity and  affiliations  of
any individual proposed to serve, after Confirmation of the Plan, as a director,
officer, or voting trustee of each of the Debtors under the Plan. Moreover,  the
appointment to, or continuance in, such office of such individual, is consistent
with the  interests  of holders of Claims and Equity  Interests  and with public
policy,  and the Debtors  have  disclosed  the  identity of any insider that the
Reorganized  Debtors will employ or retain,  and the nature of any  compensation
for such insider;

               (f) Best Interests of Creditors  Test. With respect to each Class
of impaired Claims or Equity Interests,  either each holder of a Claim or Equity
Interest of such Class has  accepted  the Plan,  or will receive or retain under
the Plan on account of such Claim or Equity Interest, property of a value, as of
the  Effective  Date of the  Plan,  that is not less than the  amount  that such
holder would receive or retain if the Debtors were liquidated on such date under
Chapter 7 of the  Bankruptcy  Code.  In a Chapter 7  liquidation,  creditors and
interest  holders of a debtor are paid from  available  assets  generally in the
following  order,  with no lower class  receiving any payments until all amounts
due to senior classes have either been paid in full


                                       88

<PAGE>



or payment in full is  provided  for:  (i) first to  secured  creditors  (to the
extent of the value of their collateral), (ii) next to priority creditors, (iii)
next to unsecured  creditors,  (iv) next to debt expressly  subordinated  by its
terms or by order of the  Bankruptcy  Court,  and (v) last to  holders of equity
interests.  Attached hereto as Exhibit E is a liquidation  analysis  prepared by
the Debtors.  As set forth  therein,  in light of the  foregoing  priority,  the
Debtors  believe  that if the  Chapter  11 cases were  converted  to a Chapter 7
liquidation,  holders of Old Senior  Note  Claims,  TOPrS  Claims,  GPH  Claims,
General  Unsecured Claims and Equity Interests would receive less than they will
receive under the Plan;

               (g) Each  Class of Claims  or Equity  Interests  has  either  ac-
cepted the Plan or is not impaired under the Plan;

               (h) Except to the extent  that the holder of a  particular  Claim
has agreed to a  different  treatment  of such  Claim,  the Plan  provides  that
Allowed  Administrative  and Priority  Claims  (other than Allowed  Priority Tax
Claims) willbe paid in full on the Effective Date and that Allowed  Priority Tax
Claims will receive on account of such Claims  deferred  Cash  payments,  over a
period not exceeding six years after the date of assessment of such Claim,  of a
value, as of the Effective Date, equal to the Allowed amount of such Claim;

               (i) At least one impaired  class of Claims has accepted the Plan,
determined without including any acceptance of the Plan by any insider holding a
Claim of such Class;


                                       89

<PAGE>


               (j)  Feasibility.  Confirmation  of the Plan is not  likely to be
followed by the liquidation, or the need for further financial reorganization of
the Debtors or any successor to the Debtors under the Plan.  Attached  hereto as
Exhibit F are projections for  approximately  ____ years following  confirmation
and a pro forma balance sheet as of the Effective Date which  demonstrate  that,
given estimated expenses and income, and taking into account cash reserves,  the
Reorganized Debtors will be able to satisfy their obligations under the Plan, as
well as their  obligations  arising in connection  with their  ongoing  business
operations.

          3. Confirmation Without Acceptance by All Impaired Classes
             -------------------------------------------------------

          Section  1129(b) of the Bankruptcy  Code allows a Bankruptcy  Court to
confirm a plan, even if such plan has not been accepted by all impaired  classes
entitled to vote on such plan,  provided  that such plan has been accepted by at
least one impaired class.  If any impaired  classes reject or are deemed to have
rejected the Plan,  the Debtors  reserve their right to seek the  application of
the statutory  requirements  set forth in Section 1129(b) of the Bankruptcy Code
for  Confirmation  of the Plan  despite the lack of  acceptance  by all impaired
classes.

          Section 1129(b) of the Bankruptcy  Code provides that  notwithstanding
the failure of an impaired  class to accept a plan of  reorganization,  the plan
shall be  confirmed,  on request of the  proponent  of the plan,  in a procedure
commonly  known  as  "cram-down,"  so long as the plan  does  not  "discriminate
unfairly"  and is "fair and  equitable"  with respect to each class of Claims or
interests that is impaired under and has not accepted the plan.


                                       90

<PAGE>



          The condition  that a plan be "fair and  equitable"  with respect to a
non-accepting  class of secured Claims  includes the  requirements  that (a) the
holders of such  secured  Claims  retain the liens  securing  such Claims to the
extent of the allowed amount of the Claims,  whether the property subject to the
liens is retained by the debtor or transferred to another entity under the plan,
and (b) each  holder  of a  secured  Claim in the class  receive  deferred  cash
payments  totaling  at least the  allowed  amount of such  Claim  with a present
value, as of the effective date of the plan, at least equivalent to the value of
the secured claimant's interest in the debtor's property subject to the liens.

          The condition  that a plan be "fair and  equitable"  with respect to a
non-accepting class of unsecured Claims includes the requirement that either (a)
such  class  receive  or  retain  under the plan  property  of a value as of the
effective date of the plan equal to the allowed amount of such Claim,  or (b) if
the class does not receive  such amount,  no class  junior to the  non-accepting
class will receive a distribution under the plan.

          The condition  that a plan be "fair and  equitable"  with respect to a
non-accepting  class of equity interests  includes the requirements  that either
(a) the plan  provides  that each  holder of an equity  interest  in such  class
receive or retain under the plan, on account of such equity  interest,  property
of a value,  as of the effective  date of the plan,  equal to the greater of (i)
the allowed amount of any fixed  liquidation  preference to which such holder is
entitled,  (ii) any fixed redemption price to which such holder is entitled,  or
(iii) the value of such  equity  interest,  or (b) if the class does not receive
such amount, no class of equity interests junior to the non-accepting class will
receive a distribution under the plan.


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<PAGE>


                                       VI.

                                    VALUATION

[to be filed with the Bankruptcy Court prior to the hearing to consider approval
of the Disclosure Statement]

                                      VII.

               CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

[to be filed with the Bankruptcy Court prior to the hearing to consider approval
of the Disclosure Statement]

                                      VIII.

                                  RISK FACTORS

          HOLDERS OF OLD SENIOR NOTES, TOPrS CERTIFICATES, GPH NOTES, HOLDERS OF
EQUITY  INTERESTS  AND ALL OTHER  IMPAIRED  CREDITORS  SHOULD READ AND  CONSIDER
CAREFULLY  THE FACTORS SET FORTH  BELOW,  AS WELL AS THE OTHER  INFORMATION  SET
FORTH  IN THIS  DISCLOSURE  STATEMENT  (AND  THE  DOCUMENTS  DELIVERED  TOGETHER
HEREWITH AND/OR INCORPORATED BY REFERENCE HEREIN),  PRIOR TO VOTING TO ACCEPT OR
REJECT THE PLAN.




                                       92

<PAGE>


A. Leverage

          Although  the  Plan  will  restructure  a  significant  amount  of the
Debtors' indebtedness, the Reorganized Debtors will remain leveraged. The degree
to  which  the   Reorganized   Debtors  are  leveraged   could  have   important
consequences,  including the following:  (i) the Reorganized Debtors' ability to
obtain  additional  financing  in  the  future  for  working  capital,   capital
expenditures,  product development,  acquisitions, general corporate purposes or
other purposes may be impaired,  (ii) a substantial  portion of the  Reorganized
Debtors'  cash flow from  operations  could be  dedicated  to the payment of the
principal  of and  interest  on its  indebtedness,  and  (iii)  the  Reorganized
Debtors'  degree of leverage may make it more  vulnerable to economic  downturns
and may limit its ability to withstand competitive pressures.

B. Dependence on Key Personnel

          The Debtors are dependent on the continued  services of certain senior
executives,  including  Richard  E.  Snyder,  Chairman  of the  Board  and Chief
Executive  Officer of Parent;  Philip Galanes,  Executive Vice President,  Chief
Administrative   Officer,   General  Counsel  and  Secretary  of  Parent;  Colin
Finkelstein, Executive Vice President and Chief Financial Officer of Parent; and
Richard Collins, Executive Vice President and Chief Operating Officer of Parent.
The Debtors believe the loss of the services of one or more of these individuals
could have a material adverse effect on the Reorganized Debtors.


                                       93

<PAGE>



C.  Dependence On and Relationships with Key Customers and Licensors

          The loss of the sales to any of the Debtors'  largest  customers would
cause a  substantial  decrease  in  business  and would have a material  adverse
effect on the Debtors.  Additionally,  the Debtors  believe that the variety and
popularity of characters (whether licensed or owned) is among the most important
factors that differentiate  their products from those of their competitors.  The
loss of any  principal  licenses  would  have a material  adverse  effect on the
Debtors.  In addition,  the loss of a  significant  license by the Debtors would
impair its distribution  capabilities which, in turn, could adversely affect its
ability to obtain new  licenses  and to renew  existing  licenses  on  favorable
terms, if at all.

          The Debtors'  relationships with a number of its significant customers
and licensors have been  contentious  from time to time because of disputes,  in
the case of its customers,  relating to prior pricing,  return and merchandising
policies  and,  in the  case of its  licensors,  alleged  non-compliance  by the
Debtors with certain license terms.  While  management has taken steps to repair
these relationships, there can be no assurance that such relationships, or other
relationships with customers and/or licensors, will not again become contentious
in the future, which could have a material adverse effect on the Debtors.

D. Competitive Conditions

          The children's publishing market is highly competitive. Competition is
based primarily on price, quality, distribution, marketing and licenses. In mass
market sales, the Debtors face competition  primarily from smaller  competitors.
In the trade and speciality trade


                                       94

<PAGE>



categories,  Golden Books' principal competitors are large publishing companies.
Golden  Books also  competes  for a share of  consumer  spending  on  children's
entertainment  and educational  products  against  companies that market a broad
range of products  utilizing a broad range of technologies that are unrelated to
those marketed by Golden Books.

          The market for licenses  also is highly  competitive  and Golden Books
competes against many other licensees for significant licenses. In recent years,
licensors have fragmented  licenses,  which has reduced the cost of purchasing a
license.  As a result,  smaller  bidders  have been able to enter the market for
licenses,  which has resulted in increased  competition in this market.  Many of
Golden Books'  significant  competitors  have greater  financial  resources than
Golden Books and, in selected markets, greater experience than Golden Books.

E. Risks Relating to Intellectual Properties


          The value of the  materials in Golden Books'  library,  both to Golden
Books as a licensor and as an end user, is subject to consumer taste.  There can
be no  assurance  that  these  properties  will  be  attractive  to  third-party
licensees or that they will be suitable for inclusion in Golden Books' products.
If properties  that are being  exploited  cease to be attractive to  third-party
licensees, licensing revenue from such licenses will decrease.

          In view of the complex nature of Golden Books'  intellectual  property
rights,  there is a risk of  third-parties  asserting  claims  of  ownership  or
infringement or asserting a right to payment with respect to the exploitation of
such  properties.  There can be no assurance  that Golden Books would prevail in
any such claim. In addition, Golden Books' ability to


                                       95

<PAGE>



demonstrate,  maintain or enforce these rights may be difficult.  Impairments or
difficulties in  demonstrating  the Golden Books' ownership or license rights in
such properties  could adversely  affect the ability of Golden Books to generate
revenue from or use such  properties.  In many cases,  the rights owned or being
acquired by Golden Books are limited in scope,  do not extend to exploitation in
all present or future  media or in  perpetuity  and may not include the right to
create derivative works, such as merchandising and character rights,  remakes or
sequels.

F. Projected Financial Information

          The Debtors failed to operate  profitably for several years  preceding
the Chapter 11 filing.  The financial  projections  annexed as Exhibit F to this
Disclosure  Statement are dependent  upon the successful  implementation  of the
business plan and the validity of the other assumptions contained therein. These
projections   reflect   numerous   assumptions,   including   Confirmation   and
consummation  of the Plan in accordance with its terms,  the anticipated  future
performance  of the Debtors,  industry  performance,  certain  assumptions  with
respect to competitors of the Debtors, general business and economic conditions,
and other  matters,  many of which are beyond the  control  of the  Debtors.  In
addition,  unanticipated  events and circumstances  occurring  subsequent to the
preparation of the  projections may affect the actual  financial  results of the
Debtors.  Although  the Debtors  believe  that the  projections  are  reasonably
attainable,  variations between the actual financial results and those projected
may occur and be material.


                                       96

<PAGE>


G. Lack of Market for Securities Issued Pursuant to Plan

          There is no currently  existing  market for the New Senior Notes,  New
Parent Common Stock or New Warrants and there can be no assurance that an active
trading market will develop or as to the degree of price  volatility in any such
particular  market.  Accordingly,  no  assurance  can be given  that a holder of
securities  issued  pursuant to the Plan will be able to sell such securities in
the future or as to the price at which any such sale may occur.  If such  market
were to exist, the liquidity of the market for such securities and the prices at
which such  securities  will trade will depend upon many factors,  including the
number of holders,  investor  expectations  for the Debtors,  and other  factors
beyond the Debtors' control.

H. Certain Bankruptcy Related Considerations

          1. Risk of Non-Confirmation of the Plan
             ------------------------------------

          Although  the  Debtors   believes  that  the  Plan  will  satisfy  all
requirements necessary for Confirmation by the Bankruptcy Court, there can be no
assurance that the Bankruptcy  Court will reach the same  conclusion.  There can
also be no  assurance  that  modifications  of the Plan will not be required for
Confirmation,  that such negotiations  would not adversely affect the holders of
the Old Senior Notes, TOPrS Certificates, GPH Notes, or Equity Interests or that
such modifications would not necessitate the resolicitation of votes.


                                       97

<PAGE>


          2. Nonconsensual Confirmation
             --------------------------

          In the event any impaired class of claims or equity interests does not
accept a plan of  reorganization,  a bankruptcy court may  nevertheless  confirm
such plan of reorganization at the proponent's  request if at least one impaired
class has  accepted  the plan of  reorganization  (with  such  acceptance  being
determined without including the acceptance of any "insider" in such class) and,
as to each impaired class which has not accepted the plan of reorganization, the
bankruptcy  court  determines  that  the  plan  of   reorganization   "does  not
discriminate unfairly" and is "fair and equitable" with respect to non-accepting
impaired  classes.  In the  event  that any  impaired  Class of Claims or Equity
Interests fails to accept the Plan in accordance with Section  1129(a)(8) of the
Bankruptcy  Code,  the  Debtors  reserve  the  right  to  request  nonconsensual
Confirmation  of the Plan in accordance  with Section  1129(b) of the Bankruptcy
Code.

I.  Dividends

          The Debtors  presently intend to retain earnings,  if any, for working
capital  and to fund  capital  expenditures.  Accordingly,  there is no  present
intention to pay Cash dividends on any shares of New Parent Common Stock.


                                       98

<PAGE>



                                       IX.

                         EXEMPTIONS FROM SECURITIES ACT
                        REGISTRATION; REGISTRATION RIGHTS

          The Plan contemplates the issuance of certain securities to holders of
Allowed Claims and Allowed Equity Interests. Section 1145 of the Bankruptcy Code
creates certain  exemptions from the registration and licensing  requirements of
federal and state  securities laws with respect to the issuance and distribution
of securities by a debtor under a plan of reorganization to holders of claims or
interests wholly or principally in exchange for those claims or interests.

A. Issuance of New Securities Pursuant to the Plan

          With respect to the New Senior Notes,  New Parent Common Stock and New
Warrants to be issued on the Effective Date, the Debtors intend to rely upon the
exemption  from the  registration  requirements  of the  Securities Act (and the
equivalent state  securities or "blue sky" laws) provided by Section  1145(a)(1)
of the Bankruptcy  Code.  Generally,  Section  1145(a)(1) of the Bankruptcy Code
exempts the issuance of securities  from the  requirements of the Securities Act
and the  equivalent  state  securities  and  "blue  sky"  laws if the  following
conditions are satisfied (i) the securities are issued by a debtor, an affiliate
participating in a joint plan of reorganization  with the debtor, or a successor
of the  debtor  under a plan  of  reorganization,  (ii)  the  recipients  of the
securities   hold  a  claim  against,   an  interest  in,  or  a  claim  for  an
administrative  expense against, the debtor, and (iii) the securities are issued
entirely in


                                       99

<PAGE>



exchange for the  recipient's  claim  against or interest in the debtor,  or are
issued  "principally"  in such  exchange and "partly" for Cash or property.  The
Debtors  believe that the issuance of securities  contemplated  by the Plan will
satisfy the aforementioned requirements and therefore is exempt from federal and
state  securities law,  although as discussed in Section B below,  under certain
circumstances,  subsequent  transfers  of  such  securities  may be  subject  to
registration requirements under such securities laws.

B. Subsequent Transfer of Securities Issued Under the Plan

          The  securities  issued  pursuant  to the  Plan may be  resold  by the
holders thereof without  restriction  unless, as more fully described below, any
such holder is deemed to be an "underwriter" with respect to such securities, as
defined  in  Section  1145(b)(1)  of the  Bankruptcy  Code.  Generally,  Section
1145(b)(1) of the Bankruptcy Code defines an "underwriter" as any person who (1)
purchases  a claim  against,  or interest  in, a  bankruptcy  case,  with a view
towards the  distribution  of any  security to be received in exchange  for such
claim or interest,  (2) offers to sell securities issued under a bankruptcy plan
on behalf of the holders of such securities, (3) offers to buy securities issued
under a bankruptcy plan from persons receiving such securities,  if the offer to
buy is made with a view towards  distribution of such  securities,  or (4) is an
issuer as  contemplated  by Section 2(11) of the  Securities  Act.  Although the
definition of the term "issuer"  appears in Section 2(4) of the Securities  Act,
the reference  (contained in Section  1145(b)(1)(D)  of the Bankruptcy  Code) to
Section 2(11) of the  Securities Act purports to include as  "underwriters"  all
persons  who,  directly  or  indirectly,  through  one or  more  intermediaries,
control, are controlled by, or are under common control with, an issuer of


                                       100

<PAGE>



securities. "Control" (as such term is defined in Rule 405 of Regulation C under
the Securities  Act) means the possession,  direct or indirect,  of the power to
direct or cause the direction of the policies of a person,  whether  through the
ownership  of voting  securities,  by contract  or  otherwise.  Accordingly,  an
officer or director of a reorganized  debtor (or its successor)  under a plan of
reorganization  may be deemed to be a  "control  person,"  particularly  if such
management position is coupled with the ownership of a significant percentage of
the debtor's (or  successor's)  voting  securities.  Moreover,  the  legislative
history of Section 1145 of the Bankruptcy Code suggests that a creditor who owns
at least 10% of the voting securities of a reorganized debtor may be presumed to
be a "control person."

C. Registration Rights

          As discussed above,  although upon their issuance  pursuant to Section
1145(a)(1) of the Bankruptcy Code the New Senior Notes,  New Warrants and shares
of New  Parent  Common  Stock may  generally  be resold by the  holders  thereof
without  registration  under  the  Securities  Act (or  under  equivalent  state
securities  or "blue  sky"  laws),  a holder  may be unable to resell his or its
securities  if such  holder  is  deemed to be (a) an  "underwriter"  within  the
meaning of Section  1145(b)(1) of the Bankruptcy  Code, or (b) an "affiliate" or
"control  person" of the Debtors  within the meaning of the  Securities  Act. In
order to enable holders of New Parent Common Stock,  New Warrants and New Senior
Notes to sell their securities  without  restriction (and to obviate the need to
satisfy the  requirements  relating to  applicable  exemptions  from federal and
state securities law  registration),  the Debtors have agreed to provide certain
holders of New Parent  Common  Stock,  New  Warrants  and New Senior  Notes with
certain


                                       101

<PAGE>



registration  rights  under an  agreement  which will be entered into among such
holders and the Reorganized Debtors on and after the Effective Date.

          THE  FOREGOING  SUMMARY  DISCUSSION  IS GENERAL IN NATURE AND HAS BEEN
INCLUDED IN THIS DISCLOSURE  STATEMENT SOLELY FOR  INFORMATIONAL  PURPOSES.  THE
DEBTORS  MAKE NO  REPRESENTATIONS  CONCERNING,  AND DO NOT  HEREBY  PROVIDE  ANY
OPINION OR ADVICE WITH RESPECT TO, THE SECURITIES LAW AND BANKRUPTCY LAW MATTERS
DESCRIBED ABOVE. IN LIGHT OF THE COMPLEX AND SUBJECTIVE  INTERPRETIVE  NATURE OF
WHETHER A PARTICULAR  RECIPIENT OF SECURITIES UNDER THE PLAN MAY BE DEEMED TO BE
AN "UNDERWRITER" WITHIN THE MEANING OF SECTION 1145(b)(1) OF THE BANKRUPTCY CODE
AND/OR AN "AFFILIATE"  OR "CONTROL  PERSON" UNDER  APPLICABLE  FEDERAL AND STATE
SECURITIES LAWS AND,  CONSEQUENTLY,  THE UNCERTAINTY CONCERNING THE AVAILABILITY
OF EXEMPTIONS  FROM THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT AND
EQUIVALENT  STATE  SECURITIES  AND "BLUE  SKY"  LAWS,  GOLDEN  BOOKS  ENCOURAGES
POTENTIAL  RECIPIENTS  OF NEW SENIOR  NOTES,  NEW WARRANTS AND NEW PARENT COMMON
STOCK TO  CONSIDER  CAREFULLY  AND  CONSULT  WITH  HIS,  HER,  OR ITS OWN  LEGAL
ADVISOR(S) WITH RESPECT TO SUCH (AND ANY RELATED) MATTERS.


                                       102

<PAGE>



                                       X.

             ALTERNATIVES TO THE PLAN AND CONSEQUENCES OF REJECTION


          Among the  possible  consequences  if the Plan is  rejected  or if the
Bankruptcy  Court  refuses  to  confirm  the  Plan  are  the  following:  (1) an
alternative  plan could be  proposed or  confirmed;  or (2) the Chapter 11 Cases
could be converted to liquidation cases under Chapter 7 of the Bankruptcy Code.

A. Alternative Plans

          As previously  mentioned,  with respect to an  alternative  plan,  the
Debtors  and their  professional  advisors  have  explored  various  alternative
scenarios  and  believe  that the Plan  enables the holders of Claims and Equity
Interests to realize the maximum recovery under the  circumstances.  The Debtors
believe  the Plan is the best  plan that can be  proposed  and  serves  the best
interests of the Debtors and other parties-in-interest.

B.  Chapter 7 Liquidation

          For a discussion of a Chapter 7 liquidation, see Section V(B)(2) above
entitled  "Acceptance and  Confirmation of the Plan -- Confirmation -- Statutory
Requirement for Confirmation of the Plan."


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<PAGE>

                                       XI.

                          RECOMMENDATION AND CONCLUSION

          The Debtors, the Informal Senior Note Committee and the Informal TOPrS
Committee,  and their respective  professional advisors, have analyzed different
scenarios  and believe that the Plan will provide for a larger  distribution  to
holders  of Claims  and  Equity  Interests  than  would  otherwise  result if an
alternative  restructuring  plan were proposed or the assets of the Debtors were
liquidated.  In addition,  any alternative  other than  Confirmation of the Plan
could result in extensive delays and increased administrative expenses resulting
in  potentially  smaller  distributions  to the  holders  of Claims  and  Equity
Interests.  Accordingly, the Debtors, the Informal Senior Note Committee and the
Informal TOPrS Committee recommend confirmation of the Plan and urge all holders
of impaired Claims and Equity Interests to vote to


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<PAGE>



accept the Plan, and to evidence such  acceptance by returning  their Ballots so
that they will be received by no later than the Voting Deadline.

Date:    New York, New York
         March 25, 1999

                                           GOLDEN  BOOKS  FAMILY  ENTERTAINMENT,
                                           INC.,  (for  itself and on behalf of
                                           each of the above-captioned  Debtors
                                           and Debtors-in-Possession)


                                            By:   /s/ Richard E. Snyder
                                                  ---------------------
                                                  Richard E. Snyder
                                                  Chairman of the Board and
                                                  Chief Executive Officer


PROSKAUER ROSE LLP
Counsel to the Debtors and
Debtors-in-Possession


By:   /s/ Alan B. Hyman
      -----------------    
      Alan B. Hyman (AH-6655)
      A Member of the Firm
      1585 Broadway
      New York, New York  10036
      (212) 969-3000



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<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

I.   INTRODUCTION AND SUMMARY..................................................1
     A.   Overview.............................................................1
     B.   Summary of Classification and Treatment Under the Plan...............2
     C.   Voting and Confirmation Procedures..................................12
          1.   Who May Vote...................................................14
          2.   Voting Instructions............................................14
          3.   Acceptance or Rejection of the Plan............................16
          4.   Confirmation Hearing...........................................17
          5.   Objections.....................................................17

II.  BACKGROUND AND EVENTS PRECIPITATING
     CHAPTER 11 FILING AND  SOLICITATION......................................18

     A.   Overview of the Debtors and their Business Operations...............18
          1.   Children's Publishing Division.................................19
          2.   Adult Publishing Division......................................20
          3.   Entertainment Group Division...................................20
          4.   Commercial Printing Division...................................21

     B.   Pre-Petition Debt Structure of the Debtors..........................21
          1.   Pre-Petition Working Capital Facility..........................21
          2.   The Old Senior Notes...........................................23
          3.   GPH Claims.....................................................24
          4.   TOPrS Certificates.............................................25

     C.   Pre-Petition Capital Structure......................................26
     D.   Events Precipitating Chapter 11 Filing..............................27
     E.   Pre-Petition Asset Disposition and Expense Reduction Efforts........33

III.     SIGNIFICANT POST-PETITION EVENTS.....................................33
     A.       Commencement Of Chapter 11 Cases................................33
     B.       First Day Orders................................................34
     C.       Professional Retentions.........................................34
     D.       Post-Petition Financing.........................................35
     E.       Sale of Assets of the Adult Publishing Division.................36

IV.      OVERVIEW OF THE PLAN.................................................37
     A.       General.........................................................37
     B.       Classification of Claims and Equity Interests...................38
     C.       Treatment of Claims and Equity Interests Under the Plan.........40
          1.        Unclassified Categories of Claims.........................41
               a.   Category 1 -- Administrative Expense Claims...............41


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<PAGE>
                         
               b.   Category 2-- Priority Tax Claims..........................43
          2.   Unimpaired Classes of Claims...................................44
                  a.   Class 1-- Priority Claims..............................44
                  b.   Class 2-- General Secured Claims.......................45
                  c.   Class 6-- General Unsecured Claims.....................46
                  d.   Class 11-- Subsidiary Equity Interests.................47
                  3.   Impaired Classes.......................................47
                  a.   Class 3--Old Senior Note Claims........................47
                  b.   Class 4--GPH Claims....................................51
                  c.   Class 5--TOPrS Claims..................................52
                  d.   Class 7--Debt Securities Rescission or Damage Claims...53
                  e.   Class 8--Old Preferred Stock Interests.................54
                  f.   Class 9--Old Common Stock Interests....................54
                  g.   Class 10--Equity Interest Rescission or Damage Claims..55

         D.       Description of Transactions to Be Implemented in Connection 
                  with the Plan...............................................56
                  1.       New Senior Notes...................................56
                  2.       New Warrants.......................................56
                  3.       Reorganized Debtors' Charters......................57
                  4.       Management Stock Option Plan.......................57
                  a.       Richard E. Snyder (Chief Executive Officer)........57
                  b.       Richard K. Collins (Chief Operating Officer),
                           Philip Galanes (Chief Administrative Officer) and
                           Colin Finkelstein (Chief Financial Officer)........58
                  c.       Other Grants.......................................58
                  5.       Cancellation and Surrender of Existing Securities
                           and Agreements.....................................58
                  6.       Employment Contracts...............................60
                  7.       Registration Rights Agreements.....................61
                  8.       Substantive Consolidation..........................61
         E.       Funding for the Plan........................................63
         F.       Description of Other Provisions of the Plan.................63
                  1.       Disputed Claims....................................63
                  2.       Disputed Payments..................................64
                  3.       Unclaimed Property.................................64
                  4.       Issuance of New Securities.........................64
                  5.       Discharge..........................................65
                  6.       Termination of Subordination Rights and Settlement
                           of Related Claims and Controversies................66
                  7.       Additional Releases................................67
                  8.       Injunctions........................................68
                  9.       Exculpation........................................70
                  10.      Section 1146 Exemption.............................70
                  11.      Full and Final Satisfaction........................71
                  12.      Cram-Down..........................................72


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<PAGE>



                  13.      Disbursement of Funds and Delivery of
                           Distribution.......................................72
                  14.      Avoidance and Recovery Actions.....................74
                  15.      Retention of Jurisdiction..........................75
                  16.      Executory Contracts and Unexpired Leases...........76
                  17.      Bar Date for Filing Proofs of Claims Relating to
                           Executory Contracts and Unexpired Leases Rejected
                           Pursuant to the Plan...............................77
                  18.      Indemnification Claims.............................78
                  19.      Compensation and Benefit Programs..................79
                  20.      Retiree Benefits...................................80
                  21.      Post-Confirmation Fees, Final Decree...............80
                  22.      Continuation of Bankruptcy Injunction or Stays.....80
                  23.      Revesting of Assets................................80
                  24.      General Release of Liens...........................81
                  25.      Conditions to Effective Date of the Plan...........81
         G.       Post-Confirmation Officers and Directors....................83

V.       ACCEPTANCE AND CONFIRMATION OF THE PLAN..............................85
         A.       Acceptance of the Plan......................................85
         B.       Confirmation................................................86
                  1.       Confirmation Hearing...............................86
                  2.       Statutory Requirements for Confirmation of
                           the Plan...........................................87
                  3.       Confirmation Without Acceptance by All Impaired
                           Classes............................................90

VI.      VALUATION............................................................92

VII.     CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN..................92

VIII.    RISK FACTORS.........................................................92
         A.       Leverage....................................................93
         B.       Dependence on Key Personnel.................................93
         C.       Dependence On and Relationships with Key Customers
                  and Licensors...............................................94
         D.       Competitive Conditions......................................94
         E.       Risks Relating to Intellectual Properties...................95
         F.       Projected Financial Information.............................96
         G.       Lack of Market for Securities Issued Pursuant to Plan.......97
         H.       Certain Bankruptcy Related Considerations...................97
                  1.       Risk of Non-Confirmation of the Plan...............97
                  2.       Nonconsensual Confirmation.........................98
         I.       Dividends...................................................98

IX.      EXEMPTIONS FROM SECURITIES ACT
         REGISTRATION; REGISTRATION RIGHTS....................................99
         A.       Issuance of New Securities Pursuant to the Plan.............99


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         B.       Subsequent Transfer of Securities Issued Under the Plan....100
         C.       Registration Rights........................................101

X.       ALTERNATIVES TO THE PLAN AND CONSEQUENCES OF REJECTION..............103
         A.       Alternative Plans..........................................103
         B.       Chapter 7 Liquidation......................................103

XI.      RECOMMENDATION AND CONCLUSION.......................................104



                                       iv

<PAGE>



EXHIBITS

A - Plan of  Reorganization
B - Form 10-K dated December 27, 1997
C - Form 10-Q dated September 26, 1998
D - Restructuring Agreement
E - Liquidation Analysis
F - Pro Forma balance sheet and financial projections



                                        v

<PAGE>


                                    EXHIBITS

         [Exhibit  A to the  Disclosure  Statement  (the  Plan)  has been  filed
separately with the Bankruptcy  Court. All other exhibits will be filed with the
Bankruptcy Court prior to the hearing to approve the Disclosure Statement.]



                                       vi