UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q


(Mark One)

[ X ] Quarterly  Report  Pursuant to Section 13  or  15(d)  of  the  Securities
Exchange Act of 1934

      For the quarterly period ended September 30, 1996


[  ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the transition period from ________________ to _____________________

                         Commission file number 33-27399




                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
________________________________________________________________________________
             (Exact name of registrant as specified in its charter)





                New Jersey                              22-2469174   
__________________________________           ___________________________________
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)    


         Indiana Avenue & the Boardwalk, Atlantic City, New Jersey 08401
               (Address of principal executive offices) (Zip Code)

                                 (609) 340-3400
              (Registrant's telephone number, including area code)




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


<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

                                      INDEX


PART I                      FINANCIAL INFORMATION                   Page No.

     Item 1.     Financial Statements

                 Introductory Note to Financial Statements              2

                 Balance Sheets As of September 30, 1996 and 
                 December 31, 1995                                      3

                 Statements  of  Operations For  the  Three-Month 
                 and Nine-Month Periods Ended September 30, 1996
                 and 1995                                               4

                 Statements of Changes in Partners' Capital 
                 Accounts (Deficit) For the Nine Months  Ended  
                 September 30, 1996 and the Year Ended 
                 December 31, 1995                                      5

                 Statements  of Cash Flows For the Nine Months 
                 Ended September 30, 1996 and 1995                      6

                 Notes to Financial Statements                     7 - 10

     Item 2.     Management's Discussion and Analysis of 
                 Financial  Condition and Results of Operations   11 - 16



PART II                          OTHER INFORMATION

     Items 1-5   No information is provided as the answers to
                 Items 1 through 5 are inapplicable.

     Item 6.     Exhibits and reports on Form 8-K                      16


<PAGE>



                                     PART I

Item 1.   Financial Statements

Introductory Note to Financial Statements

The  accompanying  financial  statements  have been  prepared by  Atlantic  City
Boardwalk Associates,  L.P. ("Partnership") without audit, pursuant to the rules
and  regulations of the Securities  and Exchange  Commission.  In the opinion of
management,  these financial  statements  contain all  adjustments  necessary to
present  fairly the financial  position of the  Partnership  as of September 30,
1996 and  December 31, 1995,  the results of  operations  for the three and nine
months ended September 30, 1996 and 1995, and the cash flows for the nine months
ended September 30, 1996 and 1995.

Although management  believes that the disclosures  included herein are adequate
to make the information contained herein not misleading, certain information and
footnote  disclosure  normally  included  in  financial  statements  prepared in
accordance with generally accepted accounting  principles are omitted herein and
are  incorporated by reference to the  Partnership's  Annual Report on Form 10-K
for the year ended  December  31, 1995 filed with the  Securities  and  Exchange
Commission.



<PAGE>



                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
                                 Balance Sheets
                    September 30, 1996 and December 31, 1995

                                              (Unaudited)
               Assets                             1996               1995
               ______                          __________         ________

Current assets:
     Cash and cash equivalents                 $1,366,000          1,535,000
     Rent due from New Claridge                   236,000            298,000
     Interest receivable from partners             55,000             28,000
     Prepaid expenses                             362,000            313,000
      Other assets                                224,000            199,000
                                                ---------          ---------
              Total current assets              2,243,000          2,373,000
                                                ---------          ---------

Hotel Assets                                  183,519,000        180,298,000
Less:  Accumulated depreciation 
       and amortization                        98,891,000         94,057,000
                                               ----------         ----------

              Net Hotel Assets                 84,628,000         86,241,000
                                               ----------         ----------

Note receivable from New Claridge, including 
   accrued interest  of $3,150,000 and $2,826,000
   in 1996 and 1995, respectively               6,750,000          6,426,000
Deferred rent from New Claridge                38,356,000         39,856,000
Intangibles, net of accumulated 
   amortization of $3,621,000 and 
   $3,526,000 in 1996 and 1995, 
   respectively                                   184,000            279,000
                                               ----------           --------

                                             $132,161,000        135,175,000
                                             ============        ===========

                   Liabilities and Partners' Capital Accounts


Current liabilities:
     Accounts payable                          $1,454,000          1,400,000
     Accrued interest due New Claridge          1,186,000          1,274,000
     Current portion of long-term debt 
     due principally to New Claridge           16,143,000         14,051,000
                                               ----------         ----------
              Total current liabilities        18,783,000         16,725,000
                                               ----------         ----------

Long-term debt due principally to New Claridge, 
     including accrued interest of $20,000,000 
     in 1996 and 1995                          96,155,000        104,315,000
                                               ----------        -----------

Partners' capital accounts (deficit):
     New general partners                          88,000             57,000
     Former general partners                      162,000            144,000
     Special limited partners                    (203,000)          (234,000)
     Investor limited partners                 17,176,000         14,168,000
                                               ----------         ----------

       Total partners' capital 
          accounts (deficit)                   17,223,000         14,135,000

Commitments and contingencies                  ----------         ----------

                                             $132,161,000        135,175,000
                                             ============        ===========
                                                  
See accompanying notes to financial statements.


<PAGE>


<TABLE>
                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.


                           Statements of Operations
                                   (Unaudited)

<CAPTION>
                                           Three Months Ended          Nine Months Ended
                                              September 30,                September 30,
                                           -------------------         ------------------
                                           1996           1995         1996          1995
                                           ----           ----         -----         ----
Revenues:

<S>                                      <C>            <C>          <C>           <C>   
     Rent from New Claridge for
         the lease of Hotel Assets       $ 9,756,000    9,543,000    29,498,000    28,829,000
     Interest from New Claridge              108,000      108,000       324,000       324,000
     Interest from Special Limited Partners    9,000        9,000        27,000        27,000
     Investment                               23,000       32,000        78,000        98,000
                                         -----------     --------    ----------    ----------

                                           9,896,000    9,692,000    29,927,000    29,278,000
                                         -----------    ---------    ----------    ----------

Expenses:
     Cost of maintaining and repairing
         Hotel Assets, paid to 
         New Claridge                      3,071,000    2,968,000     9,219,000     8,720,000
     Interest, principally on mortgages to
         New Claridge                      4,005,000    4,167,000    12,138,000    12,918,000
     General and administrative              123,000      104,000       455,000       462,000
     General Partners' management fee         33,000       33,000        98,000        98,000
     Depreciation and amortization         1,518,000    1,671,000     4,929,000     4,996,000
                                           ---------    ---------     ---------    ----------

                                           8,750,000    8,943,000    26,839,000    27,194,000
                                           ---------    ---------    ----------    ----------


Net income                            $    1,146,000      749,000     3,088,000     2,084,000
                                           =========    =========     =========    ==========



Net income per limited partnership unit
 (450 units outstanding at the end 
 of each period)                      $        2,506        1,636         6,753         4,556
                                       =============    ==========     ========    ==========

</TABLE>

See accompanying notes to financial statements.



<PAGE>


<TABLE>

                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

               Statements of Partners' Capital Accounts (Deficit)

                  For the Nine Months Ended September 30, 1996
                      and the Year Ended December 31, 1995

<CAPTION>

                                                          Class A       Class B        Class A           Class B           Total
                               New         Former         Special       Special       Investor          Investor         Partners'
                             General       General        Limited       Limited        Limited           Limited          Capital
                            Partners      Partners       Partners      Partners        Partners          Partners        Accounts
                            --------      --------       --------      --------        --------          --------        --------


<S>                           <C>         <C>            <C>           <C>            <C>               <C>             <C>
Partners' Capital
Accounts (Deficit),
December 31, 1994     $       30,000      127,000        (17,000)     (244,000)       2,806,000         8,710,000       11,412,000

Net income                    27,000       17,000          2,000        25,000          651,000         2,001,000        2,723,000
                          ----------     --------        --------    ---------        ---------        ----------       ----------

Partners' Capital
Accounts (Deficit),
December 31, 1995             57,000       144,000        (15,000)     (219,000)       3,457,000        10,711,000       14,135,000

Net income
(unaudited)                   31,000        18,000          2,000        29,000          738,000         2,270,000        3,088,000
                        ------------  ------------      ---------   ------------       ---------       -----------      -----------

Partners' Capital
Accounts (Deficit),
September 30, 1996
(unaudited)                $  88,000       162,000        (13,000)     (190,000)       4,195,000        12,981,000       17,223,000
                              ======  ============         ======       =======        =========        ==========       ==========


</TABLE>

See accompanying notes to financial statements.


<PAGE>

<TABLE>

                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

                            Statements of Cash Flows
                                   (Unaudited)

              For the Nine Months Ended September 30, 1996 and 1995

<CAPTION>
                                                                      1996            1995
                                                                   -------           ------
Cash flows from operating activities:
<S>                                                             <C>                <C>      
     Net income                                                 $3,088,000           2,084,000
         Adjustments to reconcile net income to
         net cash provided by operating activities:
              Depreciation and amortization                      4,929,000           4,996,000
              Accretion of discount on mortgage note             1,123,000             863,000
              Loss on disposal of assets                             -                  47,000
              Deferred rent                                      1,500,000           1,021,000
              Deferred interest on receivable from New Claridge   (324,000)           (324,000)
              Change in current assets and liabilities:
               (Increase) in rent due from New Claridge,
               interest receivable from partners,
                  prepaid expenses and other assets                (39,000)           (315,000)
               (Decrease) increase in accounts payable and
                  accrued interest due New Claridge                (34,000)            309,000
                                                                 ----------         ----------

                  Net cash provided by operating activities     10,243,000           8,681,000
                                                                 ----------         ----------

Cash flows from investing activities:
     Purchase of Hotel Assets                                   (3,221,000)         (1,682,000)
     Proceeds from sale of Hotel Assets                              -                  22,000
                                                                -----------         -----------

                  Net cash used in investing activities         (3,221,000)         (1,660,000)
                                                                -----------         -----------

Cash flows from financing activities:
     Proceeds of borrowings from New Claridge                    3,312,000           1,983,000
     Principal payments of debt, principally to New Claridge   (10,503,000)         (9,202,000)
                                                                ----------           ---------

               Net cash used in financing activities            (7,191,000)         (7,219,000)
                                                                ----------           ---------

Net decrease in cash and cash equivalents                         (169,000)           (198,000)
Cash and cash equivalents, beginning of period                   1,535,000           1,664,000
                                                                 ---------          ---------

Cash and cash equivalents, end of period                      $  1,366,000           1,466,000
                                                               ===========           =========

Supplemental cash flow information:
     Interest paid                                             $11,584,000         12,466,000
                                                                ==========         ==========
Supplemental noncash investing and financing activities:
     Capital lease obligation incurred to acquire Hotel Asset  $     -                557,000
                                                                ===========        ==========

</TABLE>


See accompanying notes to financial statements.


<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
                          Notes to Financial Statements
                                   (Unaudited)

(1)      The Partnership

         Atlantic City Boardwalk Associates,  L.P. ("Partnership") was formed on
         October  31,  1983 to  acquire  the  buildings,  parking  facility  and
         non-gaming  depreciable,   tangible  property   (collectively,   "Hotel
         Assets")  of The  Claridge  Hotel and  Casino  ("Claridge")  located in
         Atlantic City, New Jersey; to hold a leasehold  interest in the land on
         which the  Claridge is located  ("Land"),  which Land was  subsequently
         acquired  by the  Partnership  as  part  of a  financial  restructuring
         ("Restructuring  Agreement");  and to engage in  activities  related or
         incidental thereto. The Partnership leases the Land and Hotel Assets to
         The  Claridge  at  Park  Place,   Incorporated   ("New  Claridge"),   a
         wholly-owned  subsidiary of The Claridge  Hotel and Casino  Corporation
         ("Corporation"), under operating leases.

(2)      Financial Condition of the Partnership and New Claridge

         The ability of the  Partnership to fulfill its obligations is dependent
         upon the  ability  of New  Claridge  to pay rental  payments  when due.
         Accordingly,  the financial  stability of the  Partnership is dependent
         upon the financial condition of New Claridge.

         The  Corporation had a net loss of $8,967,000 net of income tax benefit
         of $5,398,000, for the nine months ended September 30, 1996 compared to
         a net loss of $166,000,  net of income tax expense of $604,000, for the
         same  period in 1995.  Revenues  during the first  quarter of 1996 were
         adversely affected by several winter storms, most notably the "Blizzard
         of the Century" in January,  which  blanketed the  Northeastern  United
         States  with a record  amount of snow.  In  addition,  citywide  casino
         capacity has continued to increase over the total capacity available in
         1995,  reflected  in a 7.8%  increase  in  the  average  casino  square
         footage,  and a 9.6% increase in the average  number of slot  machines,
         including  the  opening of the Trump  World's  Fair Casino in May 1996.
         These expansions have resulted in heightened efforts among the Atlantic
         City casinos to compete for market share.

         On July 10, 1996, the Claridge's $28 million self-parking garage, which
         had been opened on June 28, 1996,  was closed due to a fatal  accident;
         the self-parking garage was not reopened until September 20, 1996, when
         certain  structural  enhancements  were  completed.  As a result of not
         having  the use of the  self-parking  garage  during  the  busy  summer
         season,  the  Claridge  was unable to fully take  advantage  of certain
         promotional  programs designed to capture the more profitable  drive-in
         casino  patron.  Competition  for casino  patrons  remained  heightened
         during the nine months ended  September  30, 1996, as the many recently
         expanded  casinos  and the  newly-opened  Trump  World's  Fair  Casino,
         strived  to  acquire  and  maintain  their  "fair  share" of the casino
         revenue  market.  In addition,  major  infrastructure  improvements  in
         Atlantic City have commenced in connection with the construction of the
         new Convention  Center and the corridor  project  linking the center to
         the boardwalk;  as a result,  there was considerable traffic congestion
         on roads  leading  into and  around  Atlantic  City  during  the  third
         quarter,  contributing to the relatively  disappointing citywide casino
         results.

         Competition for attracting the bus passenger market continued  citywide
         during  the  nine  months  ended  September  30,  1996,  in the form of
         increased coin incentives offered to passengers arriving by bus. Due to
         its  dependency  on the bus  market,  the  Claridge  has had to  remain
         competitive with the incentives  offered by other Atlantic City casinos
         in order to maintain its share of this  market.  During the nine months
         ended  September  30,  1996,  bus  coin  incentives  averaged  $19  per
         passenger,  compared to  approximately  $12 per  passenger in the first
         nine  months of 1995.  In total  $15,313,000  of coin  incentives  were
         issued to 803,000 bus passengers during the nine months ended September
         30, 1996,  compared to $8,729,000  issued to 718,000  passengers in the
         same period of 1995.

         On January  31,  1994,  the  Corporation  completed  an offering of $85
         million of First  Mortgage  Notes due in 2002,  bearing  interest at 11
         3/4%. The Notes are secured by (i) a non-recourse  mortgage  granted by
         the Partnership  representing a first lien on the Hotel Assets,  (ii) a
         pledge granted by the Corporation of all outstanding  shares of capital
         stock of New  Claridge,  and (iii) a  guarantee  by New  Claridge.  New
         Claridge's guarantee of the Notes is secured by a collateral assignment
         of the second lien Expandable Wraparound Mortgage, and by a lien on the
         Claridge's gaming and other assets,  which lien will be subordinated to
         liens that may be placed on those gaming and other assets to secure any
         future  revolving  credit  line  arrangement.  Interest on the Notes is
         payable  semiannually  on  February  1  and  August  1  of  each  year,
         commencing  August 1, 1994,  with the Notes  coming due on  February 1,
         2002.

         As  discussed  below  in the Form  10-Q  under  "Item  2.  Management's
         Discussion   and  Analysis  of  Financial   Condition  and  Results  of
         Operations - Liquidity and Capital  Resources,"  there is  considerable
         doubt as to whether the Corporation will be able to meet its obligation
         to pay  interest due on February 1, 1997 on its 11 3/4% Notes due 2002.
         As a  result,  the  Corporation  is in the  process  of  formulating  a
         proposal to the holders of the Notes to restructure  the  Corporation's
         obligations under the Notes.

         At September 30, 1996, the Corporation had a working capital deficit of
         $6,161,000 as compared to working  capital of  $15,122,000  at December
         31, 1995. This decrease in working capital is principally  attributable
         to a decrease in cash and cash  equivalents of  $25,142,000  (primarily
         due to payments for the  construction  of the  self-parking  garage and
         interest due on the First  Mortgage  Notes) and an increase in accounts
         payable  of  $1,214,000  (primarily  due  to  accruals  related  to the
         construction  of the  self-parking  garage),  offset by an  increase in
         accounts  receivable of $1,583,000  (principally the current portion of
         the  Expandable  Wraparound  Mortgages  due  from the  Partnership),  a
         decrease in accrued  payroll and related  benefits of  $614,000,  and a
         decrease in interest payable on the First Mortgage Notes of $2,496,000.


(3)      Licensing

         The ownership and operation of casino-hotel facilities in Atlantic City
         are subject to extensive state  regulation under the Casino Control Act
         under the direction of the New Jersey Casino  Control  Commission.  The
         Casino  Control Act provides  that various  categories of entities must
         hold appropriate  casino licenses.  The Partnership  currently operates
         under a four-year casino service industry license effective October 31,
         1995, while New Claridge  operates under a four-year casino  operator's
         license effective September 30, 1995.


(4)      Contingencies

         The Restructuring  Agreement provided for Del Webb Corporation ("Webb")
         to retain an interest  equal to $20 million plus interest from December
         1,  1988  accruing  at the rate of 15% per annum  compounded  quarterly
         ("Contingent  Payment") in any proceeds  ultimately  recovered from the
         operations  and/or the sale or refinancing of the Claridge  facility in
         excess of the First Mortgage loan and other liabilities. To give effect
         to this Contingent Payment,  the Corporation and the Partnership agreed
         not  to  make  any   distributions  to  the  holders  of  their  equity
         securities, whether derived from operations or from sale or refinancing
         proceeds, until Webb had received the Contingent Payment.

         In  connection  with the  restructuring,  Webb  agreed to permit  those
         partners/investors  in  the  Partnership  and  Corporation  ("Releasing
         Partners/Investors")  from whom Webb had received written releases from
         all  liabilities,  rights  ("Contingent  Payment  Rights")  to  receive
         certain  amounts  to  the  extent  available  for  application  to  the
         Contingent   Payment.    Approximately   84%   in   interest   of   the
         partners/investors    provided    releases    and   became    Releasing
         Partners/Investors.  Payments to Releasing Partners/Investors are to be
         made in  accordance  with a schedule of  priorities,  as defined in the
         Restructuring Agreement.

         On April 2, 1990,  Webb  transferred  its  interest  in the  Contingent
         Payment to an  irrevocable  trust for the  benefit of the Valley of the
         Sun United Way, and upon such transfer  Webb was no longer  required to
         be qualified or licensed by the  Commission.  On February 23, 1996, the
         Corporation  acquired  an option to  purchase,  at a discount  from the
         carrying  value,  the  Contingent  Payment.  The purchase  price of the
         option was $1 million,  and the option may be exercised  any time prior
         to December 31, 1997.  Upon exercise of the option,  the purchase price
         of the  Contingent  Payment would be $10 million,  plus interest at 10%
         per annum for the period from January 1, 1997 to the date of payment of
         the purchase price if the purchase  occurs after December 31, 1996. The
         purchase price may also increase in an amount not to exceed $10 million
         if future  distributions  to  Releasing  Partners/Investors  exceed $20
         million.  Due to the Corporation's recent financial situation (see Note
         2, Financial  Condition of the  Partnership  and New  Claridge),  it   
         currently appears unlikely  that this option will be exercised.  It is 
         estimated that at September 30, 1996,  the  aggregate  amount owing in 
         respect of the Contingent Payment was $63.4 million.

         Upon  exercise of the option,  it is  anticipated  that the  Contingent
         Payment  will  be  canceled  so that  neither  the  Corporation  or the
         Partnership  will have any obligation to make any payment in respect of
         the Contingent Payment before making a distribution to limited partners
         or  shareholders.  Upon the purchase  and  cancellation,  however,  the
         Corporation and the Partnership  will remain obligated to make payments
         to the  Releasing  Partners/Investors,  in  respect  of the  Contingent
         Payment Rights, before any distribution may be made to limited partners
         or  shareholders.  These  payments  would be required to be in the same
         amounts  as if the  Contingent  Payment  had  not  been  purchased  and
         canceled.  As a result,  it is not  likely  that  limited  partners  or
         shareholders who are not Releasing  Partners/Investors will receive any
         distribution from the Partnership or the Corporation. In the aggregate,
         Releasing Partners/Investors are entitled to receive an amount equal to
         approximately 72% of the Contingent Payment.

         Under the terms of the option, upon purchase of the Contingent Payment,
         the   Partnership   and/or  the   Corporation   are  required  to  make
         distributions    in   excess   of   $7   million   to   the   Releasing
         Partners/Investors.  The Partnership and the Corporation have agreed to
         cooperate  in the  purchase of the option and the  Contingent  Payment,
         with each contributing one-half of the purchase price of the option and
         each  anticipated  to contribute  one-half of the purchase price of the
         Contingent Payment. A portion of the Partnership's contribution will be
         contributed  through  additional  abatements of basic rent payments due
         under the Operating Lease and the Expansion Operating Lease.


(5)      Recently Adopted Accounting Pronouncements

         During the first quarter of 1996, the Partnership  adopted Statement of
         Financial  Accounting  Standards No. 121 "Accounting for the Impairment
         of  Long-Lived  Assets and for  Long-Lived  Assets to be  Disposed  Of 
         ("SFAS  121").  SFAS 121  requires  that a  review  for  impairment  be
         performed whenever events or changes in circumstances indicate that the
         carrying  amount  of  long-lived  assets  may  not be  recoverable.  In
         performing  the  review  for  recoverability,  the  Partnership  should
         evaluate the future undiscounted cash flows expected to result from the
         use of the asset and its eventual disposition. The adoption of SFAS 121
         on January 1, 1996 did not  require  any  impairment  to be  recognized
         during the first nine months of 1996.


<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Results of Operations for the Three-Month and Nine-Month Periods Ended September
30, 1996 as Compared to the Three-Month and Nine-Month Periods Ended September 
30, 1995

Rental income for the three months ended  September 30, 1996 increased  $213,000
as compared to the three months ended  September 30, 1995,  and $669,000 for the
nine months  ended  September  30,  1996 as  compared  to the nine months  ended
September 30, 1995. New Claridge pays as additional  rent,  certain expenses and
debt service  relating to  furniture,  fixture and  equipment  replacements  and
building improvements  ("FF&E"). The Partnership's debt service relating to FF&E
was higher in 1996 than in 1995, resulting in increased rents in 1996.

The Partnership has an agreement with New Claridge whereby New Claridge provides
facility  and  maintenance  and  engineering  services  for  the  Claridge.  The
agreement calls for the  reimbursement of the actual  facilities and maintenance
costs  incurred  on the  Partnership's  behalf.  The  cost  of  maintaining  and
repairing Hotel Assets increased $103,000 and $499,000, respectively, during the
three- and nine-month  periods ended  September 30, 1996 as compared to the same
periods  in 1995.  These  increases  are due to an  increase  in New  Claridge's
maintenance  and engineering  salaries and wages and payroll  related  expenses,
along with a general overall increase in the cost of maintaining the facilities.

For the three- and nine-month periods ended September 30, 1996, interest expense
decreased $162,000 and $780,000,  respectively,  as compared to the same periods
ended  September 30, 1995.  These  decreases are due to principal  payments made
during  1995 and 1996  that  reduced  the  average  outstanding  balance  of the
wraparound and expansion mortgages.

General and  administrative  expenses for the three months ended  September  30,
1996 increased  $19,000 as compared to the three months ended September 30, 1995
and decreased $7,000 for the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1996. During the nine months ended September
30, 1995 a $47,000  loss on the  disposal of assets was recorded and included in
general  and  administrative  expenses.  By  removing  the  effect of this loss,
general and  administrative  expenses  actually  increased  $40,000 for the nine
months ended September 30, 1996. These increases of $19,000 for the three months
ended  September  30, 1996 and $40,000 for the nine months ended  September  30,
1996 are due to higher insurance  premiums being paid by the Partnership  during
1996 when compared to 1995.

Liquidity and Capital Resources

Current lease payments from New Claridge are sufficient to pay the Partnership's
debt service and operating  expenses.  As part of the  Restructuring  Agreement,
rental  payments in excess of monthly  cash flow  requirements  are  deferred or
abated  so that  excess  cash does not  accumulate  in the  Partnership.  At the
Closing of the restructuring  the Partnership  loaned New Claridge $3.6 million.
The note,  including  interest,  along with  those  rentals  deferred  under the
amendment to the operating  leases,  will be repaid to the Partnership  upon (i)
the sale or refinancing of the Claridge;  (ii) upon full or partial satisfaction
of the Expandable  Wraparound Mortgage;  and (iii) upon full satisfaction of any
first mortgage then in place.

Per the terms of an amendment to the Operating  Lease  Agreement  executed as of
August 1, 1991,  during the years  1991 to 1998  contractual  rents in excess of
debt service and  Partnership  expenses can be abated up to  $38,820,000  in the
aggregate but not in excess of $10,000,000 in any one calendar year.  Cumulative
abated rents as of September 30, 1996 total approximately  $34,947,000,  leaving
$3,873,000 still to be abated in the future.  The amount which will be abated in
future periods cannot be determined  until the  Partnership  incurs expenses and
debt  service  in those  periods.  However,  it is  anticipated  by the  general
partners as well as the management of New Claridge that the remaining  abatement
of $3,873,000 will be fully utilized by the first quarter of 1997.

Under  the  terms  of  the  option  to  purchase  the  Contingent  Payment  (see
"Contingencies"  - Note 4 to the  financial  statements),  upon  purchase of the
Contingent Payment,  the Partnership and/or the Corporation are required to make
distributions in excess of $7 million to the Releasing  Partners/Investors.  The
Partnership and the Corporation  have agreed to cooperate in the purchase of the
option  and the  Contingent  Payment,  with each  contributing  one-half  of the
purchase price of the option and each anticipated to contribute  one-half of the
purchase  price  of the  Contingent  Payment.  A  portion  of the  Partnership's
contribution  will be contributed  through  additional  abatements of basic rent
payments due under the  Operating  Lease and the  Expansion  Operating  Lease as
follows.  Additional  abatements  of rent  totaling  $500,000 are available as a
result of the acquisition of the option to purchase the Contingent Payment,  and
further  abatements will become available upon exercising the Contingent Payment
option.  These  additional  abatements  will be utilized after the original rent
abatement of $38,820,000 (as discussed above) has been fully utilized.

The  Partnership  funds the  purchase of  additional  Hotel  Assets by borrowing
funds, at a 14% interest rate, from New Claridge.  The ensuing notes are secured
under the  Expandable  Wraparound  Mortgage  up to $25  million.  Principal  and
interest  on  these  notes  are  then  reimbursed  to  the  Partnership  through
additional rentals from New Claridge. Under the Operating Lease, New Claridge is
required to reimburse the Partnership for all taxes, assessments,  insurance and
general and administrative costs of the Partnership.

The  ownership  and  operation of  casino-hotel  facilities in Atlantic City are
subject to extensive  state  regulation  under the Casino  Control Act under the
direction of the New Jersey Casino  Control  Commission.  The Casino Control Act
provides  that  various  categories  of entities  must hold  appropriate  casino
licenses.  The Partnership  currently  operates under a four-year casino service
industry license effective October 31, 1995, while New Claridge operates under a
four-year casino operator's license effective September 30, 1995.

The Partnership had a working capital deficiency of approximately $16,540,000 as
of September  30, 1996 and  $14,352,000  as of December  31,  1995.  The working
capital deficiency  primarily results from the consummation of the Restructuring
Agreement. As part of the restructuring, the Partnership's cash flow was reduced
to an  amount no  greater  than what the  Partnership  needs to pay  Partnership
expenses,  including debt service.  Thus, so long as the Claridge is financially
viable and  continues  to make all  payments  under the  operating  leases,  the
Partnership expects to be able to pay its current liabilities.

The Financial Condition of the Claridge

As is evident  from above,  the ability of the  Partnership  to continue to ful-
fill  its  obligations  is  dependent  upon  the  ability of  New   Claridge  to
continue to make rental  payments  when due. As  disclosed  by the Claridge in a
press  release  dated  November 7, 1996,  the Claridge has recently  experienced
severe  financial  difficulty.  It  reported a $2.7  million  loss for the third
quarter  of 1996  and  announced  that it is in the  process  of  formulating  a
proposal to restructure its obligation under its 11 3/4% Notes due 2002. It also
announced  that it  believes  it is  unlikely  that it will be able to meet  its
obligation  to pay  interest  due on these Notes on  February 1, 1997,  absent a
restructuring.  Due to the serious  financial  condition facing the Claridge and
the Partnership's dependence on rental income from the Claridge, the Partnership
is repeating herein the Claridge's discussion of liquidity and capital resources
from its Form 10-Q for the quarter ended September 30, 1996.

On January 31, 1994, the  Corporation  completed an offering of $85 million of  
Notes due in 2002,  bearing interest at 11 3/4%. The Notes are secured by (i) a 
non-recourse mortgage granted by the Partnership  representing a first lien on  
the Hotel Assets,  (ii) a pledge granted by the  Corporation of all  outstanding
shares of capital stock of New Claridge,  and (iii) a guarantee by New Claridge.
New Claridge's  guarantee of the Notes is secured by a collateral  assignment of
the second lien Expandable Wraparound Mortgage,  and by a lien on the Claridge's
gaming and other assets,  which lien will be  subordinated  to liens that may be
placed on those  gaming and other assets to secure any future  revolving  credit
line  arrangement.  Interest on the Notes is payable  semiannually on February 1
and August 1 of each year, commencing August 1, 1994.

A portion of the net proceeds of $82.2 million,  after  deducting fees and 
expenses, was used as follows:

      (i)   to  repay in full  the  Corporation's  outstanding  debt  under  the
            Revolving  Credit and Term Loan  Agreement  (the "Loan  Agreement"),
            including the  outstanding  balance of the  Corporation's  revolving
            credit line, which was secured by the First Mortgage. In conjunction
            with the full satisfaction of the Loan Agreement,  the Corporation's
            $7.5 million  revolving credit line arrangement was terminated.  The
            Corporation  has  been  seeking  to  obtain  a new  line  of  credit
            arrangement, however, to date such attempts have been unsuccessful;

      (ii)  to fund the cost of a 12,000 square foot expansion of the Claridge's
            casino capacity,  the addition of  approximately  500 slot machines,
            and the  relocation of two  restaurants  and their  related  kitchen
            areas.  The  total  cost  of  this  expansion,  which  became  fully
            operational on June 30, 1994, was approximately $12.7 million; and

      (iii) the acquisition of land, at a cost of $7.5 million,  adjacent to New
            Claridge's existing valet-parking  facility,  which was used for the
            construction of a self-parking facility. Through September 30, 1996,
            approximately  $19.1  million had been  expended to fund the cost of
            the garage,  which  opened on June 28,  1996;  the total cost of the
            garage is expected to be  approximately  $20 million,  excluding the
            cost of interest capitalized during the construction period.

In addition,  on February 23, 1996, the  Corporation  acquired an option to pur-
chase,  at  a  discount from the carrying value, the Contingent Payment,  which 
was granted in 1989 and now held in a trust for the benefit of the Valley of the
Sun United Way. The purchase price of the option was $1 million,  and the option
may be  exercised  any time prior to December  31,  1997.  Upon  exercise of the
option, the purchase price of the Contingent Payment would be $10 million,  plus
interest  at 10% per annum  for the  period  January  1, 1997 to the date of the
payment of the purchase  price,  if the purchase occurs after December 31, 1996.
The  purchase  price may also  increase  if future  distributions  to  Releasing
Partners/Investors  exceed  certain  amounts.  

At  September  30,  1996,  the  Corporation  had a working  capital  deficit  of
$6,161,000 as compared to working  capital of  $15,122,000 at December 31, 1995.
This decrease in working  capital is principally  attributable  to a decrease in
cash and cash  equivalents  of  $25,142,000  (primarily  due to payments for the
construction of the  self-parking  garage and interest due on the First Mortgage
Notes) and an increase  in  accounts  payable of  $1,214,000  (primarily  due to
accruals related to the construction of the self-parking  garage),  offset by an
increase in accounts  receivable of $1,583,000  (principally the current portion
of the Expandable Wraparound Mortgages due from the Partnership),  a decrease in
accrued  payroll and related  benefits of  $614,000,  and a decrease in interest
payable on the First Mortgage Notes of $2,496,000.  Working capital at September
30, 1995 was $20,456,000. Current liabilities at September 30, 1996 and December
31, 1995 included  deferred rental  payments of $15,078,000,  and a $3.6 million
loan from the  Partnership  plus  accrued  interest  thereon  of  $3,150,000  at
September 30, 1996 and $2,826,000 at December 31, 1995.  These amounts will only
be payable upon (i) a sale or refinancing of the Claridge;  (ii) full or partial
satisfaction of the Expandable Wraparound Mortgage;  and (iii) full satisfaction
of any first  mortgage  then in place.  If these  amounts  were not  included in
current liabilities, the Corporation's working capital at September 30, 1996 and
December 31, 1995 would have been $15,667,000 and $36,626,000, respectively.

During the first nine  months of 1996,  the  Corporation's  working  capital was
reduced  substantially  as a result of significant  operating losses during that
period,  as well as significant  capital  expenditures  for  construction of the
self-parking  garage,  with  cash  flows  used in  operating  activities  (i.e.,
negative cash flow) amounting to $17,531,000,  and cash flows used in investment
activities  during that period amounting to $7,611,000.  During the same period,
the  Corporation's  Adjusted  EBITDA  (as  defined  below)  was only  $2,338,000
compared to $17,431,000  for the first nine months of 1995.  While  expenditures
for  construction of the  self-parking  garage have largely been completed,  the
factors that  contributed  to the negative cash flow and  substantially  reduced
Adjusted EBITDA for the first nine months of 1996,  including  increased and new
competition in the Atlantic City casino market, appear to be continuing.

While the  Corporation's  operating  results  have  improved  somewhat and could
continue to improve  over the  remainder  of the year with the  reopening of its
self-parking  garage in  mid-September,  the Corporation  anticipates that it is
more likely for there to be a  continuation  of the current  level of  operating
results for the foreseeable future.  Although the Corporation has taken steps to
conserve its cash by reducing various  operating  expenses,  it is unlikely that
the  Corporation  will be able to meet its  obligation  to pay  interest  due on
February 1, 1997 on its 11 3/4% Notes due 2002. As a result, the Corporation, in
consultation  with its financial  advisor,  Dillon,  Read & Co., Inc., is in the
process of formulating a proposal to the holders of the Notes to restructure the
Corporation's  obligations under the Notes as outlined in Exhibit A to this [the
Claridge's] Form 10-Q. In broad terms, the proposed  restructuring may include a
reduction  in  the  debt   obligations   of  the   Corporation,   together  with
restructuring of certain of the Corporation's arrangements with the Partnership,
including  abating rent payable under the Operating  Lease with the  Partnership
and  extending  the  term  of  the  Expandable  Wraparound  Mortgage.  Any  such
restructuring may be accomplished in connection with a "prepackaged"  bankruptcy
proceeding involving the Corporation and its subsidiaries to which the principal
creditors  of  the  Corporation  and  its  subsidiaries   have  agreed.  If  the
Corporation is unable to reach agreement with the holders of the Notes and other
significant  creditors and with the Partnership  regarding  restructuring of the
Corporation's  obligations,  it is likely that the Corporation will need to seek
protection from its creditors in a  reorganization  proceeding under Chapter 11.
In addition,  the  Corporation,  together  with Dillon,  Read & Co., is pursuing
other strategic alternatives, including a possible sale of the company.

Assuming that the Corporation does not pay interest due on its 11 3/4% notes due
2002, management of the Corporation believes that the Corporation has sufficient
liquidity to meet its other  obligations in the ordinary course of its business.
Similarly,  if the Corporation's  obligations to the holders of the Notes and to
the  Partnership  are  restructured  as  discussed  above,   management  of  the
Corporation believes that the Corporation will have sufficient liquidity to meet
its  obligations  on any  restructured  debt that  replaces the Notes and to the
Partnership in the ordinary course of its operations.  There can, however, be no
assurance that this outcome will result.

For the nine months  ended  September  30,  1996,  cash flows used in  operating
activities  were  $17,531,000,  compared  to cash flows  provided  by  operating
activities of $4,708,000  for the same period of 1995; the increase in cash used
in operating activities was principally due to the increase in pre-tax net loss.
Cash flows used in investment activities for the nine months ended September 30,
1996 and 1995 were $7,611,000 and $3,988,000,  respectively.  Cash flows used in
investment activities in the first nine months of 1996 for additions to property
and equipment  include  expenditures  for the  construction of the  self-parking
garage  facility;  in the first nine months of 1995,  additions  to property and
equipment  included the cost of the  acquisition of the land on which the garage
facility is being constructed.

For the nine months  ended  September  30,  1996,  the  Corporation's  "Adjusted
EBITDA" was  $2,338,000,  compared to  $17,431,000  for the same period of 1995.
"EBITDA"   represents   earnings   before   interest   expense,   income  taxes,
depreciation, amortization, and other non-cash items. "Adjusted EBITDA" is equal
to "EBITDA" plus rent expense to the Partnership,  less interest income from the
Partnership,  less "Net Partnership Payments," which represent the Corporation's
net cash outflow to the Partnership.  Adjusted EBITDA is used by the Corporation
to evaluate its financial  performance  in comparison to other gaming  companies
with more traditional financial  structures.  Adjusted EBITDA may be used as one
measure of the Corporation's  historical ability to service its debt, but should
not be  considered  as an  alternative  to operating  income (as  determined  in
accordance  with generally  accepted  accounting  principles) as an indicator of
operating performance, or to cash flows from operating activities (as determined
in accordance  with generally  accepted  accounting  principles) as a measure of
liquidity,  or to other consolidated  income or cash flow statement data, as are
determined in accordance with generally accepted accounting principles.

The Hotel Assets are owned by the  Partnership  and leased by the Partnership to
New Claridge under the terms of the Operating Lease  originally  entered into on
October 31, 1983, and the Expansion Operating Lease, which covered the expansion
improvements  made to the Claridge in 1986. The initial terms of both leases are
scheduled  to expire on  September  30, 1998 and each lease  provides  for three
10-year  renewal  options at the election of New Claridge.  The Operating  Lease
requires  basic  rental  payments  to be  made  in  equal  monthly  installments
escalating annually up to $41,775,000 in 1997, and $32,531,000 for the remainder
of the initial lease term. Prior to the Corporation's 1989 restructuring,  basic
rent expense  (recognized  on a leveled  basis in accordance  with  Statement of
Financial Accounting Standards No. 13), was $31,902,000 per year. Therefore,  in
the early years of the lease term,  required cash  payments  under the Operating
Lease (not including the Expansion  Operating  Lease) were  significantly  lower
than the related expense  recognized for financial  reporting  purposes.  Rental
payments under the Expansion  Operating  Lease are adjusted  annually based on a
Consumer  Price  Index with any  increase  not to exceed two  percent  per year.
Pursuant to the Restructuring  Agreement,  the Operating Lease and the Expansion
Operating  Lease were amended to provide for the  abatement of $38.8  million of
basic rent  payable  through  1998 and the  deferral of $15.1  million of rental
payments, thereby reducing the Partnership's cash flow to an amount estimated to
be necessary  only to meet the  Partnership's  cash  requirements.  Effective on
completion of the 1989 restructuring,  lease expense recognized on a level basis
was reduced prospectively, based on a revised schedule of rent leveling based on
the agreed rental abatements.  At September 30, 1996 the Corporation had accrued
the maximum amount of $15.1 million of deferred rent  liability  under the lease
arrangements. The deferred rent liability will become payable (i) upon a sale or
refinancing  of the  Claridge;  (ii) upon full or  partial  satisfaction  of the
Expandable  Wraparound  Mortgage;  and (iii) upon full satisfaction of any first
mortgage then in place.  Also as of September  30, 1996,  $35.0 million of basic
rent had been abated.  The  remaining  $3.8  million of  available  abatement is
expected to be fully utilized by the first quarter of 1997.  Because the initial
term of the  Operating  Lease  continues  through  September  30,  1998,  rental
payments  after the $38.8  million  abatement is fully  utilized  will  increase
substantially  to  approximately  $39.5  million in 1997,  as  compared to $31.7
million (net of projected  abatement)  in 1996.  Additional  abatements  of rent
totaling  $500,000 are available as a result of the acquisition of the option to
purchase the Contingent  Payment,  and further abatements could become available
upon exercising the Contingent Payment option.

If New Claridge  exercises its option to extend the term of the Operating Lease,
basic rent during the renewal term will be calculated pursuant to a formula with
annual basic rent not to be more than $29.5 million or less than $24 million for
the  twelve  months  commencing  October 1, 1998,  and  subsequently,  not to be
greater than 10% more than the basic rent for the  immediately  preceding  lease
year in each lease year  thereafter.  If New  Claridge  exercises  its option to
extend  the term of the  Expansion  Operating  Lease,  basic  rent  also will be
calculated  pursuant to a formula  with annual basic rent not to be more than $3
million or less than $2.5 million for the twelve  months  commencing  October 1,
1998, and subsequently,  not to be greater than 10% more than the basic rent for
the immediately preceding lease year in each lease year thereafter.  If the term
of both leases is extended under their renewal options, the aggregate basic rent
payable during the initial years of renewal term will be significantly below the
1997 level.

If the  Partnership  should fail to make any  payment  due under the  Expandable
Wraparound Mortgage, New Claridge may exercise a right of offset against rent or
other payments due under the Operating  Lease and Expansion  Operating  Lease to
the extent of any such deficiency.

New Claridge is obligated under its Operating Lease with the Partnership to lend
the  Partnership,  at an annual  interest rate of 14%, any amounts  necessary to
fund the cost of furniture, fixtures and equipment replacements.  The Expandable
Wraparound  Mortgage,  granted by the Partnership to New Claridge,  by its terms
may secure up to $25 million of  additional  loans to the  Partnership  from New
Claridge to finance the  replacements  of furniture,  fixtures and equipment and
facility maintenance and engineering shortfalls. The advances to the Partnership
are in the form of FF&E Loans and are secured by the Hotel  Assets.  One half of
the FF&E Loan principal is due in the 48th month following the advance, with the
remaining  balance  due in the 60th month  following  the date of  issuance.  In
connection  with the  offering of $85 million of the Notes on January 31,  1994,
the Corporation  agreed to use not less than $8 million from the net proceeds of
the offering to finance internal improvements to the Claridge, which were funded
through  additional  FF&E  Loans.  In  connection   therewith,   the  Expandable
Wraparound  Mortgage  Loan  agreement as well as the  Operating  Lease,  and the
Expansion  Operating  Lease were amended to provide that the  principal on these
additional  FF&E  Loans  will be payable  at final  maturity  of the  Expandable
Wraparound Mortgage.  New Claridge is obligated to pay as additional rent to the
Partnership the debt service on the FF&E Loans.

The Expandable  Wraparound  Mortgage requires monthly  principal  payments to be
made by the  Partnership  to New  Claridge,  commencing  in the  year  1988  and
continuing  through the year 1998, in escalating  amounts  totaling $80 million.
The  Expandable  Wraparound  Mortgage,  which will mature on September 30, 2000,
bears  interest at an annual rate equal to 14% with the deferral  until maturity
of $20 million of certain interest payments which accrued between 1983 and 1988.
In addition,  in 1986 the principal amount secured by the Expandable  Wraparound
Mortgage  was  increased  to  provide  the  Partnership  with  funding  for  the
construction of an expansion improvement, which resulted in approximately 10,000
square feet of additional casino space and a 3,600 square foot lounge. Effective
August 28, 1986,  the  Partnership  commenced  making level monthly  payments of
principal  and interest  calculated  to provide for the repayment in full of the
principal  balance of this  increase in the  Expandable  Wraparound  Mortgage by
September 30, 1998. Under the terms of the Expandable  Wraparound Mortgage,  New
Claridge is not permitted to foreclose on the Expandable Wraparound Mortgage and
take ownership of the Hotel Assets so long as a senior  mortgage is outstanding.
The face amount outstanding of the Expandable  Wraparound  Mortgage at September
30, 1996 (including the  outstanding  FF&E Loans and the $20 million of deferred
interest) was $120.8 million.


                                     PART II


Item 6.    Exhibits and reports on Form 8-K

           (a)  Not applicable.
           (b)  No reports on Form 8-K were filed  during  the quarter  ended
September 30, 1996.


<PAGE>


                                   SIGNATURES



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

                                  Atlantic City Boardwalk Associates, L.P.
                                              Registrant





Date       November 13, 1996              /s/  Anthony C. Atchley
           -------------------------      --------------------------------------
                                          by Anthony C. Atchley, General Partner


Date       November 13, 1996              /s/  Gerald C. Heetland
        ----------------------------      --------------------------------------
                                          by Gerald C. Heetland, General Partner


Date       November 13, 1996              /s/  Anthony C. Atchley
        ----------------------------      --------------------------------------
                                          by  AC Boardwalk Partners Corporation,
                                              General Partner
                                          by  Anthony C. Atchley, President