<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                                QUARTERLY REPORT

   (Mark One)
     [ x ]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended   March 31, 2001
                                                 --------------

     [   ]      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 0-11287

                    THE CLARIDGE HOTEL AND CASINO CORPORATION
             (Exact name of registrant as specified in its charter)


                New York                                   22-2469172
   (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                  Identification Number)

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

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

                               ------------------


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


The number of shares outstanding of each class of the Registrant's Stock is as
follows:

                          Number of Shares Outstanding
                                  May 14, 2001
Class A Stock                      5,062,500


<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)

                               Index to Form 10-Q


                                                                       Page No.


PART I.                   FINANCIAL INFORMATION


               Item 1.    Financial Statements

                          Introductory Notes to Consolidated
                          Financial Statements                             2

                          Consolidated Balance Sheets at
                          March 31, 2001 (unaudited)
                          and December 31, 2000                            3

                          Consolidated Statements of Operations
                          for the three months ended March 31,
                          2001 (unaudited) and 2000 (unaudited)            4

                          Consolidated Statements of Cash Flows
                          for the three months ended March 31, 2001
                          (unaudited) and 2000 (unaudited)                 5

                          Notes to Consolidated Financial
                          Statements                                       6

               Item 2.    Management's Discussion and Analysis
                          of Financial Condition and Results
                          of Operations                                   12

PART II.                  OTHER INFORMATION

                          No information is provided under this
                          Section as the answers to Items 1 through 6
                          are either inapplicable or negative





                                        1

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)


                          PART I. FINANCIAL INFORMATION



Item 1.        Financial Statements

Introductory Notes to Consolidated Financial Statements

        The accompanying consolidated financial statements have been prepared by
The Claridge Hotel and Casino Corporation ("Corporation") 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 consolidated financial position of The Claridge
Hotel and Casino Corporation and its wholly- owned subsidiaries, The Claridge at
Park Place, Incorporated ("New Claridge") and Claridge Gaming Incorporated
("CGI") at March 31, 2001 and December 31, 2000, and the results of their
operations for the three months ended March 31, 2001 and 2000 and their cash
flows for the three months ended March 31, 2001 and 2000. All adjustments made
are of a normal recurring nature.

        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 have been
omitted. It is suggested that these financial statements be read in conjunction
with the financial statements and the related disclosures contained in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 2000
filed with the Securities and Exchange Commission.

        As discussed in Note 1 to the consolidated financial statements, the
Corporation filed for reorganization under Chapter 11 of the United States
Bankruptcy Code on August 16, 1999. In addition, Atlantic City Boardwalk
Associates, L.P. (the "Partnership") filed for reorganization under Chapter 11
of the United States Bankruptcy Code on October 5, 1999. The accompanying
consolidated financial statements do not claim to reflect or provide for the
consequences of the bankruptcy proceedings. In particular, such consolidated
financial statements do not show (i) as to assets, their realizable value on a
liquidation basis or their availability to satisfy liabilities; (ii)
contingencies, or the status and priority thereof; or (iii) as to stockholder
accounts, the effect of any changes that may be made in the Corporation's
business. The eventual outcome of these matters is not presently determinable.

        The results of operations for the three months ended March 31, 2001 and
2000 are not necessarily indicative of the operating results to be expected for
the full year. Historically, the gaming industry in Atlantic City, New Jersey
has been seasonal in nature with peak demand months occurring during the summer
season.



<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
                           Consolidated Balance Sheets
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                       (Unaudited)
                                                                        March 31,             December 31,
                                                                           2001                   2000
                                                                        ---------              ---------
<S>                                                                     <C>                       <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                             $  18,227                 19,466
  Receivables, net (including $5,588
    at March 31, 2001 and $6,140 at December 31,
    2000, due from the Partnership)                                         7,212                  8,177
  Other current assets                                                      4,065                  3,954
                                                                        ---------              ---------
        Total current assets                                               29,504                 31,597
                                                                        ---------              ---------

Property and equipment, net (note 4)                                       30,872                 31,004
Long-term receivables due from the
  Partnership (note 3)                                                     39,138                 39,318
Intangible assets and deferred charges                                        803                    889
Other assets                                                                4,589                  4,285
                                                                        ---------              ---------

                                                                        $ 104,906                107,093
                                                                        =========              =========

LIABILITIES & STOCKHOLDERS' DEFICIENCY
Current Liabilities Not Subject to Compromise:
  Current maturities of long-term debt (note 6)                         $     -0-                      1
  Accounts payable (note 9)                                                 3,781                  4,080
  Other current liabilities (notes 5 and 9)                                17,391                 16,759
                                                                        ---------              ---------
        Total current liabilities not subject to compromise                21,172                 20,840
                                                                        ---------              ---------

Liabilities Subject to Compromise (note 9)                                146,046                146,046

Long-term debt (notes 6 and 9)                                                -0-                    -0-
Deferred income taxes (notes 8 and 9)                                       1,865                  1,865
Other noncurrent liabilities (notes 7 and 9)                                1,225                  1,244

Stockholders' deficiency:
  Common stock                                                                  5                      5
  Additional paid in capital                                                5,048                  5,048
  Accumulated deficit                                                     (70,455)               (67,955)
                                                                        ---------              ---------

        Total stockholders' deficiency                                    (65,402)               (62,902)
                                                                        ---------              ---------

                                                                        $ 104,906                107,093
                                                                        =========              =========
</TABLE>



          See accompanying notes to consolidated financial statements.

                                        3

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
                      Consolidated Statements of Operations
               For the Three Months Ended March 31, 2001 and 2000
                      (in thousands except per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                               2001                  2000
                                                                             --------              --------
<S>                                                                          <C>                     <C>
Revenues:
        Casino                                                               $ 38,542                38,760
        Hotel                                                                   2,179                 2,152
        Food and beverage                                                       4,395                 4,561
        Interest from the Partnership                                           2,154                 2,267
        Interest, other                                                            77                    38
        Other                                                                     621                   704
                                                                             --------              --------
                                                                               47,968                48,482
         Less promotional allowances (note 2)                                   5,044                 5,096
                                                                             --------              --------
              Net revenues                                                     42,924                43,386
                                                                             --------              --------

Costs and expenses:
        Casino                                                                 24,433                23,606
        Hotel                                                                     727                   637
        Food and beverage                                                       1,402                 1,371
        Other                                                                     872                   983
        Rent expense to the Partnership                                         6,199                 6,740
        Rent expense, other                                                       258                   284
        General and administrative                                              6,771                 6,157
        Gaming taxes                                                            3,078                 3,088
        Reinvestment obligation expense                                           174                   175
        Provision for uncollectible accounts                                       61                   157
        Depreciation and amortization                                             525                   371
        Interest expense (contractual interest of $3,232 in 2001
          and $2,920 in 2000)                                                     -0-                    27
                                                                             --------              --------
             Total costs and expenses                                          44,500                43,596
                                                                             --------              --------

Loss before reorganization items                                               (1,576)                 (210)
Reorganization items:
        Professional fees                                                      (1,032)               (1,074)
        Interest earned from accumulated cash resulting
              from Chapter 11 proceeding                                          108                   143
                                                                             --------              --------
                                                                                 (924)                 (931)
                                                                             --------              --------


Net loss                                                                     $ (2,500)               (1,141)
                                                                             ========              ========

Net loss per share (based on 5,062,500 weighted
  average shares outstanding for the three months
  ended March 31, 2001 and 2000)                                             $   (.49)                 (.23)
                                                                             ========              ========

</TABLE>


          See accompanying notes to consolidated financial statements.

                                        4

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
                      Consolidated Statements of Cash Flows
               For the Three Months Ended March 31, 2001 and 2000
                                 (in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                         2001                   2000
                                                                                       --------              --------
<S>                                                                                    <C>                     <C>
Cash flows from operating activities:
     Net loss                                                                          $ (2,500)               (1,141)
     Adjustments to reconcile net loss to net cash
       (used in) provided by operating activities:
          Depreciation and amortization                                                     525                   371
          Deferred rent to the Partnership                                                  -0-                   310
          Reinvestment obligation expenses                                                  174                   175
          Gain on disposal of assets                                                         (2)                  (58)
          Reorganization items                                                              924                   931
          Change in assets and liabilities:
             Decrease (increase) in receivables, net, excluding
               current portion of long-term receivables                                     419                  (692)
             (Increase) in other current assets                                            (111)                  (70)
             (Decrease) increase in accounts payable                                       (299)                  835
             Increase in other current liabilities                                          476                   827
             (Decrease) increase in other noncurrent liabilities                            (19)                   51
                                                                                       --------              --------
                      Net cash (used in ) provided by operating
                          activities before reorganization items                           (413)                1,539

              Reorganization items:
                 Professional fees paid                                                    (876)                  -0-
                 Interest earned on accumulated cash resulting from
                    Chapter 11 proceeding                                                   108                   143
                                                                                       --------              --------
                      Net cash (used in ) provided by operating activities               (1,181)                1,682
                                                                                       --------              --------

Cash flows from investment activities:
     Increase in intangible assets and deferred charges                                     (79)                  (59)
     Additions to property and equipment                                                   (228)                 (480)
     Increase in other assets                                                              (478)                 (490)
     Proceeds from disposal of assets                                                         2                    36
     Collection of long-term receivables                                                    726                   676
                                                                                       --------              --------
                      Net cash used in investment activities                                (57)                 (317)
                                                                                       --------              --------

Cash flows from financing activities -
     Payment of long-term debt                                                               (1)                  (47)
                                                                                       --------              --------

                      (Decrease) increase in cash and cash equivalents                   (1,239)                1,318

Cash and cash equivalents at beginning of period                                         19,466                16,834
                                                                                       --------              --------

Cash and cash equivalents at end of period                                             $ 18,227                18,152
                                                                                       ========              ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        5

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
                   Notes to Consolidated Financial Statements

1.      Significant Events and Basis of Presentation

        The Corporation has experienced recurring losses and deterioration in
        its cash flow since 1996, which has affected the Corporation's ability
        to continue to meet its obligation to pay interest on its first mortgage
        notes (the "Notes"). The Corporation did not pay the interest due on
        August 2, 1999 on the Notes, and, on August 16, 1999, the Corporation
        and New Claridge filed voluntary petitions under Chapter 11 of the
        United States Bankruptcy Code (the "Bankruptcy Code") in the United
        States Bankruptcy Court for the District of New Jersey (the "Bankruptcy
        Court"). The Corporation continues to operate the business, as set forth
        in the Bankruptcy Code, under the supervision of the Bankruptcy Court,
        as a debtor-in- possession. The Partnership filed a voluntary petition
        under Chapter 11 of the Bankruptcy Code on October 5, 1999.

        On January 27, 2000, the Corporation, New Claridge, and the Partnership
        filed a joint plan of reorganization and disclosure statement with the
        Bankruptcy Court. On April 5, 2000, in response to objections raised by
        the trustee for the noteholders, the United States Trustee, and others,
        the Corporation, New Claridge, and the Partnership filed an amended plan
        of reorganization and disclosure statement. The adequacy of the amended
        plan was approved by the Bankruptcy Court on May 9, 2000, which allowed
        for the amended plan to be submitted to the Corporation's creditors for
        a vote. On July 18, 2000, the Corporation announced the results of that
        vote: the holders of the Corporation's Notes voted to reject the amended
        plan; management of the Corporation believes that the unsecured
        creditors voted to accept the amended plan. The Corporation had intended
        to pursue confirmation of the amended plan under Section 1129B of the
        Bankruptcy Code, which allows for the Bankruptcy Court judge to confirm
        the amended plan through the "cramdown" procedure, at the confirmation
        hearing, which was scheduled to begin September 6, 2000.

        However, on August 11, 2000, the Bankruptcy Court judge granted
        permission to the Official Secured Noteholders Committee (the
        "Committee") to hire an investment banker to attempt to locate potential
        investors to submit competing reorganization plans. The two primary
        offers which were considered by the Corporation's Board of Directors
        (the "Board") were submitted by Park Place Entertainment Corporation
        ("PPE") (owner and operator of Bally's Park Place, Incorporated, the
        Atlantic City Hilton Casino Resort, and Caesars Atlantic City casinos in
        Atlantic City) and GB Holdings, Incorporated ("GBHI") (owner and
        operator of the Sands Hotel and Casino in Atlantic City). After
        evaluation by the Board and its financial and legal advisors, the
        Corporation informed the Bankruptcy Court judge that it intended to
        pursue the bid submitted by PPE. The GBHI offer expired by its own terms
        on October 13, 2000.

        On November 28, 2000, the Corporation filed a second amended joint plan
        of reorganization and a second amended disclosure statement, which
        included an executed copy of the purchase and sale agreement between New
        Claridge, the Partnership, and PPE. The second amended joint plan of
        reorganization provided for a sale of substantially all of the assets of
        New Claridge and the Partnership to PPE. Certain amendments were
        subsequently made to this plan, and on March 27, 2001, the fourth
        amended joint plan of reorganization and fourth amended disclosure
        statement (the "Plan") were approved by the Bankruptcy Court to be
        submitted to the creditors for a vote. Pursuant to the terms of the
        Plan, the secured noteholders would receive approximately an 83%
        recovery on their claims of $90.5 million, and the unsecured creditors
        would receive approximately 61.5% of their claims.

                                        6

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
             Notes to Consolidated Financial Statements (continued)

1.      Significant Events and Basis of Presentation (continued)

        On May 11, 2001, the Corporation announced the results of the voting of
        its creditors regarding the Plan. The holders of the Notes voted to
        accept the Plan. The result of the vote from the unsecured creditors has
        not been finalized; however, the Corporation believes that the unsecured
        creditors also voted to accept the Plan. The Corporation intends to move
        forward to have the Plan confirmed. The confirmation hearing is
        scheduled for May 16, 2001.

        The accompanying consolidated financial statements have been prepared in
        conformity with generally accepted accounting principles and in
        accordance with Statement of Position 90-7, "Financial Reporting By
        Entities in Reorganization under the Bankruptcy Code," and include
        disclosure of liabilities subject to compromise (see Note 9). The
        accompanying consolidated financial statements do not show (i) as to
        assets, their realizable value on a liquidation basis or their
        availability to satisfy liabilities; (ii) contingencies, or the status
        and priority thereof; or (iii) as to stockholder accounts, the effect of
        any changes that may be made in the Corporation's business. The eventual
        outcome of these matters is not presently determinable.

2.      Promotional Allowances

        The retail value of complimentary rooms, food and beverages and other
        complimentaries furnished to patrons is included in gross revenues and
        then deducted as promotional allowances. The estimated cost of providing
        such promotional allowances to casino patrons for the three months ended
        March 31, 2001 and 2000 has been charged to casino operating expenses as
        follows (in thousands):
                                              2001                 2000
                                              ----                 ----
        Hotel                               $ 1,104                 992
        Food and beverage                     3,181               3,308
        Other (Entertainment)                    87                  65
                                            -------               -----
        Total                               $ 4,372               4,365
                                            =======               =====

3.      Long-Term Receivables

        Long-term receivables consist of the following amounts due from the
        Partnership (in thousands):
<TABLE>
<CAPTION>
                                                             March 31,     December 31,
                                                               2001            2000
                                                             --------        --------
<S>                                                          <C>              <C>
        Expandable Wraparound Mortgage 14%,
          maturities through September 30, 2000
          (net of $2,211,000 discount at March 31, 2001
          and December 31, 2000)                              $47,689          47,839
        Deferred Expandable Wraparound
          Mortgage interest receivable, due
          September 30, 2000                                   20,000          20,000
        FF&E promissory notes, 14%                              9,044           9,074
        Allowance for impairment                              (37,595)        (37,595)
                                                             --------        --------
                                                             $ 39,138          39,318
                                                             ========        ========
</TABLE>

                                        7

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
             Notes to Consolidated Financial Statements (continued)

3.      Long-Term Receivables (continued)

        As a result of the Corporation's and New Claridge's filing for
        reorganization under Chapter 11 on August 16, 1999, as well as the
        Partnership's Chapter 11 filing on October 5, 1999, the realizable value
        of the Expandable Wraparound Mortgage has become impaired. Therefore,
        during the fourth quarter of 1999, the Corporation recorded an
        adjustment to write-down the balance of the Expandable Wraparound
        Mortgage receivable to an amount estimated to be the realizable value of
        the Hotel Assets. The total amount of this write-down was $37.6 million.

4.      Property and Equipment

        Property and equipment consists of the following:

                                                         March 31,  December 31,
                                                            2001       2000
                                                          -------      -------
                                                             (in thousands)
        Gaming equipment                                  $12,123      12,345
        Land and land improvements                          7,598       7,598
        Self-parking garage facility                       20,070      20,070
        Building improvements                               1,272       1,260
        Leasehold improvements                                745         745
        Capital lease asset                                   822         822
        Other furniture, fixtures, and equipment            1,793       1,755
                                                          -------     -------
                                                           44,423      44,595
        Less accumulated depreciation and amortization     13,551      13,591
                                                          -------     -------

        Net property and equipment                        $30,872      31,004
                                                          =======     =======

5.      Other Current Liabilities

        Other current liabilities consist of the following:


                                                March 31,   December 31,
                                                  2001         2000
                                                 -------     -------
                                                    (in thousands)
        Deferred rent                            $   725         800
        Accrued payroll and related benefits       9,289       8,761
        Auto/general insurance reserves              971         831
        Reorganization costs                       3,010       2,854
        Other current liabilities                  3,396       3,513
                                                 -------     -------
                                                 $17,391      16,759
                                                 =======     =======

        Effective September 30, 1998, the Operating Lease and Expansion
        Operating Lease were further amended, pursuant to a Sixth Amendment to
        the Operating Lease and Fifth Amendment to the Expansion Operating Lease
        (the "Sixth Amendment"). The Sixth Amendment provided for the deferral
        of $1.1 million of rent in either February 1999 or March 1999, dependent
        upon certain conditions being met. These conditions were met, and the
        $1.1 million of rent was deferred in March 1999. The $1.1 million of
        basic rent deferred is paid

                                        8
<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
             Notes to Consolidated Financial Statements (continued)

5.      Other Current Liabilities (continued)

        to the Partnership in monthly installments of $25,000 commencing
        January 1, 2000 until paid in full (subject to acceleration under
        certain circumstances).

        As of March 31, 2001 and December 31, 2000, deferred rent, current
        (which resulted from the 1989 restructuring transaction); accrued
        interest, First Mortgage Notes; accrued interest due to Partnership; and
        the auto and general liability reserves incurred prior to August 16,
        1999 are included in "Liabilities Subject to Compromise" (see Note 9),
        as a result of the Corporation's filing for reorganization under Chapter
        11 (see Note 1) on August 16, 1999.

6.      Long-Term Debt

        On January 31, 1994, the Corporation completed an offering of $85
        million of First Mortgage Notes (the "Notes") due 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 would be subordinated to
        liens that might be placed on those gaming and other assets to secure
        any future revolving credit line arrangement. On January 28, 1997, New
        Claridge entered into an agreement to subject the new self-parking
        garage to the lien of the mortgage; such lien will not be subordinated
        to any lien which may be placed on New Claridge's 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. A portion of the net proceeds of $82.2 million was used to repay
        in full the then 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 a first
        mortgage. In conjunction with the full satisfaction of the Loan
        Agreement, the Corporation's $7.5 million revolving credit line
        arrangement was terminated.

        As of March 31, 2001 and December 31, 2000, the principal amount due on
        the Notes is included in "Liabilities Subject to Compromise" (see Note
        9), as a result of the Corporation's filing for reorganization under
        Chapter 11 (see Note 1) on August 16, 1999. In addition, interest on the
        Notes ceased to accrue as of August 16, 1999. The interest payable on
        the Notes, as accrued through August 16, 1999, of $5,440,000, is also
        included in "Liabilities Subject to Compromise" (see Note 9).

7.      Other Noncurrent Liabilities

        Other noncurrent liabilities consist of the following:
                                             March 31,            December 31,
                                                2001                   2000
                                             ---------            ------------
                                                       (in thousands)
        License agreement                     $  1,200                1,219
        Other                                       25                   25
                                              --------               ------
                                              $  1,225                1,244
                                              ========               ======

        Pursuant to the Restructuring Agreement, Del Webb Corporation ("Webb")


                                        9

<PAGE>

           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
             Notes to Consolidated Financial Statements (continued)

7.      Other Noncurrent Liabilities (continued)

        retained an interest, which was assigned to a trustee for the benefit of
        the Valley of the Sun United Way on April 2, 1990, equal to $20 million
        plus interest at a rate of 15% per annum, compounded quarterly,
        commencing December 1, 1988, in any proceeds ultimately recovered from
        operations and/or the sale or refinancing of the Claridge facility in
        excess of the first mortgage loan and other liabilities ("Contingent
        Payment"). Consequently, New Claridge has deferred the recognition of
        $20 million of forgiveness income with respect to the Contingent Payment
        obligation. Interest on the Contingent Payment has not been recorded in
        the accompanying consolidated financial statements since the likelihood
        of paying such amount is not considered probable at this time. As of
        March 31, 2001, accrued interest would have amounted to approximately
        $103 million.

        In connection with the restructuring, Webb agreed to grant those
        investors in the Corporation and the Partnership ("Releasing
        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 investors provided
        releases and became Releasing Investors. Payments to Releasing Investors
        are to be made in accordance with a schedule of priorities, as defined
        in the Restructuring Agreement.

        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 of $1 million was recorded as an offset to the
        Contingent Payment liability which had been included in other noncurrent
        liabilities on the Corporation's consolidated balance sheet. The option
        could have been exercised any time prior to December 31, 1997. Given its
        operating results, the Corporation was not able to exercise this
        Contingent Payment option, and it expired in accordance with its terms
        on December 31, 1997.

        As of March 31, 2001 and December 31, 2000, the Contingent Payment is
        included in "Liabilities Subject to Compromise" (see Note 9), as a
        result of the Corporation's filing for reorganization under Chapter 11
        (see Note 1) on August 16, 1999. As proposed under the terms of the
        Plan, the Contingent Payment and the Contingent Payment Rights would be
        extinguished, and the holders of the Contingent Payment and Contingent
        Payment Rights would not receive any distributions in respect of these
        items.

        On February 28, 1997, New Claridge entered into an agreement with
        Thermal Energy Limited Partnership I ("Atlantic Thermal"), pursuant to
        which Atlantic Thermal was granted an exclusive license for a period of
        twenty years (which was subsequently extended to twenty-five years) to
        use, operate, and maintain certain steam and chilled water production
        facilities at the Claridge. In consideration for this license agreement,
        Atlantic Thermal paid New Claridge $1.5 million. This amount is being
        recognized as income over the term of the agreement, commencing April
        1997.

8.      Income Taxes

        As of March 31, 2001, the Corporation had net operating loss
        carryforwards for federal income tax purposes of approximately $44.3
        million; none expire before the year 2016. These net operating loss
        carryforwards are available to offset future federal taxable income, if
        any. The Corporation also has tax credit carryforwards for income tax
        purposes of approximately $1,121,000, which are available to reduce
        future federal income taxes, if any, through 2002. The availability of
        the net operating loss and tax credit carryforwards will be further
        subject to the tax consequences of a plan of reorganization approved by
        the Bankruptcy Court.

                                       10

<PAGE>
           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                (Debtor-In-Possession effective August 16, 1999)
             Notes to Consolidated Financial Statements (continued)

8.      Income Taxes (continued)

        During 1995, the Corporation received notice from the Internal Revenue
        Service ("IRS") asserting deficiencies in Federal corporate income taxes
        for the Corporation's 1990 and 1991 taxable years. Many of the proposed
        adjustments to the Corporation's tax returns have been settled with no
        adverse impact to the Corporation's consolidated financial statements.
        There was a remaining IRS asserted deficiency for the 1990 and 1991
        taxable years. In January 1999, the Corporation reached a settlement
        agreement with the IRS District Counsel, which was confirmed by the
        United States Tax Court on March 4, 1999. This settlement agreement did
        not have a material impact on the Corporation's consolidated financial
        statements. As of March 31, 2001 and December 31, 2000, the amount of
        this settlement, including interest, has been included in "Liabilities
        Subject to Compromise" (see Note 9), as a result of the Corporation's
        filing for reorganization under Chapter 11 (see Note 1) on August 16,
        1999.

9.      Liabilities Subject to Compromise

        Liabilities subject to compromise are subject to future adjustments
        depending on Bankruptcy Court actions and further developments with
        respect to disputed claims. Payment of these liabilities may not be made
        except pursuant to an approved plan of reorganization or under the order
        of the Bankruptcy Court while the Corporation continues to operate as
        debtor-in-possession. Liabilities subject to compromise consist of the
        following (in thousands):

                                                    March 31,    December 31,
                                                       2001          2000
                                                    --------       -------
        Accounts payable and accrued expenses      $   3,158         3,158
        11 3/4%  Notes                                85,000        85,000
        Accrued interest                               9,832         9,832
        Loan from the Partnership                      3,600         3,600
        Deferred rent due to the Partnership          23,078        23,078
        Contingent Payment                            19,000        19,000
        Auto and general liability reserves              771           771
        Other                                          1,607         1,607
                                                    --------       -------
                                                    $146,046       146,046
                                                    ========       =======

        Accrued interest as of March 31, 2001 and December 31, 2000 of
        $9,832,000 consists of $5,440,000 of interest due on the Notes, and
        $4,392,000 of interest due on the $3.6 million loan from the
        Partnership. Interest on both of these items ceased to accrue as of
        August 16, 1999.

10.     Claridge License Renewal

        On September 20, 2000, New Claridge was issued a one-year casino license
        by the New Jersey Casino Control Commission (the "Commission") for the
        period commencing September 30, 2000. Due to the uncertainty concerning
        the disposition of New Claridge's bankruptcy proceedings, the Commission
        elected, for the second year in a row, to issue the one-year license,
        rather than the typical four-year license. Additionally, the casino
        license renewal contains certain financial reporting conditions and
        requirements consistent with the previous license conditions, and with
        the manner in which the Commission has relicensed other casino licensees
        who have filed voluntary petitions under Chapter 11 in the past.

                                       11

<PAGE>

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

Results of Operations for the Three Months Ended March 31, 2001

        The Corporation had a net loss of $2,500,000 for the three months ended
March 31, 2001, compared to a net loss of $1,141,000 for the same period of
2000.

        Total casino revenue earned by New Claridge during the first quarter of
2001 was $38,542,000, slightly lower than casino revenues earned during the
first quarter of 2000 of $38,760,000. Citywide casino revenues for the first
quarter of 2001, as reported, were also slightly lower than the first quarter of
2000.

        During the first three months of 2001, New Claridge's table games drop
(the amount of gaming chips purchased by patrons) increased 3.1% over the same
period of 2000. In addition, the "hold" percentage (the percentage of win to
drop) increased to 13.8% in the first quarter of 2001, from 13.5% in the first
quarter of 2000. As a result, New Claridge's revenue from table games during the
first three months of 2001 was $9,678,000, an increase of 4.9% over the same
period of 2000. Citywide, table games drop and revenue for the first three
months of 2001, as reported, declined 4.3% and 5.2%, respectively, from results
reported for the first three months of 2000.

        New Claridge's slot machine revenue for the first quarter of 2001 was
$28,864,000, reflecting a decline of 2.3% from slot machine revenue of
$29,530,000 for the first quarter of 2000. Citywide slot machine revenues for
the first quarter of 2001, as reported, increased 1.8% over the same period of
2000. The average number of slot machines available citywide during the first
three months of 2001, as reported, increased 3.0% over the average number
available during the same period of 2000, while the average number of slot
machines available at the Claridge increased .6% over the first quarter of 2000.

        New Claridge's marketing programs, which are similar in nature to other
Atlantic City casinos, include offering promotional incentives, primarily in the
form of coin, to customers who arrive by bus at the Claridge. During the first
quarter of 2001, approximately 168,000 patrons arrived at the Claridge by bus,
and were issued a total of $2,968,000 of coin incentives, for an average
incentive per patron of $18. This compares to the first quarter of 2000, when
approximately 160,000 patrons arrived by bus at the Claridge, and were issued a
total of $2,980,000 of coin incentives, for an average of $19 per patron. In
addition to the bus programs, all Atlantic City casinos, including New Claridge,
offer promotional incentives to their customers through direct marketing
programs, based on their level of gaming activity. New Claridge issued
approximately $2,057,000 of coin incentives through its direct marketing
programs during the first quarter of 2001, comparable to the $2,050,000 of coin
incentives issued through these programs during the same period of 2000.

        Hotel revenues for the first three months of 2001 totaled $2,179,000,
reflecting a 1.2% increase over the first quarter of 2000. Hotel occupancy
during the first quarter of 2001 was 85.0%, compared to 82.8% during the first
quarter of 2000, while the average room rate of $56 in 2001 was in line with
2000. Food and beverage revenues for the first quarter of 2001 of $4,395,000
were 3.6% lower than the same period of 2000, primarily due to lower revenue
from complimentary beverages served on the casino floor. The total number of
covers (meals served) was approximately 205,000, at an average price per cover
of $14.07 during the first quarter of 2001, compared to approximately 211,000
covers, at an average price per cover of $13.75, during the first quarter of
2000.

        Total costs and expenses for the first quarter of 2001 were $44,500,000,
reflecting an increase of 2.1% over the first quarter of 2000. Casino operating
expenses increased approximately 3.5%, primarily due to increased table games
payroll costs as a result of the increased business volume, as well as increased
marketing costs for promotional giveaways. Hotel expenses increased primarily
due to the increase in hotel occupancy. General and administrative expenses
increased primarily due to increased advertising expenditures and higher energy
costs.

        Reorganization items include professional fees incurred as a result of
the Corporation's filing for

                                       12

<PAGE>

reorganization under Chapter 11 of $1,032,000 and $1,074,000 for the first
quarters of 2001 and 2000, respectively, offset by interest earned from the
investment of accumulated cash resulting from the Chapter 11 filing of $108,000
and $143,000 for the first quarters of 2001 and 2000, respectively.

Liquidity and Capital Resources

Financial Condition

        On January 31, 1994, the Corporation completed an offering of $85
million of First Mortgage Notes (the "Notes"), due 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 New Claridge's gaming and other assets, which lien
would be subordinated to liens that might be placed on those gaming and other
assets to secure any future revolving credit line arrangement. On January 28,
1997, New Claridge entered into an agreement to subject the new self-parking
garage to the lien of the mortgage; such lien will not be subordinated to any
liens which may be placed on New Claridge's 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.

        The net proceeds of the Notes, totaling $82.2 million, were used as
follows (i) to repay the then outstanding debt of the Corporation under the
Revolving Credit and Term Loan Agreement of approximately $35 million, including
the outstanding balance of the Corporation's revolving credit line, which was
secured by a first mortgage; (ii) to expand the casino capacity of the Claridge
by 12,000 square feet in 1994, including the addition of approximately 500 slot
machines and the relocation of two restaurants and their related kitchens, at a
cost of approximately $12.7 million; (iii) to purchase property in 1995 and
construct on that property a self-parking garage, which opened in 1996, at a
cost (excluding capitalized interest of approximately $2.2 million) of
approximately $28 million (of which approximately $7.5 million represents the
cost of acquiring the land and approximately $20.5 million represents the costs
attributable to building the garage facility); and (iv) to acquire the
Contingent Payment Option (see Note 7, "Other Noncurrent Liabilities") at a cost
of $1 million. With the completion of the construction of the self-parking
garage, the proceeds of the offering of the Notes had largely been expended.

        The Corporation has experienced recurring losses and deterioration in
its cash flow since 1996, which has affected the Corporation's ability to meet
its obligation to pay interest on the Notes. The Corporation did not pay the
interest due August 2, 1999 on the Notes and on August 16, 1999, the Corporation
and New Claridge filed voluntary petitions under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
for the District of New Jersey (the "Bankruptcy Court"). The Partnership filed a
voluntary petition under Chapter 11 of the Bankruptcy Code on October 5, 1999.

        Management of the Corporation believes that this filing permitted the
Corporation to conserve its cash pending a restructuring of its financial
obligations in the Chapter 11 proceeding. As of March 31, 2001, the Corporation
had approximately $18.2 million of cash and cash equivalents. General and
administrative expenses, primarily for professional fees, have increased as a
result of the bankruptcy proceeding. Through March 31, 2001, such expenses have
totaled approximately $6.8 million, of which approximately $3.8 million has been
paid as of March 31, 2001.

        The Corporation continues to operate the business, as set forth in the
Bankruptcy Code, under the supervision of the Bankruptcy Court, as a
debtor-in-possession. As debtor-in-possession, the Corporation is authorized to
operate its business, but may not engage in transactions outside of the normal
course of business without the approval of the Bankruptcy Court. Further, the
Corporation is subject to operating within certain weekly cash budgets which
have been approved by the Bankruptcy Court pursuant to certain orders
authorizing the use of its

                                       13

<PAGE>

cash. As of the petition date, actions to collect prepetition indebtedness are
stayed, and other contractual obligations may not be enforced against the
Corporation. In addition, the Corporation may reject executory contracts and
lease obligations, and parties affected by these rejections may file claims with
the Bankruptcy Court in accordance with the reorganization process. As part of
the "first day orders," the Bankruptcy Court approved the Corporation's payment
of prepetition employee compensation, benefits and reimbursable employee
expenses, as well as to continue to honor all existing employee benefit plans
and policies. In addition, the Bankruptcy Court approved the payment of certain
prepetition vendor claims, certain prepetition guest-related claims (such as
outstanding direct mail coupons, progressive jackpots, and safekeeping deposits)
and prepetition payroll, gaming and other taxes and fees.

        While the Corporation and its subsidiaries have sustainable operations,
the cash generated by those operations are not sufficient to (i) permit the
Corporation to meet the debt service on the currently outstanding Notes; (ii) to
make significant capital improvements that management believes are necessary to
improve the Claridge's competitive position in the Atlantic City casino market;
and (iii) regularly make capital improvements in the future to maintain that
competitive position. Accordingly, management of the Corporation intended to
seek, in the Chapter 11 proceeding, to reduce the Corporation's debt obligations
to a level that it believes is consistent with the sustainable level of cash to
be generated by the Claridge. At the same time, management intended to seek to
simplify the ownership structure of the Claridge as between the Corporation, New
Claridge and the Partnership. On January 27, 2000, the Corporation, New
Claridge, and the Partnership filed a joint plan of reorganization and
disclosure statement with the Bankruptcy Court, which provided for the above
discussed financial restructuring. On April 5, 2000, in response to objections
raised by the trustee for the noteholders, the United States Trustee, and
others, the Corporation, New Claridge, and the Partnership filed a revised plan
of reorganization and disclosure statement. The adequacy of the amended plan was
approved by the Bankruptcy Court on May 9, 2000, which allowed for the amended
plan to be submitted to the Corporation's creditors for a vote. On July 18,
2000, the Corporation announced the results of that vote; the holders of the
Corporation's Notes voted to reject the amended plan; management of the
Corporation believes that the unsecured creditors voted to accept the amended
plan. The Corporation had intended to pursue confirmation of the amended plan
under Section 1129B of the Bankruptcy Code, which allows for the Bankruptcy
Court judge to confirm the amended plan through the "cramdown" procedure, at the
confirmation hearing, which was scheduled to begin September 6, 2000.

        However, on August 11, 2000, the Bankruptcy Court judge granted
permission to the Official Secured Noteholders Committee (the "Committee") to
hire an investment banker to try to locate potential investors to submit
competing reorganization plans. The two primary offers which were considered by
the Corporation's Board of Directors (the "Board") were submitted by Park Place
Entertainment Corporation ("PPE")(owner and operator of Bally's Park Place,
Incorporated, the Atlantic City Hilton Casino Resort, and Caesars Atlantic City
casinos in Atlantic City) and GB Holdings, Incorporated ("GBHI") (owner and
operator of the Sands Hotel and Casino in Atlantic City). After evaluation by
the Board and its financial and legal advisors, the Corporation informed the
Bankruptcy Court judge that it intended to pursue the bid submitted by PPE. The
GBHI offer expired by its own terms on October 13, 2000.

        On November 28, 2000, the Corporation filed a second amended joint plan
of reorganization and a second amended disclosure statement, which included an
executed copy of the purchase and sale agreement between New Claridge, the
Partnership, and PPE. The second amended joint plan of reorganization provided
for a sale of substantially all of the assets of New Claridge and the
Partnership to PPE. Certain amendments were subsequently made to this plan, and
on March 27, 2001, the fourth amended joint plan of reorganization and fourth
amended disclosure statement (the "Plan") were approved by the Bankruptcy Court
to be submitted to the creditors for a vote. Pursuant to the terms of the Plan,
the secured noteholders would receive approximately an 83% recovery on their
claims of $90.5 million, and the unsecured creditors would receive approximately
61.5% of their claims.

        On May 11, 2001, the Corporation announced the results of the voting of
its creditors regarding the Plan. The holders of the Notes voted to accept the
Plan. The result of the vote from the unsecured creditors has not been

                                       14

<PAGE>

finalized; however, the Corporation believes that the unsecured creditors also
voted to accept the Plan. The Corporation intends to move forward to have the
Plan confirmed. The confirmation hearing is scheduled for May 16, 2001.

        The consolidated financial statements do not show (i) as to assets,
their realizable value on a liquidation basis or their availability to satisfy
liabilities; (ii) contingencies, or the status and priority thereof; or (iii) as
to stockholder accounts, the effect of any changes that may be made in the
Corporation's business. The eventual outcome of these matters is not presently
determinable.

        At March 31, 2001, the Corporation had working capital of $8,332,000 as
compared to working capital of $10,757,000 at December 31, 2000. The decrease in
working capital is principally attributable to an increase in accrued payroll
and related benefits of $528,000, combined with decreases in cash and cash
equivalents of $1,239,000 and accounts receivable of $965,000, partially offset
by a decrease in accounts payable of $299,000. At March 31, 2000, the
Corporation had working capital of $9,883,000.

        For the three months ended March 31, 2001, cash used in operating
activities was $1,181,000, compared to cash provided by operating activities of
$1,682,000 for the same period of 2000. The variance from the first quarter of
2000 was due primarily to a higher net loss, combined with an increase in the
payment of professional fees relating to the Chapter 11 proceeding ($876,000
paid during the first quarter of 2001, compared to no payments during the first
quarter of 2000), and a decrease in accounts payable of $299,000 during the
three months ended March 31, 2001, compared to an increase of $835,000 during
the same period of 2000. Cash used in investing activities for the three months
ended March 31, 2001 was $57,000, compared to $317,000 for the three months
ended March 31, 2000. Cash used in financing activities in 2001 and 2000 of
$1,000 and $47,000, respectively, represents payments of capital lease
obligations for certain gaming equipment.

        For the three months ended March 31, 2001, the Corporation's "Adjusted
EBITDA" was ($1,075,000), compared to $417,000 for the same period of 2000.
"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.

Relationship with the Partnership

        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 expired on September 30, 1998 and each lease provided for
three ten-year renewal options at the election of New Claridge. New Claridge
exercised the first of the ten-year renewal options, extending the term of the
Operating Lease and Expansion Operating Lease through September 30, 2008.

        Basic rent during the renewal term of each lease is calculated pursuant
to a defined formula, with such rent for the lease year commencing October 1,
1998 through September 30, 1999 not to be more than $29.5 million nor less than
$24 million for the Operating Lease, and not to be more than $3 million nor less
than $2.5 million for the Expansion Operating Lease. In addition, in each
subsequent lease year, rent will be calculated pursuant to a defined

                                       15

<PAGE>

formula, but may not exceed 10% more than the basic rent for the immediately
preceding lease year. Basic rent, as calculated pursuant to the defined formula
for the lease years commencing October 1, 1998, 1999 and 2000 was $24 million
for the Operating Lease and $2.5 million for the Expansion Operating Lease.

        New Claridge is also required to pay, as additional rent, certain
amounts including certain taxes, insurance, and other charges related to the
occupancy of the land and Hotel Assets, certain expenses and debt service
related to furniture, fixture and equipment replacements and building
improvements, and the general and administrative costs of the Partnership.

        The terms of the Operating Lease and Expansion Operating Lease have been
amended from time to time. The most recent amendment (the "Sixth Amendment"),
which was effective September 30, 1998, allowed for the deferral of $1.1 million
of rent in either February 1999 or March 1999, dependent upon certain conditions
being met. These conditions, which must have occurred prior to March 2, 1999,
included (i) New Claridge having received the proceeds in connection with its
settlement of the parking garage arbitration; and (ii) the Corporation or New
Claridge having paid the interest that was due on the Notes on February 1, 1999.
New Claridge received the proceeds from the settlement of the parking garage
litigation in February 1999, and paid the interest due on the Notes on March 2,
1999, within the 30-day grace period allowed in accordance with the terms of the
Indenture. The $1.1 million of basic rent deferred in 1999 is to be paid to the
Partnership in monthly installments of $25,000 commencing January 1, 2000 until
paid in full (subject to acceleration under certain circumstances). This
amendment also provides for additional abatements of rent, through December 31,
2004, as necessary to reduce the Partnership's cash flow to an amount necessary
only to meet the Partnership's cash requirements; these abatements, however, are
to be reduced by specified amounts for each period commencing January 1, 2000
and ending December 31, 2004 ($83,333 per month in 2000, $130,000 per month in
2001, $180,000 per month in 2002 and 2003, and $130,000 per month in 2004).

        In addition to the deferral and abatements of rent provided for in the
Sixth Amendment, the amendment provides for the payment of $3.5 million of
additional basic rent on the earlier of (i) the maturity date of the Expandable
Wraparound Mortgage Note; (ii) such earlier date, if any, as the entire
principal amount of the Expandable Wraparound Mortgage becomes due and payable;
or (iii) the date on which any merger, consolidation, or similar transaction to
which the Corporation or New Claridge is a party, or any sale of all or
substantially all of the assets of the Corporation or New Claridge is
consummated, or any change in control of the Corporation or New Claridge occurs.

        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. As a result of the
Corporation and New Claridge's Chapter 11 filing on August 16, 1999, under the
terms of the indenture governing the Notes (the "Indenture"), an "Event of
Default" has occurred (as defined in the Indenture). As a result of this Event
of Default, the Corporation and New Claridge are precluded from receiving any
further payments of principal or interest on the Expandable Wraparound Mortgage.
As a result, the Corporation and New Claridge have exercised this right of
offset against rental payments required to be made subsequent to August 16,
1999. Operating lease payments are being made monthly by New Claridge to an
escrow account for the benefit of the secured noteholders, which can only be
accessed with the approval of the Bankruptcy Court.

        Prior to August 16, 1999, New Claridge was 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 were 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

                                       16

<PAGE>

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 to pay, as
additional rent to the Partnership, the debt service on the FF&E Loans.

        As a result of the Corporation and New Claridge's Chapter 11 filing on
August 16, 1999, and the Partnership's Chapter 11 filing on October 5, 1999, the
Partnership no longer provides furniture, fixture, and equipment replacements to
the Claridge; rather, New Claridge has begun to provide such replacements.

        The Expandable Wraparound Mortgage required 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 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 Expandable Wraparound Mortgage has been amended from time to time.
In the most recent amendment, which was effective September 30, 1998, the
Corporation, New Claridge, and the Partnership agreed to amend the March 1997
restructuring agreement to provide for an extension of the maturity date of the
Expandable Wraparound Mortgage to January 1, 2005. In addition, the Expandable
Wraparound Mortgage Agreement and Note were amended to defer the principal
payments which were payable during the fourth quarter of 1998 (totaling $3.5
million) to the earlier of (i) the maturity date of the Expandable Wraparound
Mortgage Agreement and Note; (ii) such earlier date, if any, as the entire
principal amount of the Expandable Wraparound Mortgage becomes due and payable;
or (iii) the date on which any merger, consolidation or similar transaction to
which the Corporation or New Claridge is a party, or any sale of all or
substantially all of the assets of the Corporation or New Claridge is
consummated, or any change of control of the Corporation or New Claridge,
occurs.

        As a result of the Corporation's filing for reorganization under Chapter
11 on August 16, 1999, as well as the Partnership's Chapter 11 filing on October
5, 1999, the realizable value of the Expandable Wraparound Mortgage has become
impaired. Therefore, during the fourth quarter of 1999 the Corporation recorded
an adjustment to write-down the balance of the Expandable Wraparound Mortgage
receivable, to an amount estimated to be the realizable value of the Hotel
Assets. The total amount of this write-down was $37.6 million.


                                       17

<PAGE>

                                   SIGNATURES



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


The Claridge Hotel and Casino Corporation
            (Registrant)





By: /s/ Jean I. Abbott
    ----------------------------------------------------
       Jean I. Abbott
       Executive Vice President of Finance/
       Chief Financial Officer
       (Authorized Officer, Principal Financial Officer
       and Principal Accounting Officer)



Dated: May 14, 2001





                                       18

<PAGE>

                          Item 601(c) of Regulation S-K
                       Commercial and Industrial Companies
                           Article 5 of Regulation S-X

THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CLARIDGE
HOTEL AND CASINO CORPORATION'S FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2001
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

CIK                                                                  0000730409
Name                                      Claridge Hotel and Casino Corporation
Multiplier                                                                    1
Currency                                                                     US
Period Type                                                             Quarter
Fiscal Year End                                               December 31, 2001
Period start                                                   January 01, 2001
Period end                                                       March 31, 2001
Exchange rate                                                                 1
Cash and cash items                                                  18,227,000
Marketable securities                                                         0
Notes and accounts receivable-trade                                   8,156,000
Allowances for doubtful accounts                                        944,000
Inventory                                                               247,000
Total current assets                                                 29,504,000
Property, plant and equipment                                        44,423,000
Accumulated depreciation                                             13,551,000
Total assets                                                        104,906,000
Total current liabilities                                            21,172,000
Bonds, mortgages and similar debt                                             0
Preferred stock - mandatory redemption                                        0
Preferred stock - no mandatory redemption                                     0
Common stock                                                              5,000
Other stockholders' equity                                          (65,407,000)
Total liabilities and stockholders' equity                          104,906,000
Net sales of tangible products                                                0
Total revenues                                                       43,032,000
Cost of tangible goods sold                                                   0
Total costs and expenses applicable
  to sale and revenues                                               27,434,000
Other costs and expenses                                             18,037,000
Provision for doubtful accounts and notes                                61,000
Interest and amortization of debt discount                                    0
Income before taxes and other items                                  (2,500,000)
Income tax expense                                                            0
Income/loss from continuing operations                               (2,500,000)
Discontinued operations                                                       0
Extraordinary items                                                           0
Cumulative effect-change in accounting
  principles                                                                  0
Net income or loss                                                   (2,500,000)
Earnings per share - basic                                                 (.49)
Earnings per share - diluted                                               (.49)