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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                                  ANNUAL REPORT

    (Mark One)

         [ X ]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                                 For the fiscal year ended    December 31, 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 0-11268

                    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

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

Securities registered pursuant to Section 12(b) of the Act:

                                                          Name of each exchange
         Title of each class                               on which registered
         -------------------                              ---------------------
  First Mortgage Notes, due 2002                         New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

                         Class A Stock, $.001 par value
                                (Title of Class)


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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 _____

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

All issued and outstanding shares of the Corporation have been offered and sold
in reliance on exemptions from the registration requirements of the Securities
Act of 1933, as amended. Therefore, there is no established trading market for
any class of shares of the Corporation. The Corporation did, in 1989, jointly
with Atlantic City Boardwalk Associates, L.P. ("Partnership") and Del Webb
Corporation ("Webb"), register certain Contingent Payment Rights. As stated in
the Prospectus dated May 5, 1989, Contingent Payment Rights may or may not be
securities. None of the Corporation, the Partnership, or Webb has admitted that
the Contingent Payment Rights are securities or that any of them is the issuer
of any such securities.

Indicate the number of shares outstanding of each class of the Registrant's
Stock, as of the latest practicable date:

                          Number of Shares Outstanding
                                 March 28, 1997
                          -----------------------------

Class A Stock                     5,046,064 (After deducting 16,436 shares of
                                               Treasury Stock)


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                       DOCUMENTS INCORPORATED BY REFERENCE



                  DOCUMENT                                       FORM 10-K PART

Portions of the definitive Proxy Statement with                        III
respect to the Annual Meeting of Shareholders
scheduled to be held on June 10, 1997 (hereinafter
referred to as the "Proxy Statement"), but
specifically excluding the section entitled "Report
on Executive Compensation"  which shall not be
deemed to be incorporated by reference herein




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                                     PART I


Item 1.     BUSINESS

General

      The Claridge Hotel and Casino Corporation (the "Corporation"), through its
wholly-owned subsidiary, The Claridge at Park Place, Incorporated ("New
Claridge"), operates The Claridge Hotel and Casino ("Claridge") in Atlantic
City, New Jersey. The Corporation was formed as a New York corporation on August
26, 1983, and qualified to engage in business in New Jersey as a foreign
corporation in September 1983. New Claridge was formed as a New Jersey
corporation on August 29, 1983.

      The Corporation maintains its executive and administrative offices at
Indiana Avenue and the Boardwalk, Atlantic City, New Jersey 08401, telephone
number (609) 340-3400.

Corporate Structure

      On October 31, 1983, New Claridge acquired certain assets of the Claridge
including gaming equipment ("Casino Assets"), from Del E. Webb New Jersey, Inc.
("DEWNJ") a wholly-owned subsidiary of Del Webb Corporation ("Webb"); leased
certain other of the Claridge's assets, including the buildings, parking
facility and non-gaming, depreciable, tangible property of the Claridge ("Hotel
Assets"), from Atlantic City Boardwalk Associates, L.P., a New Jersey limited
partnership ("Partnership"); subleased the land on which the Claridge is located
from the Partnership; assumed certain liabilities related to the acquired
assets; and undertook to carry on the business of the Claridge. In connection
with these transactions, the Partnership granted the Expandable Wraparound
Mortgage (described below) to New Claridge. These transactions were entered into
in connection with the private placement of equity interests in the Corporation
and the Partnership. The offering was structured to furnish the investors with
certain tax benefits available under the federal tax law then in effect. The
common stock of the Corporation and the limited partnership interests of the
Partnership were sold together in the private placement as units, and because
there has been relatively little trading in the stock or Partnership interests,
there is a substantial similarity between the equity ownership of the
Corporation and the Partnership. Although the Corporation and the Partnership
are independent entities, approximately 95% of the Corporation's common stock is
owned by persons who also own limited partnership interests in the Partnership.
The Partnership does not currently engage in any significant business activities
other than those relating to the Claridge.

       In October 1988, the Corporation and New Claridge entered into an
agreement to restructure the financial obligations of the Corporation and New
Claridge (the "Restructuring Agreement"). The restructuring, which was
consummated in June 1989, resulted in (i) a reorganization of the ownership
interests in the Claridge; (ii) modifications of the rights and obligations of
certain lenders; (iii) satisfaction and termination of the obligations and
commitments of Webb and DEWNJ under the original structure; (iv) modifications
of the lease agreements between New Claridge and the Partnership; and (v) the
forgiveness by Webb of substantial indebtedness.

       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

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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.
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 arrangements. Interest on the
Notes is payable semiannually on February 1 and August 1 of each year.

      The net proceeds of the Notes, totalling $82.2 million net of fees and
expenses, were used as follows: (i) to repay in full on January 31, 1994, the
then outstanding debt of the Corporation 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; (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; (iii) to purchase property in 1995
and construct on that property a self-parking garage, which opened in mid-1996;
and (iv) to acquire the Contingent Payment Option (see Item 1. Business -
"Contingent Payment").

Recent Developments

      During 1994 and 1995, the cash provided by operations of the Claridge was
sufficient to meet the Corporation's obligations to pay interest on the Notes,
as well as to make at least some moderate capital improvements. Commencing in
the latter part of 1995, however, competition in the Atlantic City casino market
for bus customers, a principal source of customers for the Claridge at the time,
increased; this competition intensified even more during 1996 as additional
casino square footage was added, principally due to the opening of the Trump
World's Fair casino. During 1996, the average coin incentive issued per bus
patron at the Claridge increased to approximately $19, from approximately $13 in
1995. Total cash incentives issued to Claridge's casino patrons (in the form of
coin to play slot machines and gaming chips to play table games) increased to
approximately $30.5 million in 1996, from approximately $25.2 million in 1995.
While the Corporation's promotional costs increased significantly, total casino
revenues in 1996 actually decreased from 1995 levels. It had been the
expectation of the Corporation that, upon the opening of its new self-parking
garage, the Corporation would be able to reduce its reliance on the bus patron
market; however, the Corporation was forced to close the garage facility on July
10, 1996, only ten days after its opening, following a fatal accident. Because
the facility was not able to reopen until the end of September 1996, the
Corporation lost any possible benefit of the facility during the normally busy
summer season. In addition, severe winter weather in the first quarter of 1996
adversely affected revenues. As a result, the Corporation experienced a net loss
for 1996 of $15.4 million, compared to a net loss of $1.9 million in 1995. (See
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.)

      In late July 1996, management of the Corporation determined that due to
the serious deterioration in the Corporation's cash flow, that without a
significant improvement in its operating results, it was unlikely that the
Corporation would be able to meet its obligations to pay interest on the Notes
beyond the August 1996 payment. In addition to taking steps to conserve cash by
reducing various operating expenses, the Corporation engaged a financial
advisor, Dillon, Read & Co., Inc., to assist in formulating a proposal to the
holders of the Notes to restructure the Corporation's obligations under the
Notes. At the same time, the Corporation was working with Dillon, Read & Co.,
Inc. to attempt to find a buyer of the Corporation or an investor that would be
in a position to inject additional capital into the Corporation to enable the
Corporation to meet its ongoing obligations. To date, the Corporation has not
received any acceptable proposals in regards to the possible sale of the
Corporation.


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      In November 1996, while the sales efforts were continuing, the Corporation
announced that there was a strong likelihood that the Corporation would be
unable to pay the interest due on the Notes on February 3, 1997. Accordingly,
management, working together with financial and legal advisors, formulated a
plan for restructuring the Corporation's obligations. The terms of the proposed
plan were presented to the noteholders at a meeting held on December 3, 1996, at
which time the noteholders were urged to form a steering committee or other
representative body to conduct negotiations. Although a group of noteholders
formed and met with the management of the Corporation on a few occasions, by the
time the committee formally organized itself on January 7, 1997, it consisted of
six members representing ownership of less than 5% of the total amount of Notes
outstanding. At that time, the Corporation determined that the committee did not
represent a sufficient portion of the noteholders to negotiate on behalf of the
noteholders generally. As a result, the Corporation did not formally recognize
the committee and did not engage in any negotiation with the committee or its
members, although it did encourage the members of the committee to continue to
attempt to obtain broader representation of the noteholders.

      On January 12, 1997, management of the Corporation was contacted, through
an agent, by Hilton Hotel Corporation ("Hilton"), regarding a possible sale of
the Corporation to Hilton, and shortly thereafter, the Corporation began
negotiations with Hilton. On January 30, 1997, the Corporation issued a press
release indicating that the Corporation would not make the interest payment due
on the Notes on February 3, 1997, and that the Corporation had entered
negotiations with Hilton regarding acquisition of the Corporation by Hilton
through a prepackaged bankruptcy plan. At that time, a representative of Hilton
indicated that Hilton had acquired approximately 35% to 40% of the Notes. On
February 5, 1997, three holders of the Notes, who were members of the unofficial
committee which they had formed, filed a petition for involuntary bankruptcy
against the Corporation in the bankruptcy court for the District of New Jersey.

      Contemporaneously, the same three holders of the Notes filed a related
state court lawsuit against the Corporation, New Claridge, the Partnership,
certain officers and directors of the Corporation, and the general partners of
the Partnership. On March 4, 1997, contrary to earlier expectations, the
Corporation was able to pay the interest that was due on the Notes on February
3, 1997, under the 30-day grace period allowed in accordance with the terms of
the indenture governing the Notes (the "Indenture"). In addition, the
Corporation reached agreement with the unofficial committee of noteholders, as
well as the three holders of the Notes, providing for the joint dismissal of the
involuntary bankruptcy petition and the related state court lawsuit. On March
19, 1997, an order was entered dismissing the involuntary bankruptcy petition;
as part of that order, a settlement agreement was entered whereby the state
court lawsuit was also dismissed. The Corporation expects the negotiations with
Hilton to continue.

      The Corporation had sufficient cash to pay the interest on the Notes on
March 4, 1997 due to several events: (i) cash flow from operations for January
and February 1997 improved significantly over what had been expected; (ii)
effective March 1, 1997, the Operating Lease and Expansion Operating Lease
(defined below) were amended to provide for the deferral of basic rent of $1.3
million on March 1, 1997 (see Item 1. Business - "Certain Agreements between the
Corporation, New Claridge and the Partnership"); and (iii) 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 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.



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Certain Agreements between the Corporation, New Claridge and the Partnership

      The current relationships and agreements between the Corporation, New
Claridge and the Partnership are described below:

      Operating Lease/Expansion Operating Lease. The Casino Assets are owned by
      New Claridge. In addition, the new self-parking garage and the land on
      which it is located are owned by New Claridge. The Hotel Assets and
      underlying land are owned by the Partnership and leased by the Partnership
      to New Claridge. The lease obligations are set forth in a lease (the
      "Operating Lease"), originally entered into on October 31, 1983, and an
      expansion operating lease (the "Expansion Operating Lease"), covering
      additions to the Claridge made in 1986.

      The Operating Lease has an initial term of 15 years with three 10-year
      renewal options. Basic annual rent payable during the initial term of the
      Operating Lease in equal monthly installments was $38,055,000 in 1994,
      $39,030,000 in 1995, $39,906,000 in 1996, and will be $41,775,000 in 1997
      and $32,531,000 for the nine month period ending September 30, 1998. Basic
      rent during the renewal term will be calculated pursuant to a formula,
      with such rent not to be more than $29,500,000 nor less than $24,000,000
      for the lease year commencing October 1, 1998 through September 30, 1999,
      and, subsequently, not to be greater than 10% more than the basic rent for
      the immediately preceding lease year in each lease year thereafter.

      New Claridge is also required to pay as additional rent amounts including
      certain taxes, insurance and other charges relating to the occupancy of
      the land and Hotel Assets, certain expenses and debt service relating to
      furniture, fixture and equipment replacements and building improvements
      (collectively, "FF&E Replacements") and the general and administrative
      costs of the Partnership. The Partnership is required during the entire
      term of the Operating Lease, and any subsequent renewal terms, to provide
      FF&E Replacements to New Claridge and to provide facility maintenance and
      engineering services to New Claridge. New Claridge is required to lend the
      Partnership any amounts ("FF&E Loans") necessary to fund the cost of FF&E
      Replacements, and if the Partnership's cash flow, after allowance for
      certain distributions, is insufficient to provide the facility maintenance
      and engineering services required of it, New Claridge is also required to
      lend the Partnership the funds required to provide those services. Any
      advances by New Claridge for either of the foregoing will be secured under
      the Expandable Wraparound Mortgage in an amount up to $25,000,000.
      Thereafter, such advances shall be secured under separate security
      agreements.

      On March 17, 1986, New Claridge entered into the Expansion Operating Lease
      Agreement with the Partnership under which New Claridge leased certain
      improvements (the "Expansion Improvements") made to the Claridge in 1986,
      for an initial term beginning March 17, 1986 and ending on September 30,
      1998 with three 10-year renewal options. Basic annual rent payable during
      the initial term of the Expansion Operating Lease was $3,870,000 in 1986
      (prorated based on the day that the Expansion Improvements opened to the
      public) and determined based on the cost of the construction of the
      Expansion Improvements. Annually thereafter the rental amount will be
      adjusted based on the Consumer Price Index with any increase not to exceed
      two percent per annum. Basic annual rent for 1996 was $4,718,000. Basic
      rent during the renewal term will be calculated pursuant to a formula,
      with annual basic rent not to be more than $3 million nor less than $2.5
      million and, subsequently, not to be greater than 10% more than the basic
      annual rent for the immediately preceding lease year in each lease year
      thereafter.

      New Claridge is also required under the Expansion Operating Lease to pay
      as additional rent amounts

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      equal to certain expenses and the debt service relating to furniture,
      fixture and equipment replacements and building improvements (collectively
      "Expansion FF&E Replacements") for the Expansion Improvements. The
      Partnership will be required during the entire term of the Expansion
      Operating Lease, and any subsequent renewal terms, to provide New Claridge
      with Expansion FF&E Replacements and to provide facility maintenance and
      engineering services to New Claridge. New Claridge will be obligated to
      lend the Partnership any amounts necessary to fund the cost of Expansion
      FF&E Replacements. Any advances by New Claridge for the foregoing will be
      secured under the Expandable Wraparound Mortgage in an amount up to
      $25,000,000. Thereafter, such advances shall be secured under separate
      security agreements.

      Effective with the consummation of the restructuring in June 1989, the
      Operating Lease and the Expansion Operating Lease were amended to provide
      for the deferral of up to $15.1 million of rental payments during the
      period July 1, 1988 through the beginning of 1992, and to provide for the
      abatement of $38.8 million of basic rent through 1998, thereby reducing
      the Partnership's cash flow to an amount estimated to be necessary only to
      meet the Partnership's cash requirements. During the third quarter of
      1991, the maximum deferral of rent was reached. On August 1, 1991, the
      Operating Lease and Expansion Operating Lease were amended further to
      revise the abatement provisions so that, commencing January 1, 1991, for
      each calendar year through 1998, the lease abatements may not exceed $10
      million in any one calendar year, and $38,820,000 in the aggregate.
      Additional abatements of rent totalling $500,000 became available as a
      result of the acquisition of the option to purchase the Contingent
      Payment. All available rent abatements were fully utilized in the first
      quarter of 1997. Further abatements would become available in the event
      that the Contingent Payment option is exercised. (See Item 1. Business -
      "Contingent Payment").

      The Fifth Amendment to the Operating Lease and the Fourth Amendment to the
      Expansion Operating Lease, which were effective on March 1, 1997, provided
      for the abatement of $867,953 of basic rent and for the deferral of
      $1,300,000 of basic rent on March 1, 1997, and provide for additional
      abatements of basic rent, commencing on April 1, 1997, as necessary to
      reduce the Partnership's cash flow to an amount necessary only to meet the
      Partnership's cash requirements through December 31, 1998. The $1.3
      million of basic rent deferred on March 1, 1997 is to be paid to the
      Partnership in monthly installments of $25,000 for the period April 1,
      1997 through December 31, 1997, and monthly installments of $50,000 for
      the year 1998 and thereafter until paid in full. For the years 1999
      through 2003, additional abatements of basic rent will be reduced to
      provide the Partnership with amounts needed to meet the Partnership's cash
      requirements plus an additional amount ($83,333 per month in 1999 and
      2000, $125,000 per month in 2001, and $166,667 per month in 2002 and
      2003).

      In conjunction with the Fifth Amendment to the Operating Lease and the
      Fourth Amendment to the Expansion Operating Lease, as discussed above, the
      Corporation, New Claridge and the Partnership entered into a restructuring
      agreement, effective March 1, 1997, to modify certain terms of the
      Expandable Wraparound Mortgage (see below). In addition, under the March
      1, 1997 restructuring agreement, New Claridge agreed to exercise the first
      of three ten-year renewal options extending the term of the Operating
      Lease and Expansion Operating Lease through September 30, 2008.

      Under the terms of the Operating Lease, as amended effective March 1,
      1997, New Claridge has an option to purchase, on September 30, 1998, the
      Hotel Assets and the underlying land for their fair market value at the
      time the option is exercised, which in no event may be less than an amount
      equal to the amount then outstanding under the Expandable Wraparound
      Mortgage (see below) plus $2.5 million, plus any amount of the $1.3
      million of rent deferred on March 1, 1997 not then paid. If New Claridge
      does not exercise this option on September 30, 1998, it may exercise an
      option, on September

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      30, 2003, to purchase the Hotel Assets and the underlying land on January
      1, 2004, for their fair market value at the time the option is exercised.

      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.

      Expandable Wraparound Mortgage. On October 31, 1983, the Partnership
      executed and delivered to New Claridge the Expandable Wraparound Mortgage,
      which was subordinate to an $80 million first mortgage granted by the
      Partnership to a group of banks, and a $47 million purchase money second
      mortgage ("Purchase Money Second Mortgage"), granted by the Partnership to
      DEWNJ. The Purchase Money Second Mortgage, which was due on September 30,
      2000, was cancelled upon satisfaction of certain conditions set forth in
      an agreement entered into at the time of the 1989 restructuring. In
      conjunction with the offering of $85 million of Notes on January 31, 1994,
      the outstanding debt under the Loan Agreement, which included a first
      mortgage and the revolving credit line, was satisfied in full. By its
      terms, the Expandable Wraparound Mortgage may secure up to $25 million of
      additional loans to the Partnership from New Claridge to finance FF&E
      Replacements and facility maintenance and engineering shortfalls. The
      Expandable Wraparound Mortgage provides that, so long as the Partnership
      is not in default on its obligations under the Expandable Wraparound
      Mortgage, New Claridge is obligated to make payments required under any
      senior mortgage indebtedness. The indebtedness secured by the Expandable
      Wraparound Mortgage bears interest at an annual rate equal to 14%, with
      certain interest installments that accrued in 1983 through 1988 totalling
      $20 million being deferred until maturity. In addition, the Partnership is
      required under the Expandable Wraparound Mortgage to make payments of
      principal and interest in respect of any FF&E Loans made to finance FF&E
      Replacements or facility maintenance or engineering costs as described
      above. To the extent these FF&E Loans exceed $25 million in the aggregate
      outstanding at any time, they will be secured under separate security
      agreements and not by the lien of the Expandable Wraparound Mortgage.

      On March 17, 1986, the first mortgage was amended and assumed by New
      Claridge. The amount of the amended and assumed first mortgage was
      increased to secure up to $96.5 million to provide financing for the
      Expansion Improvements. Indebtedness secured by the Expandable Wraparound
      Mortgage was increased by an amount up to $17 million to provide the
      Partnership with the necessary funding.

      Effective August 28, 1986, the Partnership commenced making level monthly
      payments of principal and interest so as to repay on September 30, 1998,
      in full, the principal balance of this $17 million increase in the
      Expandable Wraparound Mortgage. On March 17, 1986, the Expandable
      Wraparound Mortgage was amended to require that the $127 million aggregate
      principal amount secured by it would be repayable in installments during
      the years 1988 through 1998 in escalating amounts totalling $80 million,
      with a balloon payment of $47 million and the $20 million of deferred
      interest due on September 30, 2000.

      Effective March 1, 1997, the Corporation, New Claridge, and the
      Partnership entered into a restructuring agreement, pursuant to which New
      Claridge agreed to use its best efforts to cause a modification of the
      Expandable Wraparound Mortgage (the "Wraparound Modification") that is
      permitted by, or is in compliance with, the terms of the Indenture. The
      Wraparound Modification, if so permitted, will provide for an extension of
      the maturity date of the Expandable Wraparound Mortgage from September 30,
      2000 to January 1, 2004. If the Wraparound Modification is not

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      permitted by or in compliance with the terms of the Indenture, New
      Claridge has agreed to effect the Wraparound Modification at such time as
      the Notes are no longer outstanding.

      In connection with the offering 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 certain 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.

Contingent Payment

      Following the 1983 transactions, Webb and its affiliates retained
significant interests in the Claridge. Effective with the closing of the
restructuring in June 1989, all or substantially all of the financial,
contractual, ownership, guarantee and other relationships of the Corporation and
New Claridge with Webb were terminated. The Restructuring Agreement provided
that Webb would retain an interest equal to $20 million plus interest from
December 1, 1988 at the rate of 15% per annum compounded quarterly (the
"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
their shareholders or partners, respectively, whether derived from operations or
from sale or refinancing proceeds, until Webb had received the Contingent
Payment.

      In connection with the 1989 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 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 New Jersey Casino Control Commission (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
Investors exceed $20 million. It is estimated that at December 31, 1996, the
aggregate amount payable in respect of the Contingent Payment was $65.8 million.

      Given the recent operating results (see Item 1. Business - "Recent
Developments"), it is unlikely that the Corporation would be able to exercise
this Contingent Payment option using available working capital, or absent a
refinancing or sale transaction.

      In the event that the option is exercised, it is anticipated that the
Contingent Payment would be cancelled so that neither the Corporation or the
Partnership would have any obligation to make any payment

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in respect of the Contingent Payment before making a distribution to
shareholders or limited partners. Upon the purchase and cancellation, however,
the Corporation and the Partnership would remain obligated to make payments to
the Releasing Investors, in respect of the Contingent Payment Rights, before any
distribution may be made to shareholders or limited partners. These payments
would be required to be in the same amounts as if the Contingent Payment had not
been purchased and cancelled. As a result, it is not likely that shareholders or
limited partners who are not Releasing Investors will receive any distribution
from the Corporation or the Partnership. In the aggregate, Releasing Investors
are entitled to receive up to an amount equal to approximately 72% of the
Contingent Payment if the option is exercised.

      Under the terms of the option, upon purchase of the Contingent Payment,
the Corporation and/or the Partnership would be required to make distributions
in excess of $7 million to the Releasing Investors. The Corporation and the
Partnership 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 would be
contributed through additional abatements of basic rent payments due under the
Operating Lease and Expansion Operating Lease.

The Claridge

      The Claridge, located in the Boardwalk casino section of Atlantic City,
New Jersey, is a 26-story building that contains the Corporation's casino and
hotel facilities. Built in 1929 as a hotel, the Claridge was remodeled at a cost
of approximately $138 million prior to its reopening as a casino hotel in 1981.
The Expansion Improvements, which were completed in 1986 at a cost of
approximately $20 million, provided approximately 10,000 additional square feet
of casino space, together with a 3,600 square foot lounge. In 1994,
approximately $12.7 million was expended to expand the Claridge's casino square
footage by approximately 12,000 feet. In 1996, New Claridge constructed a
self-parking garage facility connected to its existing valet-parking garage, at
a cost of approximately $28 million. The combined garage facility provides
parking for approximately 1,200 vehicles.

      The Claridge's casino consists of approximately 59,000 square feet of
casino space on three main levels with various adjacent mezzanine levels. The
casino currently contains approximately 1,750 slot machines and sixty-five table
games, including forty-one blackjack tables, ten craps tables, five roulette
tables, three Caribbean stud poker tables, one mini-baccarat table, and five
other specialty games. The hotel with related amenities consists of 502 guest
rooms (including 28 corner suites, 26 specialty suites and five tower penthouse
suites), four restaurants, a buffet area, three lounges, a private players club,
a 600-seat theater, limited meeting rooms, a gift shop, a beauty salon, and a
health club with an indoor swimming pool.

      New Claridge experiences a seasonal fluctuation in demand, which is
typical of casino-hotel operations in Atlantic City. Historically, peak demand
has occurred during the summer season. New Claridge's principal market is the
Mid-Atlantic area of the United States. The casino gaming business in Atlantic
City is highly competitive and is strictly regulated under the New Jersey Casino
Control Act (the "Act") and regulations thereunder which affect virtually all
aspects of casino operations. (See Item 1. Business - "Competition" and "Gaming
Regulation and Licensing").

Competition

      Competition in the Atlantic City casino-hotel market is intense. As of
December 31, 1996, the twelve existing casino facilities offered approximately
1,080,000 square feet of gaming space, a 12.5% increase over the casino square
footage as of December 31, 1995 of approximately 960,000 square feet. In May

                                        8

<PAGE>



1996, the 49,000 square foot Trump World's Fair casino opened, and minor casino
expansions occurred at several other properties in 1996. For the years ended
December 31, 1996 and 1995, citywide gaming revenues, as reported, increased
1.8% and 9.5%, respectively, over prior year levels.

      The Atlantic City gaming market is expected to experience significant
growth over the next several years as Atlantic City transforms itself from a
"day-trip" market to a "destination resort." As a result of current high room
occupancy rates, a more favorable regulatory climate, the reduced threat of
competition from potential new gaming jurisdictions, and significant
infrastructure developments making Atlantic City more accessible, over $4.6
billion of new investment has been announced or recently completed in the
Atlantic City gaming market. As currently scheduled, the planned expansion of
existing casinos alone will increase total Atlantic City casino space by over
34%, and hotel rooms by almost 145%. In addition, several Las Vegas casino
operators have recently announced plans to construct new casinos in Atlantic
City.

      In addition to the major casino expansions and the announced new casinos,
major infrastructure improvements have begun. A new $268 million convention
center, scheduled for completion in May 1997, is expected to contain
approximately 500,000 square feet of exhibition space, 45 meeting rooms, food
service facilities, and a 1,600-car underground parking garage. The new
convention center will be the largest exhibition space between Boston and
Atlanta. A 500-room non-casino hotel is currently being constructed, and is
expected to be completed in the fall of 1997; it will be linked to the new
convention center by an elevated walkway. The development of a corridor which
will link the convention center to the boardwalk area is currently underway, and
will feature a wide, landscaped boulevard with a reflecting pool, an expanded
park area, and a 60-foot lighthouse which will be illuminated each night by a
spectacular light show. In February 1997, construction of a new $7.5 million bus
terminal, which is a major component of this corridor, was completed. The State
of New Jersey is also implementing a capital plan of approximately $125 million
to upgrade and expand the Atlantic City International Airport.

      All casinos in Atlantic City are part of hotels which offer dining,
entertainment, and other guest facilities. As the size of the gaming facilities
continue to grow, the need for additional hotel rooms has become evident. During
1996, the number of hotel rooms available citywide increased with the opening of
the Trump World's Fair casino (approximately 500 rooms) and the Tropicana's new
600-room hotel tower. Several existing Atlantic City casinos have plans to
increase their hotel space in 1997 and 1998, including Harrah's, Trump Taj
Mahal, Hilton, and Caesars, for a total expected increase of approximately 2,100
hotel rooms. In addition, a 500-room non-casino hotel is expected to be
constructed adjacent to the new convention center, which is scheduled to open in
1997. Competition among the existing casino-hotels is based on factors such as
promotional allowances and incentives; the attractiveness of the casino area;
advertising; customer service; the availability, quality, and price of rooms,
food, and beverage; ease and availability of parking and accessing the facility;
and entertainment.

       The Atlantic City business is seasonal, with the highest level of
activity occurring during the summer months, and the lowest level of activity
during the winter months. The primary markets for Atlantic City casino patrons
are Philadelphia, New Jersey and New York City, together with the secondary
markets of central Pennsylvania, Delaware, Baltimore and Washington, D.C.
Casinos offer incentives, in the form of cash and complimentaries for rooms,
food and beverages, to their customers based on their casino play. In recent
years, competition for, and as a result, incentives offered to, customers has
increased significantly. Many Atlantic City casino patrons arrive by bus and
stay for approximately six hours. Competitive factors in Atlantic City require
the payment of cash incentives and coupons for use towards the price of meals to
patrons arriving under bus programs sponsored by the casino operators.
Competition for bus patrons intensified in 1996. During 1996, 9.8 million casino
patrons arrived in Atlantic City by bus, an 11% increase over 1995 levels. The
increased competition took the form of higher coin incentives, which New
Claridge

                                        9

<PAGE>



matched, thus increasing its per patron average coin cost to approximately $19
in 1996 from approximately $13 in 1995. New Claridge has relied heavily on
attracting patrons who travel to Atlantic City by bus because the Claridge
previously lacked a self-parking facility, and has therefore had to remain
competitive with other casino operators in regards to the incentives offered.
Even with the 1,200-space parking facility, New Claridge will continue to rely
on its bus customers as a significant source of business.

      The Claridge has positioned itself as the "smaller, friendlier"
alternative to the other Atlantic City casinos. This strategy, implemented in
1989, is designed to capitalize on the Claridge's unique physical facility,
which the Corporation believes retains the atmosphere of a grand hotel, and on
the Claridge's smaller, more intimate size relative to the larger Atlantic City
casinos. By emphasizing an environment that is intimate, friendly and
service-oriented, the Claridge targets a market niche different than that of a
majority of its competitors. The Claridge seeks to attract and retain a customer
base whose wagering spans the same market segments serviced by other casino
hotels, but primarily targets the middle, leaving the high-end business to its
competitors. New Claridge believes it is uneconomical to pursue the high-end
market as its core business because of the high maintenance cost and potential
volatility in table games "hold" percentages (the ratio of win to the amount of
gaming chips purchased by patrons). The typical Claridge patron has a lesser
need for credit as well as a lower average complimentary cost. The majority of
the Claridge's casino revenue is generated by slot machine play, the fastest
growing segment of gaming play. In 1995, 77% of the Claridge's casino revenue
came from slot play as compared to 68% reported for all Atlantic City
properties. The trend has continued in 1996 with 75% of the Claridge's casino
revenue generated from slot play, compared to 69% for all Atlantic City casinos.

      The key elements of New Claridge's marketing plan include the use of
complimentaries, promotional activities, entertainment events, player
development hosts, a bus program, and the use of commissioned agents to attract
groups from outside the company's traditional market areas ("junket/splinter
program"). New Claridge also operates a direct marketing program to attract and
retain customers. New Claridge's Compcard Gold program, which allows patrons to
earn various complimentaries, including coins for slot machine play and gaming
chips for table play, based on their levels of gaming activity, provides a
valuable database of information on playing preferences, frequency and
denominations of play, and the amount of gaming revenues produced by gaming
patrons. Because of the expanded facilities and amenities now offered at the
Claridge, the "Because Smaller is Friendlier" positioning statement was changed
to "Smaller, Friendlier and So Much More." This position retains the equity in
the intimacy-seeking patron, but extends it to communicate that the Claridge now
has a facility capable of comfortably servicing a larger customer base, and
offering the same amenities and entertainment found at larger Atlantic City
casino hotels.

      Competition in Atlantic City also extends to the employment market. The
Commission has promulgated regulations which require staffing levels at Atlantic
City casinos which are higher than those for casino-hotels in Nevada. In
addition, although the January 1995 amendments to the Act (see Item 1. Business
- "Gaming Regulation and Licensing") have eased the licensing requirements for
some employees, all of New Claridge's casino employees must be licensed. Partly
as a result of the licensing requirements, there has been intense competition
for experienced casino employees in Atlantic City. Difficulties in hiring
personnel licensed by the Commission have elevated labor costs, and licensed
personnel frequently leave their current positions for higher paying jobs in
other casinos. In addition, the expansion of casino gaming into other
jurisdictions has increased the competition for experienced casino management
personnel.

      Beginning in the fall of 1988, three events occurred that accelerated the
presence of casino gaming in the United States: (i) a statewide ballot issue in
South Dakota approved limited-stakes gaming in Deadwood; (ii) the state
legislature approved river boat gaming in Iowa in early 1989; and (iii) Congress
passed the Indian Gaming Regulatory Act of 1988, which permits unrestricted
gaming on Indian land in any

                                       10

<PAGE>



state that already allows similar gaming (for example, if the state allows
charitable gaming for non-profit organizations, then federally-recognized Indian
tribes can run similar operations on their land). Since these events occurred,
the gaming industry rapidly expanded; during 1995 and 1996, however, the
expansion of gaming slowed considerably. In 1996, although voters in Michigan
approved casino gaming for the city of Detroit, gambling measures were defeated
in several other states. In January 1997, the New York State Senate voted to
deny a statewide referendum to legalize casino gaming in that state. Legislation
to put the issue before Pennsylvania voters has been introduced several times in
the past few years, but none has so far succeeded. The current Pennsylvania
Governor, Tom Ridge, has indicated that he will require a statewide vote on
gaming, as well as local referendum; the requirement for a statewide vote would
make the legalization of casino gaming in Pennsylvania a more difficult and
expensive possibility than previously anticipated. Management believes that,
should casino gaming be legalized in the future in Philadelphia, the effects on
Atlantic City casinos and on the Claridge would depend upon the form and scope
of such gaming. In 1995, two racetracks in Delaware began offering slot machines
at their facilities, with a third racetrack opening a slot machine facility in
August 1996; total combined revenues for these three facilities in 1996 was
reported to be $184.4 million.

      Indian gaming is currently authorized in many states including New York,
Michigan, Minnesota, California, and most notably, Connecticut. In February
1992, the Foxwoods High Stakes Casino and Bingo Hall ("Foxwoods"), operated by
the Mashantucket Pequot Indian tribe in Ledyard, Connecticut commenced
operations, offering the table games found in Atlantic City as well as bingo
rooms. In January 1993, approval was granted by the Connecticut government for
Foxwoods to offer slot machines; as of December 31, 1996, approximately 4,600
slot machines and approximately 300 table games were reported to be operational
at Foxwoods. In October 1996, the Mohegan Sun Resort opened in Uncasville,
Connecticut, near the Foxwoods operation. This facility, owned by the Mohegan
Indians, has 150,000 square feet of gaming space, with over 2,600 slot machines
and 180 table games operational as of December 31, 1996.

      The continued expansion of casino gaming, lotteries, including video
lottery terminals (VLTs), and offtrack betting in other nearby states could also
have a negative effect on the Atlantic City market.

Gaming Regulation and Licensing

      a. The New Jersey Casino Control Commission and Division of Gaming
Enforcement. The ownership and operation of casino-hotel facilities in Atlantic
City are subject to extensive state regulation under the Act. No casino-hotel
may operate in Atlantic City unless necessary corporate and individual officer,
director and employee licenses are obtained from the Commission. The Commission
is authorized under the Act to adopt regulations covering a broad spectrum of
gaming-related activities.

      The Act also establishes a Division of Gaming Enforcement (the "Division")
to investigate all applications for licenses, enforce the provisions of the Act
and the regulations thereunder, and prosecute before the Commission all
proceedings for violations of the Act or any regulations thereunder. The
Division conducts audits and continually reviews casino operations, maintains
information with respect to any changes in ownership of the casino-hotel and
conducts investigations of casino owners and investors when appropriate.

      Since 1991, changes to the Act have been enacted which have reduced
regulation of the casino industry; such changes have included the implementation
of 24-hour gaming, the introduction of new types of games, and the introduction
of simulcast wagering. In January 1995, significant amendments to the Act were
signed into law, which were intended to further reduce the regulation of the
Atlantic City casino industry. These amendments included changes regarding (i)
the authority and responsibilities of the

                                       11

<PAGE>



Commission and the Division; (ii) the licensing requirements of employees,
casinos, and employees of industries which service the casinos; (iii) the
operation of the casinos; and (iv) the operation of the Casino Reinvestment
Development Authority (the "CRDA").

      b. Licensing Requirements. The Act provides that various categories of
persons or entities must hold casino licenses. The Act also provides that each
officer, director and person who directly or indirectly holds any beneficial
interest or ownership in a casino licensee; or any person who, in the opinion of
the Commission, has the ability to control a casino licensee or elect a majority
of the board of directors; or each principal employee or any other employee of a
casino licensee (and any lender to or underwriter, agent or employee of the
licensee) whom the Commission may consider appropriate for approval or
qualification, be qualified for approval pursuant to the provisions of the Act.
In addition, all contracts and leases entered into by the licensee may, upon
request of the Commission, have to be submitted to the Commission, are subject
to its review, and, if found unacceptable, are voidable. All enterprises which
provide gaming-related services to the licensee must be licensed. All other
enterprises dealing with the licensee must register with the Commission, which
may require that they be licensed if they do $75,000 or more per year in
business with a single licensee, and $225,000 or more per year if with more than
one licensee.

      New Claridge holds a casino license because it carries on the casino
business of the Claridge and owns the Casino Assets. As a result, New Claridge's
officers and directors are subject to Commission qualification. The Corporation,
as the sole owner of the stock of New Claridge, is also required to be
qualified. As a part of its determination of the Corporation's qualification,
the Commission will require the qualification of each officer, each director,
and each person who directly or indirectly holds any beneficial interest or
ownership in the Corporation, and who the Commission requires to be qualified,
or any person who, in the opinion of the Commission, has the ability to control
the Corporation or elect a majority of its Board of Directors; or each principal
employee or any other employee whom the Commission may consider appropriate for
approval or qualification. The Commission has determined that no stockholder of
the Corporation owning less than 5% of its stock will be required to be
qualified unless the Commission determines that such stockholder has the ability
to control the Corporation or elect a majority of its Board of Directors. Prior
to June 16, 1989, Webb was the only stockholder in this category. The names and
addresses of all stockholders have been supplied to the Commission and any
changes known to the Corporation are reported when they occur.

      c. Licensing Status. The Commission issues casino licenses, which, as
amended January 1995, are renewable every four years, subject to a series of
requirements including a requirement of demonstrating financial viability. On
September 22, 1995, New Claridge was issued a four-year casino license by the
Commission for the period commencing September 30, 1995.

      d. Investigations and Disqualifications. The Commission may find any
holder of any amount of securities of the Corporation not qualified to own
securities of the Corporation. Further, as required by New Jersey, the charter
and the by-laws of the Corporation and New Claridge provide that securities of
the Corporation and New Claridge are held subject to the condition that if a
holder is found to be disqualified by the Commission the holder must dispose of
the securities of the Corporation or New Claridge, as the case may be. The
Corporation will periodically report the names and addresses of owners of record
of Class A Stock to the Commission as is required for all publicly traded
holding companies that have wholly-owned subsidiaries holding casino licenses.

      e. Casino Fees and Taxes. The Act provides for a casino license issue fee
of not less than $200,000, based upon the cost of the investigation and
consideration of the license application, and renewal fee of not less than
$200,000, as amended in January 1995, based upon the cost of maintaining control
and

                                       12

<PAGE>



regulatory activities. In addition, a licensee is subject to (i) a tax of eight
percent (8%) of gaming revenues, less the provision for uncollectible accounts,
(ii) an annual license fee of $500 on each slot machine, and (iii) an alcoholic
beverage fee computed on the basis of the cost of investigatory time spent
monitoring each beverage outlet.

      The Act as amended in December 1984 further provides for the imposition of
an investment obligation pursuant to criteria set forth in the Act, or the
payment of an alternative tax. The investment obligation is 1.25% of the total
gaming revenues (which are defined as the total revenues derived from gaming
operations less the provision for uncollectible accounts) for each calendar
year. If the casino licensee opts not to make an investment, it is assessed an
alternative tax of 2.5% of total gaming revenues less the provision for
uncollectible accounts. The licensee has two options in satisfying its
investment obligation; it can make a direct investment in a project approved by
the CRDA, which is the agency responsible for administering this portion of the
Act, or it can buy bonds issued by the CRDA which will, if tax exempt, bear
interest at the rate of 66 and 2/3% of the average rate of the Bond Buyer Weekly
25 Revenue Bond Index for the 26 weeks preceding the issue of the bonds. If the
bonds are not tax exempt they will bear interest at the rate of 66 and 2/3% of
the average rate of Moody's A Rated Utility Index for the 26 weeks preceding the
issue of the CRDA bonds. The investment obligation must be paid on the fifteenth
day of the first, fourth, seventh, and tenth months of each year based on the
estimated gaming revenues for the three month period immediately preceding the
first day of those months. The alternative tax must be paid not later than April
30 of the following year.

      New laws and regulations as well as amendments to existing laws and
regulations relating to gaming activities in Atlantic City are adopted from time
to time. Effective July 1, 1993, the New Jersey state legislature passed a law
requiring the payment of parking fees by casinos in New Jersey in the amount of
$2.00 per day for each motor vehicle parked in a casino parking space. In 1992
the New Jersey state legislature passed a law requiring the payment of a tourism
marketing fee of $2.00 per occupied room by casino hotels in Atlantic City.
While the Corporation believes that these fees have not had a significant impact
on its operations, there is no assurance that future laws or changes in existing
laws will not have an adverse effect.

Employees

      As of December 31, 1996, New Claridge employed approximately 2,100
persons, of whom approximately 800 are represented by labor unions.
Approximately 700 of the 800 are represented by the Hotel, Restaurant Employees
and Bartender International Union, AFL-CIO, Local 54. In September 1994, the
Corporation's collective bargaining agreement covering the employees represented
by Local 54 was renewed, together with the collective bargaining agreements of
all Atlantic City casinos with respect to Local 54, for a period of five years.
During the past three years, local unions have been active in their efforts to
organize non-union employees in Atlantic City.

      The management of the Claridge believes that its employee relations are
generally satisfactory. All of the employees represented by labor unions are
covered by collective bargaining agreements which prohibit work stoppages during
their terms.

Item 2.           PROPERTIES

      The Claridge hotel was constructed in 1929 at the northeastern end of
Absecon Island, on which Atlantic City is located. After remodeling,
modernization and expansion at a cost of approximately $138 million, the
Claridge opened as a casino-hotel in July 1981. Located in the Boardwalk Casino
section of

                                       13

<PAGE>



Atlantic City on Brighton Park, approximately 550 feet north of the Boardwalk,
the Claridge occupies three parcels of property.

      The casino-hotel, situated on the main parcel (41,408 square feet with 138
feet fronting the park and 300 feet deep), is a concrete steel frame structure,
26 stories high at its highest point. The valet-parking garage, situated on an
adjacent parcel of land (21,840 square feet) west of the casino-hotel site, is
an eight-level reinforced concrete ramp structure, built in 1981. Including the
bus drive-through area, a bus patron waiting room and an electrical room, it
totals an area of 197,100 square feet and provides parking for approximately 475
vehicles. In 1996, New Claridge completed the construction of a self-parking
garage, located on a parcel of land (29,120 square feet) connected to the
existing valet-parking garage. The combined garage facility provides parking for
approximately 1,200 vehicles. The office building, situated on an adjacent
parcel of land (7,766 square feet), is a two-story reinforced concrete and brick
structure with a flat roof. Constructed about 50 years ago, its interior has
been modernized. The building is utilized as an administration facility, and
totals an area of 14,020 square feet. With the exception of the self-parking
garage, all of the facilities discussed are owned by the Partnership and are
leased to New Claridge under the Operating Lease and the Expansion Operating
Lease. The self-parking garage and the property on which it is located are owned
by New Claridge.

Item 3.  LEGAL PROCEEDINGS

      On July 10, 1996, ten days after its opening, a fatal accident occurred at
New Claridge's self-parking garage, in which the vehicle of two patrons breached
a cable restraint system, permitting their vehicle to drive through the side
wall of the self-parking garage. The vehicle fell four stories to the sidewalk
and street below, killing both occupants. As a result, New Claridge's
self-parking garage was closed until the end of September 1996, while various
investigations sought to determine the cause of the accident. At the same time,
New Claridge determined to remove the exterior wall cable restraint system and
replace it with a rigid I-beam barrier system.

      New Claridge has retained the law firm of Zelle and Larson LLP of
Minneapolis, Minnesota to assist in evaluating the recovery of certain expenses
incurred in reopening the self-parking garage and in evaluating potential lost
profit claims. Management of the Corporation intends to file a claim to recover
these expenses and lost profits; recovery of these claims would have a positive
impact on New Claridge's financial results and liquidity. No formal claims have
been filed to date, and there is no assurance that the Corporation will be
successful in realizing any recovery.

      The Corporation and its subsidiaries are not parties to any other material
litigation other than ordinary routine litigation which is incidental to its
business.

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

      None.

                                       14

<PAGE>



                                     PART II

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

      All issued and outstanding shares of the Corporation have been offered and
sold in reliance on exemptions from the registration requirements of the
Securities Act of 1933 as amended (the "Securities Act"). Therefore, there is no
established trading market for any class of shares of the Corporation. In
October 1983, 562,500 shares of Class A Stock were sold to Oppenheimer Holdings,
Inc., and certain officers and employees of Oppenheimer & Co., Inc., (placement
agent for the Partnership and the Corporation) at their par value, $.001 per
share, and 4,500,000 shares of Class A Stock were privately offered and sold at
$1.2336306 per share. At the same time, 562,500 shares of Class B Stock were
sold to Webb at their par value, $.001 per share. On March 24, 1989, Oppenheimer
Holdings, Inc. returned to the Corporation all of its shares (273,938) of the
Corporation's Class A Stock. On June 16, 1989, all of the outstanding shares of
the Corporation's Class B Stock, all of which was owned by Webb, was returned to
the Corporation and cancelled. As of March 28, 1996, there were approximately
490 holders of record of the Class A Stock. The Contingent Payment Rights (see
Item 1. Business - "Contingent Payment") received by Releasing Investors may or
may not be securities. The Corporation, the Partnership and Webb filed a
registration statement under the Securities Act with respect to the Contingent
Payment Rights as if they were securities and each of the Corporation, the
Partnership and Webb were an issuer of such securities. However, by such action
none of the Corporation, the Partnership or Webb admitted that the Contingent
Payment Rights are securities or that any of them is the issuer of any such
securities. There is no market for the Contingent Payment Rights.

      The Indenture restricts the declaration or payment of dividends or
distributions or redemptions of capital stock by the Corporation and its
subsidiaries, other than (i) dividends or distributions payable in equity
interests of the Corporation or such subsidiaries, (ii) dividends or
distributions payable to the Corporation or any wholly-owned subsidiary, or
(iii) dividends by a subsidiary on its common stock if such dividends are paid
pro-rata to all holders of such common stock.

      In addition, the Corporation and the Partnership have agreed not to make
any distributions to the holders of their equity securities, whether derived
from operations or from sale or refinancing proceeds, until the Contingent
Payment has been satisfied (see Item 1. Business - "Contingent Payment").

















                                       15

<PAGE>



Item 6.           SELECTED FINANCIAL DATA

      The following table summarizes certain selected consolidated financial
data for the years ended December 31, 1996, 1995, 1994, 1993 and 1992.
<TABLE>
<CAPTION>

                                               1996             1995             1994             1993              1992
                                               ----             ----             ----             ----              ----
                                                            (in thousands except per share data)
Income Statement Data

<S>                                           <C>                <C>             <C>              <C>               <C>
Net revenues                                  $ 193,311          203,348         190,755          189,672           182,204

Net (loss) income                             $ (15,389)          (1,908)         (6,901)           5,132             6,048

Net (loss) income per share                   $   (3.05)            (.38)          (1.37)            1.02              1.21

Balance Sheet Data at Year End

Total assets                                   $164,163          189,074         190,484          146,338           148,305

Current assets                                 $ 31,753           55,542          59,426           22,736            20,383

Current liabilities                            $ 39,027           40,420          37,003           34,270            34,298

Long-term debt, net of
 note payable and
 current installments
 of long-term debt                             $ 85,000           85,000          85,000           35,259            40,301


Stockholders' (deficiency) equity              $ (9,834)           5,555           7,463           14,364             9,232
</TABLE>


                                       16

<PAGE>



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

Results of Operations for the Year Ended December 31, 1996

        The Corporation had a loss of $20,787,000 before an income tax benefit
of $5,398,000 for the year ended December 31, 1996, as compared to a loss of
$2,278,000 before an income tax benefit of $370,000 for the year ended December
31, 1995.

        For the year ended December 31, 1996, casino revenue, which is the
difference between amounts wagered by and paid to casino patrons, was
$163,369,000, a decrease of 3.7% from 1995 casino revenue of $169,607,000, and
an increase of 4.6% over 1994 casino revenue. Citywide casino revenues, as
reported for the year ended December 31, 1996, increased 1.8% over 1995
revenues. Citywide casino revenues in the first quarter of 1996 were adversely
affected by several severe winter storms, most notably the January blizzard,
which blanketed the Northeastern United States with a record amount of snow;
this compared to the mild weather conditions experienced in the first quarter of
1995. In the second quarter of 1996, the Trump World's Fair casino commenced
operations, contributing to the 9.1% increase in citywide casino square footage
in 1996. In addition, the number of hotel rooms available citywide increased in
the second quarter of 1996 with the opening of the Trump World's Fair casino
(approximately 500 rooms) and the Tropicana's new 600-room hotel tower, adding
to the already intense competition for casino patrons. On July 10, 1996, the
Claridge's self-parking garage, which had opened on June 28, 1996, was closed
due to a fatal accident, and 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. In addition, major
infrastructure improvements in Atlantic City related to the construction of the
new convention center and the corridor project linking the center to the
boardwalk have resulted in considerable traffic congestion on roads leading into
and around Atlantic City.

        Claridge table games revenue for 1996 was $40,374,000, an increase of
2.9% over table games revenue earned during 1995. Although table games drop (the
amount of gaming chips purchased by patrons) during 1996 increased 6.5% over
1995, the "hold" percentage (the ratio of win to drop) decreased to 14.8% in
1996, from 15.3% in 1995. The increase in table games drop activity in 1996 was
a result of the introduction of several new player development programs,
including a junket/splinter program, and the offering of gaming chip coupons, as
well as the introduction of certain specialty table games, such as "Caribbean
Stud Poker" and "Let It Ride Poker". Citywide table games revenue, as reported
for 1996, increased 1.1% over 1995 revenue.

        Slot machine revenue earned by New Claridge in 1996 totalled
$122,995,000, reflecting a 5.6% decrease from 1995 slot machine revenue.
Citywide slot machine revenue as reported for 1996 increased 2.1% over 1995 slot
machine revenue. The decrease experienced by the Claridge, and many of the other
Atlantic City casinos, resulted from the increased competition as a result of,
most notably, the opening of the Trump World's Fair casino in May 1996, as well
as minor expansions of existing casino space at other properties. The average
number of slot machines available citywide in 1996 increased 10.5% over 1995,
while the average number of slot machines available at the Claridge in 1996 was
consistent with 1995.

        Beginning in the latter part of 1995, competition for bus customers
began to increase, in the form of increased coin incentives offered to these
customers. Because of its lack of a self-parking garage at that time, and
therefore its dependency on the bus market, New Claridge had to remain
competitive with the incentives offered by other Atlantic City casinos in order
to maintain its share of this market. In 1996, the competition for bus customers
became even more intense, as the average cost of coin incentives issued to
patrons arriving by bus

                                       17

<PAGE>



to the Claridge increased to approximately $19 in 1996, from approximately $13
in 1995. In total, during 1996, New Claridge issued $19,495,000 in coin
incentives to 1,015,000 bus patrons, compared to $12,502,000 of coin incentives
issued to 976,000 bus patrons. In addition, New Claridge offers promotional
incentives to its customers, in the form of coin to play slot machines and
gaming chips to play table games based on their levels of gaming activity. In
1995, New Claridge also offered incentives to prospective customers who were
identified based on demographic models; analysis of the results of this program
resulted in a reduction of prospecting efforts, starting in late 1995.
Promotional incentives issued through the direct marketing programs in 1996
totalled $11,031,000, compared to $12,667,000 in 1995.

        Hotel revenues earned in 1996 of $9,150,000 were in line with hotel
revenues earned during 1995. Hotel occupancy during 1996 was 91%, with an
average room rate of $56, comparable to the 92% occupancy in 1995, with an
average room rate of $55. For the year ended December 31, 1996, New Claridge
earned food and beverage revenues of $20,602,000, a 4.2% increase over 1995
revenues. The increase in food and beverage revenues was due to an increase in
the average price per cover (meals served) to $8.08 in 1996, from $7.40 in 1995,
primarily in banquet functions. The total number of covers served during 1996
was 1,735,000, a decrease from the 1,775,000 covers in 1995. The decrease in
covers was primarily due to the closing of New Claridge's "fast food" outlet in
September 1996; this outlet was reopened later in the year as a "fast food"
Chinese restaurant, managed by an independent operator. Other revenues earned
during 1996 of $2,671,000 increased over 1995 other revenues of $2,136,000,
primarily due to an increase in showroom revenues resulting from a more
aggressive entertainment policy in 1996. Promotional allowances, which represent
the value of goods and services provided free of charge to casino customers
under various marketing programs, increased to $19,241,000 in 1996, from
$16,326,000 in 1995, due to the increased efforts to maintain casino revenue
market share. As a result, hotel, food and beverage, and other revenues, net of
promotional allowances, for the year ended December 31, 1996 were $13,182,000, a
decrease from those revenues net of promotional allowances for the year ended
December 31, 1995 of $14,774,000.

        Total costs and expenses for the year ended December 31, 1996 of
$214,098,000 were 4.1% higher than 1995 expenses of $205,626,000, primarily as a
result of the increase in coin incentives issued through the bus program, which
are included in casino expenses. In addition, the increase in casino expenses
over 1995 was also due to the increase in the cost of providing promotional
allowances to casino patrons; these costs are allocated from the hotel, food and
beverage, and other expenses. General and administrative costs in 1996 increased
6.6% over 1995 costs, primarily as a result of increased advertising
expenditures during the year. Depreciation and amortization expense for 1996
increased over 1995 as a result of the opening of the self-parking garage; the
cost of the garage will be depreciated over 39 years. Interest expense in 1996
was slightly lower than interest expense in 1995 due to the capitalization of
interest during the construction of the self-parking garage.

        The Corporation recorded an income tax benefit of $5,398,000 for the
year ended December 31, 1996, which represents the tax benefit likely to be
realized as a result of the carry foward of Federal net operating losses, net of
an increase in the valuation allowance of $2,460,000 and increased deferred tax
credits. For the year ended December 31, 1995, the Corporation recorded an
income tax benefit of $370,000, which represented the tax refund likely to be
realized as a result of the carry forward of Federal net operating losses, net
of increased deferred tax credits.

Results of Operations for the Year Ended December 31, 1995

        The Corporation had a loss of $2,278,000 before an income tax benefit of
$370,000 for the year ended December 31, 1995, as compared to a loss of
$9,294,000 before an income tax benefit of $2,393,000 for the year ended
December 31, 1994.


                                       18

<PAGE>



        For the year ended December 31, 1995, casino revenue was $169,607,000,
an increase of 8.6% over 1994 casino revenue of $156,159,000, and 9.7% higher
than 1993 casino revenue. In the first half of 1995, New Claridge discontinued
its poker, simulcasting, and keno operations, in order to utilize the gaming
space for more profitable slot operations. Casino revenues earned by all
Atlantic City casinos during the year ended December 31, 1995, as reported,
increased 9.5% over 1994 casino revenue.

        New Claridge earned table games revenue of $39,239,000 during the year
ended December 31, 1995, a slight increase over 1994 table games revenue. The
increase in table games revenue resulted from an increase in the hold percentage
to 15.3% in 1995, from 14.2% in 1994, offset by a 6.8% decline in table games
drop. Citywide, table games drop and revenue, as reported, increased 4.3% and
4.4% respectively, over 1994 levels. The average number of table games available
at the Claridge during 1995 decreased 5.4% as a result of the discontinuation of
the poker and keno operations; citywide, the average number of table games
available in 1995 increased 2.1% from 1994 averages.

        Slot machine revenue earned by New Claridge for the year ended December
31, 1995 totalled $130,353,000, an increase of 11.5% over slot machine revenue
earned in 1994. The expansion of New Claridge's casino floor space, with the
addition of approximately 500 slot machines, in mid-1994, was reflected in the
14.5% increase in New Claridge's average number of slot machines available in
1995 over 1994 averages. Citywide, the average number of slot machines available
in 1995 increased 10.0% over 1994 averages, contributing to the 12.0% increase
in citywide slot machine revenues, as reported, for the year ended December 31,
1995 over the prior year.

          Competition for bus patrons began to intensify in the fourth quarter
of 1995. After three years of decreases in the number of bus patrons visiting
Atlantic City casinos, in 1995 visitation increased by 10%. The increased
competition took the form of higher coin incentives, which New Claridge matched,
thus increasing its per patron average coin cost to approximately $13 in 1995
from approximately $11 in 1994. In total, $12,502,000 of coin incentives were
issued to 976,000 bus patrons arriving at the Claridge, compared to $9,179,000
of incentives issued to 835,000 bus passengers in 1994. In addition, for the
year ended December 31, 1995, $12,667,000 in cash incentives were issued to
patrons through New Claridge's direct marketing programs, compared to
$11,595,000 issued during the year ended December 31, 1994.

        For the year ended December 31, 1995, New Claridge earned hotel revenues
of $9,195,000, a 16.1% decrease from 1994 hotel revenues. This decrease was due
to a decline in the average room rate, to $55 in 1995 from $67 in 1994, in part
as a result of a reduction in the complimentary room rate recorded. Rooms
occupancy in 1995 was 92%, in line with the 1994 occupancy. Food and beverage
revenues earned in 1995 were $19,769,000, an increase of 7.8% over 1994
revenues. The increase in food and beverage revenues over 1994 was due to a 3.5%
increase in the number of covers, to 1,775,000 in 1995 from 1,715,000, combined
with an increase in the average price per cover to $7.40 in 1995 from $7.14 in
1994. In addition, complimentary revenues earned from beverages served on the
casino floor increased 8.7%, as a result of the increase in business volumes in
the casino. Other revenues for the year ended December 31, 1995 of $2,136,000
decreased from revenues for the year ended December 31, 1994 of $2,547,000, due
to the assumption, in October 1994, of the Claridge's gift shop operation by an
outside vendor.

        Total costs and expenses for the year ended December 31, 1995 of
$205,626,000 were 2.8% higher than 1994 expenses of $200,049,000, primarily due
to the increase in cash incentives issued to casino patrons. In addition, food
and beverage costs for 1995 increased 13.8% over 1994 costs, primarily due to
the increase in business volumes. Other expenses for 1995 of $2,961,000
decreased from 1994 levels as a result of the change in the operation of the
Claridge's gift shop, as discussed above.


                                       19

<PAGE>



        The Corporation recorded an income tax benefit of $370,000 for the year
ended December 31, 1995, which represents the tax refund likely to be realized
as a result of the carry forward of Federal net operating losses, net of
increased deferred tax credits. For the year ended December 31, 1994, the
Corporation recorded an income tax benefit of $2,393,000, which represented the
tax refund expected from the carry back of Federal net operating losses net of
increased deferred tax credits.

Liquidity and Capital Resources

        On January 31, 1994, the Corporation completed an offering of $85
million of Notes (see Item 1. Business - "Corporate Structure"). 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. 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, totalling $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 costs
attributable to building the garage facility); and (iv) to acquire the
Contingent Payment Option (see Item 1. Business - "Contingent Payment") 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.

        Beginning in 1995, and annually thereafter, the Corporation is required
to make an offer ("Excess Cash Offer") to all holders of Notes, to purchase at
100% of par (plus accrued and unpaid interest, if any, to the purchase date),
the maximum amount of Notes that may be purchased with 50% of the Corporation's
"Excess Cash" (as defined in the Indenture), from the preceding year. If less
than $5 million is available to make such payments (i.e. if Excess Cash is less
than $10 million), no such offer needs to be made. The commencement date of any
required Excess Cash Offer must be not later than 30 days after the publication
of the Corporation's audited financial statements for the immediately preceding
fiscal year. For the year ended December 31, 1996, the Corporation's Excess Cash
was less than $10 million, and therefore the Corporation is not required to make
an Excess Cash Offer in 1997.

        At December 31, 1996, the Corporation had working capital deficit of
$7,274,000, as compared to working capital of $15,122,000 at December 31, 1995.
The decrease in working capital is principally attributable to decreases in cash
and cash equivalents of $27,215,000 (primarily due to payments for the
construction of the self-parking garage amounting to approximately $13 million
and interest paid on the Notes of $9,987,500), offset by a decrease in accounts
payable of $883,000 (primarily due to accruals at December 31, 1995 related to
the construction of the self-parking garage), a decrease in other current
liabilities of $510,000 (primarily in accrued

                                       20

<PAGE>



payroll and related benefits), an increase in receivables of $2,936,000
(principally due to an increase in the current portion of the Expandable
Wraparound Mortgage due from the Partnership), and an increase in prepaid
expenses and other current assets of $491,000. Current liabilities at December
31, 1996 and 1995 included deferred rental payments of $15,078,000, and the $3.6
million loan from the Partnership plus accrued interest thereon of $3,258,000
and $2,826,000 at December 31, 1996 and 1995, respectively. The deferred rental
payments and $3.6 million loan 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 December 31, 1996 and 1995 would have been
$14,662,000 and $36,626,000, respectively.

        For the year ended December 31, 1996, cash flows used in operating
activities were $22,650,000, compared to cash flows provided by operating
activities of $4,892,000 for the year ended December 31, 1995. The increase in
cash used in operating activities was primarily due to the increase in pre-tax
net loss, as well as a $4 million income tax refund received in the second
quarter of 1995; the income tax benefit was included in other current assets at
December 31, 1994. Cash flows used in investment activities for the years ended
December 31, 1996 and 1995 were $4,565,000 and $6,389,000, respectively. Cash
flows used in investment activities for 1996 for additions to property and
equipment included expenditures for the construction of the self- parking
facility; in 1995, additions to property and equipment included the cost of the
acquisition of the land on which the garage facility was constructed, as well as
construction expenditures. Expenditures for property and equipment in 1996 and
1995 were offset by Expandable Wraparound Mortgage principal payments of
$13,845,000 and $12,014,000, respectively.

        For the year ended December 31, 1996, the Corporation's "Adjusted
EBITDA" was $2,222,000, compared to $19,897,000 for the year ended December 31,
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. For the
year ended December 31, 1996, the ratio of earnings (defined as pre-tax income
(loss) from continuing operations, adjusted to exclude fixed charges consisting
of interest expense, interest capitalized, and such portion of rental expense as
can be demonstrated to be representative of the interest factor) to fixed
charges decreased to .06, from .85 in 1995, and .58 in 1994. The deficiency of
earnings to fixed charges in 1996, 1995 and 1994 was $21,828,000, $3,416,000,
and $9,294,000, respectively.

        During 1994 and 1995, the cash provided by operations of the Claridge
was sufficient to meet the Corporation's obligations to pay interest on the
Notes, as well as to make at least some moderate capital improvements.
Commencing in the latter part of 1995, however, competition in the Atlantic City
casino market for bus customers, a principal source of customers for the
Claridge at the time, increased; this competition intensified even more during
1996 as additional casino square footage was added, principally due to the
opening of the Trump World's Fair casino. During 1996, the average coin
incentive issued per bus patron at the Claridge increased to approximately $19,
from approximately $13 in 1995. Total cash incentives issued to Claridge's
casino patrons (in the form of coin to play slot machines and gaming chips to
play table games) increased to approximately $30.5 million in 1996, from
approximately $25.2 million in 1995. While the Corporation's

                                       21

<PAGE>



promotional costs increased significantly, total casino revenues in 1996
actually decreased from 1995 levels. It had been the expectation of the
Corporation that, upon the opening of its new self-parking garage, the
Corporation would be able to reduce its reliance on the bus patron market;
however, the Corporation was forced to close the garage facility on July 10,
1996, only ten days after its opening, following a fatal accident. Because the
facility was not able to reopen until the end of September 1996, the Corporation
lost any possible benefit of the facility during the normally busy summer
season. In addition, severe winter weather in the first quarter of 1996
adversely affected revenues. As a result, the Corporation experienced a net loss
for 1996 of $15.4 million, compared to a net loss of $1.9 million in 1995.

        In late July 1996, management of the Corporation determined that due to
the serious deterioration in the Corporation's cash flow, that without a
significant improvement in its operating results, it was unlikely that the
Corporation would be able to meet its obligations to pay interest on the Notes
beyond the August 1996 payment. In addition to taking steps to conserve cash by
reducing various operating expenses, the Corporation engaged a financial
advisor, Dillon, Read & Co., Inc., to assist in formulating a proposal to the
holders of the Notes to restructure the Corporation's obligations under the
Notes. At the same time, the Corporation was working with Dillon, Read & Co.,
Inc. to attempt to find a buyer of the Corporation, or an investor that would be
in a position to inject additional capital into the Corporation to enable the
Corporation to meet its ongoing obligations. To date, the Corporation has not
received any acceptable proposals in regards to the possible sale of the
Corporation.

        In November 1996, while the sales efforts were continuing, the
Corporation announced that there was a strong likelihood that the Corporation
would be unable to pay the interest due on the Notes on February 3, 1997.
Accordingly, management, working together with financial and legal advisors,
formulated a plan for restructuring the Corporation's obligations. The terms of
the proposed plan were presented to the noteholders at a meeting held on
December 3, 1996, at which time the noteholders were urged to form a steering
committee or other representative body to conduct negotiations. Although a group
of noteholders formed and met with the management of the Corporation on a few
occasions, by the time the committee formally organized itself on January 7,
1997, it consisted of six members representing ownership of less than 5% of the
total amount of Notes outstanding. At that time, the Corporation determined that
the committee did not represent a sufficient portion of the noteholders to
negotiate on behalf of the noteholders generally. As a result, the Corporation
did not formally recognize the committee and did not engage in any negotiation
with the committee or its members, although it did encourage the members of the
committee to continue to attempt to obtain broader representation of the
noteholders.

        On January 12, 1997, management of the Corporation was contacted,
through an agent, by Hilton Hotel Corporation ("Hilton"), regarding a possible
sale of the Corporation to Hilton, and shortly thereafter, the Corporation began
negotiations with Hilton. On January 30, 1997, the Corporation issued a press
release indicating that the Corporation would not make the interest payment due
on the Notes on February 3, 1997, and that the Corporation had entered
negotiations with Hilton regarding acquisition of the Corporation by Hilton
through a prepackaged bankruptcy plan. At that time, a representative of Hilton
indicated that Hilton had acquired approximately 35% to 40% of the Notes. On
February 5, 1997, three holders of the Notes, who were members of the unofficial
committee which they had formed, filed a petition for involuntary bankruptcy
against the Corporation in the bankruptcy court for the District of New Jersey.

        Contemporaneously, the same three holders of the Notes filed a related
state court lawsuit against the Corporation, New Claridge, the Partnership,
certain officers and directors of the Corporation, and the general partners of
the Partnership. On March 4, 1997, contrary to earlier expectations, the
Corporation was able to pay the interest that was due on the Notes on February
3, 1997, under the 30-day grace period allowed in accordance with the terms of
the Indenture. In addition, the Corporation reached agreement with the
unofficial committee

                                       22

<PAGE>



of noteholders, as well as the three holders of the Notes, providing for the
joint dismissal of the involuntary bankruptcy petition and the related state
court lawsuit. On March 19, 1997, an order was entered dismissing the
involuntary bankruptcy petition; as part of that order, a settlement agreement
was entered whereby the state court lawsuit was also dismissed. The Corporation
expects the negotiations with Hilton to continue.

        The Corporation had sufficient cash to pay the interest on the Notes on
March 4, 1997 due to several events: (i) cash flow from operations for January
and February 1997 improved significantly over what had been expected; (ii)
effective March 1, 1997, the Operating Lease and Expansion Operating Lease were
amended to provide for the deferral of basic rent of $1.3 million on March 1,
1997 (see Item 1. Business - "Certain Agreements between the Corporation, New
Claridge and the Partnership"); and (iii) 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 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.

        As discussed, the Corporation experienced recurring losses and serious
deterioration in its cash flow in 1996. Since the Corporation does not have
substantial cash reserves or access to a line of credit, the Corporation will
need to experience a significant improvement in operating results in 1997 over
1996 levels in order to meet its on-going obligations, including the interest
due on the Notes. Operating results in 1997 have improved over 1996 levels, due
primarily to the positive impact of the availability of the self-parking garage.
Although management of the Corporation believes that operating results will
continue to improve over prior year levels, no assurances as to the continuation
of this improvement can be given. Management will continue to conserve cash
through various cost containment measures, including limiting capital
expenditures in 1997 to approximately $1 million. Given the various improvements
made to the property in recent years, including the casino expansion in 1994,
the construction of the self-parking garage, and other projects such as the
refurbishment of all of its guest rooms, the current condition of the property
is such that the above-mentioned level of capital expenditures is deemed
adequate. Management will also continue to work with Dillon, Read & Co., Inc. to
pursue a sale of the Corporation or some other plan for a significant infusion
of capital into the Corporation. In addition, New Claridge has retained the law
firm of Zelle and Larson LLP of Minneapolis, Minnesota to assist in evaluating
the recovery of certain expenses incurred in reopening the self-parking garage
and in evaluating potential lost profit claims as a result of the accident which
occurred in the self-parking garage on July 10, 1996. Management of the
Corporation intends to file a claim to recover these expenses and lost profits;
recovery of these claims would have a positive impact on New Claridge's
financial results and liquidity. No formal claims have been filed to date, and
there is no assurance that the Corporation will be successful in realizing any
recovery.

        New Claridge is obligated under the Operating Lease 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,
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 First Mortgage 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.

                                       23

<PAGE>



        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 totalling $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 face amount outstanding of the
Expandable Wraparound Mortgage at December 31, 1996 (including the outstanding
FF&E Loans and the $20 million of deferred interest) was $117.5 million.

        Effective March 1, 1997, the Corporation, New Claridge, and the
Partnership entered into a restructuring agreement, pursuant to which New
Claridge agreed to use its best efforts to cause a modification of the
Expandable Wraparound Mortgage (the "Wraparound Modification") that is permitted
by, or is in compliance with, the terms of the Indenture. The Wraparound
Modification, if so permitted, will provide for an extension of the maturity
date of the Expandable Wraparound Mortgage from September 30, 2000 to January 1,
2004. If the Wraparound Modification is not permitted by or in compliance with
the terms of the Indenture, New Claridge has agreed to effect the Wraparound
Modification at such time as the Notes are no longer outstanding. In addition to
the modification to the Expandable Wraparound Mortgage, the Corporation, New
Claridge, and the Partnership agreed to modify certain terms of the Operating
Lease and Expansion Operating Lease agreements, as discussed below.

        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. During
the third quarter of 1991, 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. As of December 31, 1996, $37.3 million of basic rent had been abated.
The remaining $1.5 million of available abatement was fully utilized in the
first quarter of 1997. Additional abatements of rent totalling $500,000, which
became available as a result of the acquisition of

                                       24

<PAGE>



the option to purchase the Contingent Payment, were also utilized in the first
quarter of 1997. Further abatements would become available in the event that the
Contingent Payment option is exercised (see Item 1. Business - "Contingent
Payment"). Because the initial term of the Operating Lease continues through
September 30, 1998, rental payments after the abatements are fully utilized
would increase substantially to approximately $39.7 million in 1997, as compared
to approximately $31.5 million (net of abatements of $8.4 million) in 1996.

        The Fifth Amendment to the Operating Lease and the Fourth Amendment to
the Expansion Operating Lease, which were effective on March 1, 1997, provided
for the abatement of $867,953 of basic rent and for the deferral of $1,300,000
of basic rent on March 1, 1997, and provide for additional abatements of basic
rent, commencing on April 1, 1997, as necessary to reduce the Partnership's cash
flow to an amount necessary only to meet the Partnership's cash requirements
through December 31, 1998. The $1.3 million of basic rent deferred on March 1,
1997 is to be paid to the Partnership in monthly installments of $25,000 for the
period April 1, 1997 through December 31, 1997, and monthly installments of
$50,000 for the year 1998 and thereafter until paid in full. For the years 1999
through 2003, additional abatements of basic rent will be reduced to provide the
Partnership with amounts needed to meet the Partnership's cash requirements plus
an additional amount ($83,333 per month in 1999 and 2000, $125,000 per month in
2001, and $166,667 per month in 2002 and 2003).

        In addition, under the March 1, 1997 restructuring agreement between the
Corporation, New Claridge, and the Partnership, New Claridge agreed to exercise
the first of three ten-year renewal options extending the term of the Operating
Lease and Expansion Operating Lease through September 30, 2008.

        Under the terms of the Operating Lease, as amended effective March 1,
1997, New Claridge has an option to purchase, on September 30, 1998, the Hotel
Assets and the underlying land for their fair market value at the time the
option is exercised, which in no event may be less than an amount equal to the
amount then outstanding under the Expandable Wraparound Mortgage plus $2.5
million, plus any amount of the $1.3 million of rent deferred on March 1, 1997
not then paid. If New Claridge does not exercise this option on September 30,
1998, it may exercise an option, on September 30, 2003, to purchase the Hotel
Assets and the underlying land on January 1, 2004, for their fair market value
at the time the option is exercised.

        Basic rent during the renewal term of the Operating Lease 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. Basic
rent during the renewal term of the Expansion Operating Lease will also 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. Therefore,
the aggregate basic rent payable during the initial years of the renewal term of
the leases 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.

        The effective tax rate was (26%) for the year ended December 31, 1996
compared to (16%) for the year ended December 31, 1995, caused by the ratio of
the increased loss over disallowed deductions and the increase in valuation
allowance as compared to the prior year loss and disallowed deductions. The
components of income tax expense did not change significantly from the prior
year except for an increase in the valuation allowance of $2,460,000 which was
provided against deferred tax assets as of December 31, 1996. There was no
change in the valuation allowance for the year ended December 31, 1995.

                                       25

<PAGE>



Recently Issued Accounting Pronouncements

        During the first quarter of 1996, the Corporation 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 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
company 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 1996.

Factors Which May Influence the Corporation's Future Operating Results

        The Atlantic City gaming market is expected to experience significant
growth beginning over the next several years, as Atlantic City transforms itself
from a "day-trip" market to a "destination resort." As a result of current high
room occupancy rates, a more favorable regulatory climate, the reduced threat of
competition from potential new gaming jurisdictions, and significant
infrastructure developments making Atlantic City more accessible, significant
new investments are planned, including the expansion of existing casinos and the
construction of several new casinos. As more of these facilities are opened, it
is possible that the increased casino capacity will not be absorbed as quickly
as it is opened, and competition for gaming patrons will heighten.

        In addition to the expansion of the Atlantic City gaming market, casino
activity outside of Atlantic City could have an impact on the Corporation's
future operating results. Although the expansion of legalized gaming throughout
the United States slowed somewhat during 1995 and 1996, current operations in
certain markets, most notably Indian gaming in Connecticut and slot machine
facilities at the Delaware racetracks, may have had, and may continue to have,
an impact on the Atlantic City casino industry. In 1996, the three racetracks in
Delaware which offer slot machines (one of which opened in August 1996) reported
revenues of $184.4 million. The Mohegan Sun Resort, which opened in Uncasville,
Connecticut in October 1996, reported an average win per slot machine per day of
$310, compared to the Atlantic City average win per slot machine per day of $228
in 1996. In addition, although New York and Pennsylvania have not, to date, been
successful in legalizing casino gaming, management believes that, should casino
gaming be legalized in the future in those states, the effects on Atlantic City
casinos and on the Claridge would depend on the form and scope of such gaming.

Item 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The Financial Statements and Financial Statement Schedules are set forth
at pages F-1 to F-31 of the report.

Item 9.        DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.


                                       26

<PAGE>



                                    PART III


Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THIS REGISTRANT

    Name                        Office                                   Age
    ----                        ------                                   ---
    David W. Brenner            Chairman, Director                        61
    Robert M. Renneisen         President, Director                       50
    Shannon L. Bybee            Director                                  59
    A. Bruce Crawley            Director                                  51
    Ned P. DeWitt               Director                                  57
    James M. Montgomery         Director                                  57
    Mark H. Sayers              Director                                  47
    Jean I. Abbott              Executive Vice President                  41
    Frank A. Bellis, Jr.        Senior Vice President,  Secretary         43
    Albert T. Britton           Executive Vice President                  40
    Glenn S. Lillie             Vice President                            48
    Raymond A. Spera            Executive Vice President, Treasurer       40

Business Experience

        Mr. Brenner has served as a member of the Board of Directors of the
Corporation since February 1991, and became Chairman of the Board of Directors
in August 1993. He served as President of the Philadelphia Sports Congress from
January 1987 through June 1994. Mr. Brenner served as Chairman of the Hospital
and Higher Education Facilities Authority of Philadelphia from January 1986 to
June 1992, as Director of Commerce of the City of Philadelphia from January 1984
to September 1986, and as Director of Finance from April 1991 through December
1991. He was with the accounting firm of Arthur Young & Company from 1957 to
September 1983. He was managing partner of the Philadelphia office of Arthur
Young from November 1969 until March 1980.

        Mr. Renneisen has served as President of the Corporation since June
1992, as Chief Executive Officer of the Corporation and New Claridge since July
1993, and as Vice Chairman of New Claridge since June 1994. Mr. Renneisen was
Executive Vice President of the Corporation from June 1991 to June 1992. He
served as President of New Claridge from January 1991 to January 1996. He was
Chief Operating Officer of New Claridge from January 1991 to July 1993. Mr.
Renneisen was Executive Vice President of New Claridge, responsible for
marketing and later casino operations from February 1988 to January 1991. Prior
to joining New Claridge, Mr. Renneisen served from January 1987 to December 1987
as Vice President of Marketing of Treasure Island Hotel and Casino in St.
Maarten. From June 1986 to May 1987, he served as President of Renneisen,
Kincade & Associates, Inc. of Las Vegas, Nevada, a marketing consulting firm. He
was Senior Vice President of Marketing of the Tropicana Hotel and Casino in
Atlantic City from May 1982 to August 1984.

      Mr. Bybee has served as a member of the Board of Directors of the
Corporation since July 1988. He currently is Associate Professor for Gaming
Management, Law & Regulation, at University of Nevada Las Vegas, where he
occupies the Michael D. Rose Distinguished Chair in Gaming, a position he has
held since August 1994. From July 1993 to August 1994 Mr. Bybee served as
President and Chief Operating Officer for United Gaming, Inc. Mr. Bybee was the
Corporation's Chairman of the Board from November 1988 to July 1993, and from
August 1988 to October 1988. In June 1989, Mr. Bybee was appointed to serve as
the Chief Executive Officer of the Corporation and New Claridge, a position he
held through July 1993. From 1983 to

                                       27

<PAGE>



1987, he was Senior Vice President of Golden Nugget, Incorporated which operated
the Golden Nugget Casino Hotel in Atlantic City. From 1981 to 1983, Mr. Bybee
was President of GNAC Corporation, which operated the Golden Nugget Casino Hotel
in Atlantic City.

        Mr. Crawley has served as a member of the Board of Directors of the
Corporation since February 1995. He currently serves as President and Director
of Public Relations and Marketing Services for Crawley, Haskins & Rodgers, a
Philadelphia based public relations and advertising firm. Prior to establishing
his own firm in May 1989, Mr. Crawley was employed at First Pennsylvania Bank
and First Pennsylvania Corporation, where he served as Senior Vice President and
Director of Public and Investor Relations. He also served, from 1976 to 1979, as
Vice President and Director of Advertising for First Pennsylvania Bank and First
Pennsylvania Corporation.

        Mr. DeWitt has served as a member of the Board of Directors of the
Corporation since May 1995. Mr. DeWitt has served as President, Chief Executive
Officer, and a member of the Board of Directors of LBE Technologies,
Incorporated, in Saratoga, California, since November 1994. From November 1993,
to August 1994, he served as President of SEGA Enterprises, (USA) in Redwood
City, California. Mr. DeWitt also served as President of the Entertainment Group
of Madison Square Garden from July 1990 to August 1991, and as President of
Source Service Corporation from December 1986 to April 1989. He also served,
from 1973 through 1982, as President and Chief Executive Officer of Six Flags
Corporation.

      Mr. Montgomery has served as a member of the Board of Directors of the
Corporation since March 1995. Since 1978, he has served as President of Houze,
Shourds, and Montgomery, Inc., a management consulting firm located in Long
Beach, California. Prior to 1978, Mr. Montgomery held various managerial
positions with Rohr Industries, Inc. and Rockwell International.

      Mr. Sayers has served as a member of the Board of Directors of the
Corporation since February 1990. Mr. Sayers has served as Vice President of EMES
Management Corporation, a real estate management and development company, of New
York, New York, since February 1976.

        Ms. Abbott served as a member of the Board of Directors of the
Corporation from August 1989 to June 1994, and served as a consultant to the
Corporation until March 26, 1994, at which time she became a Vice President of
New Claridge. Currently, Ms. Abbott serves as Executive Vice President of
Operations of New Claridge, a position she has held since September 1996. From
July 1995 to August 1996, she was Executive Vice President of Marketing and
Casino Operations. From October 1992 to July 1993, Ms. Abbott was Finance
Director for the United Way of Atlantic County. She was Assistant Professor at
Stockton State College from September 1989 to June 1991. She served as Senior
Vice President, Treasurer of the Corporation and Senior Vice President,
Controller of New Claridge from May 1987 to September 1989. She was Vice
President, Controller of New Claridge from October 1985 to May 1987 and she was
Director of Finance of New Claridge from April 1984 to October 1985. From
October 1980 through April 1984, Ms. Abbott held various executive positions
with New Claridge and its corporate predecessor.

        Mr. Bellis has served as Vice President, General Counsel and Secretary
to the Corporation since August 1993. He also has served as Senior Vice
President and General Counsel of New Claridge since February 1994, as Vice
President and General Counsel of New Claridge from September 1992 to February
1994, and as Secretary of New Claridge since August 1993. Previously, from May
1985 to August 1992, Mr. Bellis was Corporate Counsel and Secretary to
Inductotherm Industries, Inc., Rancocas, New Jersey. During 1984 and 1985, Mr.
Bellis was Associate General Counsel for New Claridge. Prior to joining New
Claridge, he was a Deputy Attorney General in the New Jersey Division of
Criminal Justice in the State Attorney General's office.


                                       28

<PAGE>



        Mr. Britton has served as Executive Vice President of the Corporation
since June 1994 and as President and Chief Operating Officer of New Claridge
since January 1996. He served as Executive Vice President and General Manager of
New Claridge from February 1994 through July 1995, and as Executive Vice
President from August 1995 through December 1995. He served as a Vice President
of the Corporation from June 1992 to June 1994, and as Executive Vice President
of Operations of New Claridge from December 1992 to February 1994. He was Senior
Vice President of Operations of New Claridge from December 1991 to December
1992, and Vice President of Casino Operations from June 1990 to November 1991.
From July 1981 through June 1990, Mr. Britton has held various positions in both
accounting and casino operations with New Claridge and its corporate
predecessor.

        Mr. Lillie has served as Vice President of the Corporation from June
1992 and as Vice President of Marketing Communications of New Claridge since
December 1995. He served as Vice President of Public Affairs of New Claridge
from February 1990 to December 1995. He was Vice President of Marketing
Communications of New Claridge from April 1985 to February 1990, Director of
Public Relations from March 1982 to January 1983, and Training Manager from
November 1980 to February 1982. From February 1983 to April 1985, Mr. Lillie was
employed as the Director of Public Relations of the Tropicana Hotel and Casino
in Atlantic City.

        Mr. Spera has served as Executive Vice President of the Corporation
since August 1993. He served as Vice President of the Corporation from December
1989 to August 1993, and as Assistant Secretary of the Corporation from December
1991 to August 1993. He also has served as Executive Vice President of Finance
and Corporate Development of New Claridge since December 1992. Mr. Spera was
Senior Vice President of Finance and Corporate Development of New Claridge from
December 1991 to December 1992 and Vice President of Finance of New Claridge
from December 1989 to December 1991. From April 1982 through November 1989, Mr.
Spera has held various accounting positions with New Claridge and its corporate
predecessor. Prior to joining New Claridge, he spent three years with the
accounting firm of KPMG Peat Marwick LLP.

        Further information regarding the directors and certain executive
officers of the Corporation and/or New Claridge is incorporated by reference to
the information contained under the caption "Voting" in the Corporation's Proxy
Statement for the Annual Meeting of Shareholders to be held on June 10, 1997.

Item 11. EXECUTIVE COMPENSATION

        Information contained under the caption "Executive Compensation" in the
Corporation's Proxy Statement for the Annual Meeting of Shareholders to be held
on June 10, 1997 is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      On March 24, 1989, Oppenheimer Holdings, Inc. returned to the Corporation
all of its shares (273,938) of the Corporation's Class A Common Stock.

        On June 16, 1989, in accordance with the terms of the Restructuring
Agreement, all of the outstanding shares of the Corporation's Class B Stock, all
of which was owned by Webb, was returned to the Corporation and cancelled.

        As of December 31, 1996, there were no beneficial owners of more than 5%
of the Corporation's Class A Stock.


                                       29

<PAGE>



        On February 12, 1992, the Corporation's Board of Directors approved a
Long Term Incentive Plan which provided for the grant to certain key officers of
the Corporation and/or New Claridge of the 273,938 shares which were held as
treasury shares by the Corporation. These shares were issued to the key
employees upon approval by the Commission on April 15, 1992, and upon receipt
the transfer of, and right to continue to hold the shares, are subject to
certain vesting restrictions.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The Partnership has a direct material interest in the Expandable
Wraparound Mortgage Loan Agreement, the Operating Lease and the Expansion
Operating Lease together with amendments thereto. See Item 1.
Business - "Corporate Structure."


                                       30

<PAGE>



                                     PART IV


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

        (a)(1) and (2): The response to this portion of Item 14 is submitted as
                        a separate section of this report beginning on page F-1.
                        All other schedules have been omitted as inapplicable,
                        or not required, or because the required information is
                        included in the Consolidated Financial Statements or
                        notes thereto.

         (a)(3)   Exhibits. The exhibits required to be filed as part of this
                  annual report on Form 10-K are listed in the attached Index to
                  Exhibits.

         (b)      Reports on Form 8-K. The Corporation filed no reports on Form
                  8-K during the last quarter of the period covered by this
                  report.

         (c)      Index to Exhibits and Exhibits filed as a part of this report.
<TABLE>
<CAPTION>

<S>                <C>              <C>
                   3(a)             Certificate of Incorporation of the Corporation. Incorporated by
                                    reference to Exhibit 3(a) to Form 10-K for the year ended
                                    December 31, 1995.

                   3(b)             By-Laws of the Corporation as amended. Incorporated by reference
                                    to Exhibit 3(b) to Form 10-K for the year ended December 31,
                                    1995.

                   3(c)             Certificate of Amendment of The Certificate of Incorporation of
                                    the Corporation dated June 15, 1989. Incorporated by reference
                                    to Exhibit 3(c) to Form 10-K for the year ended December 31,
                                    1995.

                   3(d)             Certificate of Amendment of The Certificate of Incorporation
                                    dated June 26, 1991. Incorporated by reference to Exhibit 3(d)
                                    to Form 10-K for the year ended December 31, 1995.

                   4(a)             Form of Indenture (including the Guarantee of The Claridge at
                                    Park Place, Incorporated). Incorporated by reference to Exhibit
                                    4.1 to Pre-Effective Amendment No. 2 to Form S-1 Registration
                                    Statement (file number 33-71550) dated January 18, 1994.

                   4(b)             Form of 11 3/4% First Mortgage Note due 2002 certificate.
                                    Incorporated by reference to Exhibit 4.2 to Pre-Effective
                                    Amendment No. 2 to Form S-1 Registration Statement (file number
                                    33-71550) dated January 18, 1994.

                   10(a)            Operating Lease Agreement between New Claridge and Atlantic City
                                    Boardwalk Associates, L.P. Incorporated by reference to Exhibit
                                    10(a) to Form 10-K for the year ended December 31, 1995.

                   10(b)            Expandable Wraparound Mortgage and Security Agreement between
                                    New Claridge and Atlantic City Boardwalk Associates, L.P.
                                    Incorporated by reference to Exhibit 10(b) to Form 10-K for the
                                    year ended December 31, 1995.


</TABLE>

                                       31

<PAGE>

<TABLE>
<CAPTION>

<S>                <C>              <C>

                   10(c)            Expandable Wraparound Mortgage Loan Agreement between New
                                    Claridge and Atlantic City Boardwalk Associates, L.P.
                                    Incorporated by reference to Exhibit 10(c) to Form 10- K for the
                                    year ended December 31, 1995.

                   10(h)            Expansion Operating Lease Agreement between New Claridge and
                                    Atlantic City Boardwalk Associates, L.P. Incorporated by
                                    reference to Exhibit 10(h) to Form 10-K for the year ended
                                    December 31, 1995.

                   10(i)            First Supplemental Amendment to Expandable Wraparound Mortgage
                                    and Security Agreement between New Claridge and Atlantic City
                                    Boardwalk Associates, L.P. Incorporated by reference to Exhibit
                                    10(i) to Form 10-K for the year ended December 31, 1995.

                   10(j)            First Supplemental Amendment to Expandable Wraparound Mortgage
                                    Loan Agreement between New Claridge and Atlantic City Boardwalk
                                    Associates, L.P. Incorporated by reference to Exhibit 10(j) to
                                    Form 10-K for the year ended December 31, 1995.

                   10(n)            Restructuring Agreement, among The Claridge Hotel and Casino
                                    Corporation, The Claridge at Park Place, Incorporated, Del Webb
                                    Corporation, Del E. Webb New Jersey, Inc., Atlantic City
                                    Boardwalk Associates, L.P. and First Fidelity Bank, National
                                    Association, New Jersey, dated October 27, 1988. Incorporated by
                                    reference to Exhibit 10(n) to Form 10-K for the year ended
                                    December 31, 1995.

                   10(x)            Long Term Management Incentive Plan of The Claridge Hotel and
                                    Casino Corporation effective January 1, 1992. Incorporated by
                                    reference to Exhibit 10(x) to Form 10-K for the year ended
                                    December 31, 1995.

                   10(ab)           Amendment to Operating Lease Agreement and Expansion Operating
                                    Lease Agreement between New Claridge and Atlantic City Boardwalk
                                    Associates, L.P., dated June 15, 1989. Incorporated by reference
                                    to Exhibit 10.5 to Form S-1 Registration Statement (file number
                                    33-71550) dated November 12, 1993.

                   10(ac)           Second Amendment to Operating Lease Agreement and Expansion
                                    Operating Lease Agreement between New Claridge and Atlantic City
                                    Boardwalk Associates, L.P., dated March 27, 1990. Incorporated
                                    by reference to Exhibit 10.6 to Form S-1 Registration Statement
                                    (file number 33-71550) dated November 12, 1993.

                   10(ad)           Third Amendment to Operating Lease Agreement and Expansion
                                    Operating Lease Agreement between New Claridge and Atlantic City
                                    Boardwalk Associates, L.P., dated August 1, 1991. Incorporated
                                    by reference to Exhibit 10.7 to Form S-1 Registration Statement
                                    (file number 33-71550) dated November 12, 1993.

                   10(ae)           First Amendment to Expandable Wraparound Mortgage Loan Agreement
                                    between New Claridge and Atlantic City Boardwalk Associates,
                                    L.P., dated March 17, 1986. Incorporated by reference to Exhibit
                                    10.8 to Form S-1 Registration Statement (file number 33-71550)
                                    dated November 12, 1993.

</TABLE>


                                       32

<PAGE>

<TABLE>
<CAPTION>

<S>                <C>              <C>

                   10(af)           Second Amendment to Expandable Wraparound Mortgage Loan
                                    Agreement between New Claridge and Atlantic City Boardwalk
                                    Associates, L.P., dated June 15, 1989. Incorporated by reference
                                    to Exhibit 10.9 to Form S-1 Registration Statement (file number
                                    33-71550) dated November 12, 1993.

                   10(ag)           Second Amendment to Expandable Wraparound Mortgage and Security
                                    Agreement between New Claridge and Atlantic City Boardwalk
                                    Associates, L.P., dated June 15, 1989. Incorporated by reference
                                    to Exhibit 10.11 to Form S-1 Registration Statement (file number
                                    33-71550) dated November 12, 1993.

                   10(ah)           The 1992 Claridge Management Incentive Plan. Incorporated by
                                    reference to Exhibit 10.18 to Form S-1 Registration Statement
                                    (file number 33-71550) dated November 12, 1993.

                   10(ai)           The 1993 Claridge Management Incentive Plan. Incorporated by
                                    reference to Exhibit 10.19 to Form S-1 Registration Statement
                                    (file number 33-71550) dated November 12, 1993.

                   10(aj)           Form of Mortgage, Assignment of Leases and Rents, Security
                                    Agreement and Financing Statement. Incorporated by reference to
                                    Exhibit 4.3 to Pre-Effective Amendment No. 2 to Form S-1
                                    Registration Statement (file number 33-71550) dated January 18,
                                    1994.

                   10(ak)           Form of Collateral Trust Agreement among the Corporation, New
                                    Claridge, the Partnership and the Collateral Trustee.
                                    Incorporated by reference to Exhibit 4.4 to Pre- Effective
                                    Amendment No. 2 to Form S-1 Registration Statement (file number
                                    33-71550) dated January 18, 1994.

                   10(al)           Form of Corporation Pledge Agreement between the Corporation and
                                    the Collateral Trustee. Incorporated by reference to Exhibit 4.5
                                    to Pre-Effective Amendment No. 2 to Form S-1 Registration
                                    Statement (file number 33-71550) dated January 18, 1994.

                   10(am)           Form of New Claridge Pledge Agreement between New Claridge and
                                    the Collateral Trustee. Incorporated by reference to Exhibit 4.6
                                    to Pre-Effective Amendment No. 2 to Form S-1 Registration
                                    Statement (file number 33-71550) dated January 18, 1994.

                   10(an)           Form of New Claridge Cash Collateral Pledge Agreement between
                                    New Claridge and the Collateral Trustee. Incorporated by
                                    reference to Exhibit 4.7 to Pre-Effective Amendment No. 2 to
                                    Form S-1 Registration Statement (file number 33-71550) dated
                                    January 18, 1994.

                   10(ao)           Form of New Claridge Security Agreement between New Claridge and
                                    the Collateral Trustee. Incorporated by reference to Exhibit 4.8
                                    to Pre-Effective Amendment No. 2 to Form S-1 Registration
                                    Statement (file number 33-71550) dated January 18, 1994.

                   10(ap)           Form of New Claridge Trademark Security Agreement between New
                                    Claridge and the Collateral Trustee. Incorporated by reference
                                    to Exhibit 4.9 to Pre-Effective Amendment No. 2 to Form S-1
                                    Registration Statement (file number 33-71550) dated January 18,
                                    1994.
</TABLE>


                                       33

<PAGE>

<TABLE>
<CAPTION>

<S>                <C>              <C>

                   10(aq)           Form of Collateral Assignment of Expandable Wraparound Mortgage
                                    and Security Agreement. Incorporated by reference to Exhibit
                                    4.10 to Pre-Effective Amendment No. 2 to Form S-1 Registration
                                    Statement (file number 33-71550) dated January 18, 1994.

                   10(ar)           Form of Collateral Assignment of Lessor's Interest in Operating
                                    Leases. Incorporated by reference to Exhibit 4.13 to
                                    Pre-Effective Amendment No. 2 to Form S-1 Registration Statement
                                    (file number 33-71550) dated January 18, 1994.

                   10(as)           Form of Subordination Agreement among the Partnership, New
                                    Claridge and the Collateral Trustee. Incorporated by reference
                                    to Exhibit 4.14 to Pre-Effective Amendment No. 2 to Form S-1
                                    Registration Statement (file number 33-71550) dated January 18,
                                    1994.

                   10(at)           Form of Assignment of Leases and Rents and Other Contract
                                    Rights. Incorporated by reference to Exhibit 4.15 to
                                    Pre-Effective Amendment No. 2 to Form S-1 Registration Statement
                                    (file number 33-71550) dated January 18, 1994.

                   10(bb)           Supplemental Executive Retirement Plan of The Claridge at Park
                                    Place, Incorporated effective January 1, 1994. Incorporated by
                                    referenece to Exhibit 10(bb) to Form 10-K for the year ended
                                    December 31, 1994.

                   10(bc)           Amendment to Long-Term Management Incentive Plan of The Claridge
                                    Hotel and Casino Corporation effective June 5, 1995.
                                    Incorporated by reference to Exhibit 10(bc) to Form 10-K for the
                                    year ended December 31, 1995.

                   10(bd)           Option Agreement between The Claridge Hotel and Casino
                                    Corporation, Philip J. Dion, as Trustee for the Valley of the
                                    Sun United Way, and Atlantic City Boardwalk Associates, L.P.,
                                    dated November 29, 1995. Incorporated by reference to Exhibit
                                    10(bd) to Form 10-K for the year ended December 31, 1995.

                   10(be)           Escrow Agreement between The Claridge Hotel and Casino
                                    Corporation, Philip J. Dion, as Trustee for the Valley of the
                                    Sun United Way, and IBJ Schroder Bank & Trust Company dated
                                    November 29, 1995. Incorporated by reference to Exhibit 10(be)
                                    to Form 10-K for the year ended December 31, 1995.

                   10(bf)           Side Agreement between The Claridge Hotel and Casino
                                    Corporation, The Claridge at Park Place, Incorporated, and
                                    Atlantic City Boardwalk Associates, L.P. dated November 29,
                                    1995. Incorporated by reference to Exhibit 10(bf) to Form 10-K
                                    for the year ended December 31, 1995.

                   10(bg)           First Amendment to the Option Agreement between The Claridge
                                    Hotel and Casino Corporation, Philip J. Dion, as Trustee for the
                                    Valley of the Sun United Way, and Atlantic City Boardwalk
                                    Associates, L.P. dated January 30, 1996. Incorporated by
                                    reference to Exhibit 10(bg) to Form 10-K for the year ended
                                    December 31, 1995.
</TABLE>


                                       34

<PAGE>

<TABLE>
<CAPTION>

<S>                <C>              <C>


                   10(bh)           First Amendment to the Side Agreement between The Claridge Hotel
                                    and Casino Corporation, The Claridge at Park Place,
                                    Incorporated, and Atlantic City Boardwalk Associates, L.P. dated
                                    February 21, 1996. Incorporated by reference to Exhibit 10(bh)
                                    to Form 10-K for the year ended December 31, 1995.

                   10(bj)           Amended Employment Agreement between Robert M. Renneisen and The
                                    Claridge at Park Place, Incorporated effective January 1, 1997.

                   10(bk)           Amended Employment Agreement between Albert T. Britton and The
                                    Claridge at Park Place, Incorporated effective January 1, 1997.

                   10(bl)           Amended Employment Agreement between Raymond A. Spera and The
                                    Claridge at Park Place, Incorporated effective January 1, 1997.

                   10(bm)           Amended Employment Agreement between Jean I. Abbott and The
                                    Claridge at Park Place, Incorporated effective November 1, 1996.

                   10(bn)           Employment Agreement between Frank A. Bellis, Jr. and The
                                    Claridge at Park Place, Incorporated effective November 1, 1996.

                   10(bo)           Employment Agreement between Glenn Lillie and The Claridge at
                                    Park Place, Incorporated effective February 1, 1997.

                   10(bp)           Spreader Agreement of a Certain Mortgage, Assignment of Leases
                                    and Rents, Security Agreement and Financing Statement by The
                                    Claridge at Park Place, Incorporated in favor of IBJ Schroder
                                    Bank & Trust Company, as Collateral Trustee, dated January 28,
                                    1997.

                   10(bq)           Spreader Agreement and Modification of Spreader Agreement of a
                                    Certain Mortgage, Assignment of Leases and Rents, Security
                                    Agreement and Financing Statement by The Claridge at Park Place,
                                    Incorporated in favor of IBJ Schroder Bank & Trust Company, as
                                    Collateral Trustee, dated February 18, 1997.

                   10(br)           Fifth Amendment to Operating Lease Agreement and Fourth
                                    Amendment to Expansion Operating Lease Agreement between The
                                    Claridge at Park Place, Incorporated and Atlantic City Boardwalk
                                    Associates, L.P. effective March 1, 1997.

                   10(bs)           Restructuring Agreement between The Claridge Hotel and Casino
                                    Corporation, The Claridge at Park Place, Incorporated and
                                    Atlantic City Boardwalk Associates, L.P. effective March 1,
                                    1997.

                   12(a)            Statement of Computation of Ratio of Earnings to Fixed Charges.
                                    Incorporated by reference to Exhibit 12.1 to Form S-1
                                    Registration Statement (file number 33-71550) dated November 12,
                                    1993.

                   12(b)            Statement of Computation of Ratio of Earnings to Fixed Charges.

                   22(a)            Subsidiaries of the Corporation. Incorporated by reference to
                                    Exhibit 22(a) to Form 10- K for the year ended December 31,
                                    1995.
</TABLE>

                                       35

<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                      CLARIDGE HOTEL AND CASINO CORPORATION

<TABLE>
<CAPTION>

<S>                           <C>                                   <C>
Dated:  March 28, 1997         By:/s/ ROBERT M. RENNEISEN           By:/s/ RAYMOND A. SPERA
                                  ---------------------------          ---------------------------
                                      Robert M. Renneisen                  Raymond A. Spera
                                     Chief Executive Officer               Chief Financial Officer and
                                                                           Principal Accounting Officer
</TABLE>

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


<CAPTION>

         Signature                                   Capacity                                        Date
         ---------                                   --------                                        ----
<S>                                                 <C>                                        <C>


/s/ DAVID W. BRENNER
-------------------------                           Chairman, Director                          March 28, 1997
David W. Brenner

 /s/ ROBERT M. RENNEISEN
------------------------                             President, Director                         March 28, 1997
Robert M. Renneisen                                  (Chief Executive Officer)

/s/ SHANNON L. BYBEE
-------------------------                            Director                                    March 28, 1997
 Shannon L. Bybee

 /s/ A. BRUCE CRAWLEY
-------------------------                            Director                                    March 28, 1997
A. Bruce Crawley


/s/ NED P. DEWITT
-------------------------                            Director                                    March 28, 1997
Ned P. DeWitt


 /s/ JAMES M. MONTGOMERY
-------------------------                            Director                                    March 28, 1997-
James M. Montgomery


 /s/ MARK H. SAYERS
-------------------------                            Director                                    March 28, 1997
Mark H. Sayers



 /s/ RAYMOND A. SPERA
-------------------------                            Executive Vice President                    March 28, 1997
Raymond A. Spera                                     (Chief Financial Officer/
                                                     Treasurer/Principal
                                                     Accounting Officer)
</TABLE>



                                       36

<PAGE>



           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES




                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULE



<TABLE>
<CAPTION>


                                                                                         Page
                                                                                     Reference In
                                                                                       Report on
                                                                                       Form 10-K
                                                                                     ------------

<S>                                                                                         <C>
Independent Auditors' Report....................................................          F-2

Consolidated Balance Sheets at December 31, 1996 and 1995.......................          F-3

Consolidated Statements of Operations and Accumulated (Deficit) Earnings
 for the Years Ended December 31, 1996, 1995 and 1994...........................          F-4

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1996, 1995 and 1994..............................................          F-5

Notes to Consolidated Financial Statements......................................          F-7

Financial Statement Schedule:

         Schedule II - Valuation and Qualifying Accounts........................         F-31

</TABLE>

         All other schedules for which provision is made in the applicable
         accounting regulations promulgated by the Securities and Exchange
         Commission are not required under the related instructions or are
         inapplicable and therefore have been omitted.


                                       F-1

<PAGE>





                          Independent Auditors' Report


The Board of Directors and Stockholders
The Claridge Hotel and Casino Corporation:


We have audited the consolidated financial statements of The Claridge Hotel and
Casino Corporation and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial statement schedule
are the responsibility of the Corporation's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Claridge Hotel
and Casino Corporation and subsidiaries at December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996 in conformity with generally accepted
accounting principles. Also in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

The accompanying consolidated financial statements and financial statement
schedule have been prepared assuming that the Corporation will continue as a
going concern. As discussed in Note 2 to the consolidated financial statements,
the Corporation has suffered recurring losses from operations and has
experienced diminishing liquidity as a result of a serious deterioration in its
cash flow and limited availability of working capital sources that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are discussed in Note 2. The consolidated
financial statements and financial statement schedule do not include any
adjustments that might result from the outcome of this uncertainty.




                                                           KPMG Peat Marwick LLP
Short Hills, New Jersey
March 7, 1997

                                       F-2

<PAGE>



           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                           December 31, 1996 and 1995
                             (dollars in thousands)
<TABLE>
<CAPTION>

                                                                                                   1995            1995
                                                                                                   ----            ----
<S>                                                                                           <C>                  <C>
Assets
Current Assets:
     Cash and cash equivalents                                                                 $   8,532             35,747
     Receivables, net (including $18,392 and $15,391 in 1996
       and 1995, respectively, due from Partnership) (note 4)                                     19,744             16,808
     Inventories                                                                                     278                279
     Prepaid expenses and other current assets                                                     3,199              2,708
                                                                                               ---------           --------
         Total current assets                                                                     31,753             55,542
                                                                                               ---------           --------
Property and equipment (note 5)                                                                   48,818             36,848
     Less accumulated depreciation and amortization                                              (13,630)           (12,380)
                                                                                               ---------           --------
         Net property and equipment                                                               35,188             24,468
                                                                                               ---------           --------
Long-term receivables due from Partnership (note 4)                                               92,120            104,207
Deferred charges at cost, less accumulated amortization                                            2,575              2,930
Other assets (note 6)                                                                              2,527              1,927
                                                                                               ---------           --------
                                                                                                $164,163            189,074
                                                                                               =========           ========
Liabilities and Stockholders' Equity
Current Liabilities:
     Accounts payable                                                                         $    2,997              3,880
     Loan from the Partnership (note 7)                                                            3,600              3,600
     Other current liabilities (note 8)                                                           32,430             32,940
                                                                                               ---------           --------
         Total current liabilities                                                                39,027             40,420
                                                                                               ---------           --------

Long-term debt (note 9)                                                                           85,000             85,000
Deferred rent due to Partnership (note 13)                                                        28,010             30,747
Deferred income taxes (note 12)                                                                    2,581              7,123
Other noncurrent liabilities (note 10)                                                            19,379             20,229

Commitments and contingent liabilities (notes 13 and 15)

Stockholders' equity (notes 16 and 17):
     Common stock
       Class A, par value $.001, authorized and
         issued 5,062,500 shares                                                                       5                  5
     Additional paid-in capital                                                                    5,048              5,048
     Accumulated (deficit) earnings                                                              (14,887)               502
     Treasury stock, 16,436 Class A shares at
       cost in 1996 and 1995, respectively                                                           -0-                -0-
                                                                                               ---------           --------

         Total stockholders' (deficiency) equity                                                  (9,834)             5,555
                                                                                               ---------           --------

                                                                                                $164,163            189,074
                                                                                               =========           ========
</TABLE>

           See accompanying notes to consolidated financialstatements.

                                       F-3

<PAGE>



           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
    Consolidated Statements of Operations and Accumulated (Deficit) Earnings
              For the Years Ended December 31, 1996, 1995 and 1994
                      (in thousands except per share data)
<TABLE>
<CAPTION>

                                                                             1996                1995               1994
                                                                             ----                ----               ----
<S>                                                                      <C>                  <C>                 <C>
Revenue:
     Casino                                                                $163,369             169,607            156,159
     Hotel                                                                    9,150               9,195             10,962
     Food and beverage                                                       20,602              19,769             18,346
     Interest from the Partnership                                           16,007              17,195             17,906
     Interest, other                                                            753               1,772              1,519
     Other                                                                    2,671               2,136              2,547
                                                                           --------            --------            -------
                                                                            212,552             219,674            207,439
     Less promotional allowances (note 11)                                   19,241              16,326             16,684
                                                                           --------            --------            -------
         Net revenues                                                       193,311             203,348            190,755
                                                                           --------            --------            -------
Costs and expenses:
     Casino                                                                 100,220              92,571             89,077
     Hotel                                                                    2,673               3,224              3,141
     Food and beverage                                                       10,938              11,783             10,352
     Other                                                                    2,967               2,961              3,615
     Rent expense to the Partnership (note 13)                               38,561              37,638             36,219
     Rent expense, other (note 13)                                            1,484               1,512              1,531
     General and administrative                                              30,539              28,641             28,807
     Gaming taxes                                                            13,053              13,583             12,443
     Reinvestment obligation expenses (note 6)                                  836               1,442              1,972
     Provision for uncollectible accounts                                       238                (160)               492
     Depreciation and amortization                                            3,239               2,915              2,444
     Interest expense, other                                                  9,350               9,516              9,956
                                                                           --------            --------            -------
         Total costs and expenses                                           214,098             205,626            200,049
                                                                           --------            --------            -------
Loss before income taxes                                                    (20,787)             (2,278)            (9,294)
Income tax benefit (note 12)                                                 (5,398)               (370)            (2,393)
                                                                           --------            --------            -------
Net loss                                                                    (15,389)             (1,908)            (6,901)
                                                                           --------            --------            -------
Accumulated earnings  at beginning of period                                    502               2,410              9,311
                                                                           --------            --------            -------
Accumulated (deficit) earnings at end of period                            $(14,887)                502              2,410
                                                                           ========            ========            =======
Net loss per share (note 3(i))                                             $  (3.05)               (.38)             (1.37)
                                                                           ========            ========            =======

</TABLE>



          See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>



           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
              For the Years Ended December 31, 1996, 1995 and 1994
                                 (in thousands)

<TABLE>
<CAPTION>



                                                                             1996                1995               1994
                                                                             ----                ----               ----

<S>                                                                       <C>                  <C>               <C>
Cash flows from operating activities:
     Net loss                                                              $(15,389)             (1,908)            (6,901)
     Adjustments to reconcile net loss to net cash
       (used in) provided by operating activities:

       Depreciation and amortization                                          3,239               2,915              2,444
       Deferred rent to the Partnership                                      (2,737)             (2,386)            (3,209)
       Deferred interest receivable and
         discount from the Partnership                                       (1,524)             (1,326)            (1,154)
       Reinvestment obligation expenses                                         836               1,442              1,972
       (Gain) loss on disposal of assets                                       (138)                (33)                87
       Deferred income taxes - noncurrent                                    (4,542)               (762)             1,782

       Change in assets and liabilities:
         Receivables, net, excluding current portion
           of long-term receivables                                             338                (629)               497
         Inventories                                                              1                  45                 99
         Prepaid expenses and other current
           assets excluding current portion of
           reinvestment obligation credit                                      (491)              3,888             (2,815)
         Accounts payable                                                      (883)              1,098                273
         Other current liabilities                                             (510)              2,319              2,460
         Other noncurrent liabilities                                          (850)                229                -0-
                                                                           --------            --------            -------
Net cash flows (used in) provided by
     operating activities                                                   (22,650)              4,892             (4,465)
                                                                           --------            --------            -------


</TABLE>




                                   (Continued)




           See accompanying notes to consolidated financial statements

                                       F-5

<PAGE>



           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Cont'd.)
              For the Years Ended December 31, 1996, 1995 and 1994
                                 (in thousands)


<TABLE>
<CAPTION>


                                                                             1996                1995               1994
                                                                             ----                ----               ----
<S>                                                                     <C>                      <C>               <C>
Cash flows from investment activities:
     Increase in deferred charges                                       $      (195)                (59)               (77)
     Additions to property and equipment, net                               (13,455)            (17,493)            (7,116)
     Additions to other assets                                               (1,436)              1,557             (3,666)
     Proceeds from disposition of property                                      184                  75                 75
     Increase in long-term receivables                                       (3,508)             (2,483)            (9,610)
     Receipt of long-term receivables                                        13,845              12,014             10,509
                                                                           --------            --------            -------
Net cash flows used in investment activities                                 (4,565)             (6,389)            (9,885)
                                                                           --------            --------            -------
Cash flows from financing activities:
     Proceeds from issuance of long-term debt                                   -0-                 -0-             85,000
     Payment of long-term debt                                                  -0-                 -0-            (33,559)
     Increase in deferred charges related to issuance
        of long term debt                                                       -0-                 -0-             (3,340)
     Payment of revolving credit line borrowings                                -0-                 -0-             (9,325)
     Increase in revolving credit line borrowings                               -0-                 -0-              7,625
                                                                           --------            --------            -------
Net cash flows provided by financing activities                                 -0-                 -0-             46,401
                                                                           --------            --------            -------
(Decrease) increase in cash and cash equivalents                            (27,215)             (1,497)            32,051

Cash and cash equivalents at beginning of period                             35,747              37,244              5,193
                                                                           --------            --------            -------
Cash and cash equivalents at end of period                                 $  8,532              35,747             37,244
                                                                           ========            ========            =======
Supplemental cash flow disclosures:
     Interest paid, net of amounts capitalized                             $  8,918               9,084              5,365
                                                                           ========            ========            =======
     Income taxes paid                                                     $    -0-                 677                181
                                                                           ========            ========            =======

</TABLE>





          See accompanying notes to consolidated financial statements.

                                       F-6

<PAGE>



           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


1.      THE CORPORATION

        The Claridge Hotel and Casino Corporation (the "Corporation"), was
        formed on August 26, 1983 to hold all of the shares of capital stock of
        The Claridge at Park Place, Incorporated ("New Claridge"), which was
        formed on August 29, 1983. On October 31, 1983, New Claridge acquired
        certain assets of The Claridge Hotel and Casino (the "Claridge"),
        including gaming equipment (the "Casino Assets"), from Del E. Webb New
        Jersey, Inc. ("DEWNJ"), a wholly-owned subsidiary of Del Webb
        Corporation ("Webb"); leased certain other of the Claridge's assets,
        including the buildings, parking facility and non-gaming, depreciable,
        tangible property of the Claridge (the "Hotel Assets"), from Atlantic
        City Boardwalk Associates, L.P. (the "Partnership"); subleased the land
        on which the Claridge is located from the Partnership; assumed certain
        liabilities related to the acquired assets; and undertook to carry on
        the business of the Claridge Casino Hotel, a facility operating in
        Atlantic City, New Jersey.

        In October 1988, the Corporation and New Claridge entered into an
        agreement to restructure the financial obligations of the Corporation
        and New Claridge (the "Restructuring Agreement"). The restructuring,
        which was consummated in June 1989, resulted in (i) a reorganization of
        the ownership interests in the Claridge; (ii) modifications of the
        rights and obligations of certain lenders; (iii) satisfaction and
        termination of the obligations and commitments of Webb and DEWNJ under
        the original structure; (iv) modifications of the lease agreements
        between New Claridge and the Partnership; and (v) the forgiveness by
        Webb of substantial indebtedness.

        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 will be subordinated to
        liens that may 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. (See Note 9, "Long-Term Debt".)

        The net proceeds of the Notes, totalling $82.2 million net of fees and
        expenses, were used as follows: (i) to repay in full on January 31,
        1994, 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
        a first mortgage; (ii) to expand New Claridge's casino capacity 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; (iii) to purchase property in 1995, and construct on that
        property a self-parking garage, which opened in mid-1996; and (iv) to
        acquire the Contingent Payment option in 1996 (see Note 10, "Other
        Noncurrent Liabilities").

                                       F-7

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


2.      RECENT DEVELOPMENTS

        During 1994 and 1995, the cash provided by operations of the Claridge
        was sufficient to meet the Corporation's obligations to pay interest on
        the Notes, as well as to make at least some moderate capital
        improvements. Commencing in the latter part of 1995, however,
        competition in the Atlantic City casino market for bus customers, a
        principal source of customers for the Claridge at the time, increased;
        this competition intensified even more during 1996 as additional casino
        square footage was added, principally due to the opening of the Trump
        World's Fair casino. During 1996, the average coin incentive issued per
        bus patron at the Claridge increased to approximately $19, from
        approximately $13 in 1995. Total cash incentives issued to Claridge's
        casino patrons (in the form of coin to play slot machines and gaming
        chips to play table games) increased to approximately $30.5 million in
        1996, from approximately $25.2 million in 1995. While the Corporation's
        promotional costs increased significantly, total casino revenues in 1996
        actually decreased from 1995 levels. It had been the expectation of the
        Corporation that, upon opening of its new self-parking garage, the
        Corporation would be able to reduce its reliance on the bus patron
        market; however, the Corporation was forced to close the garage facility
        on July 10, 1996, only ten days after its opening, following a fatal
        accident. Because the facility was not able to reopen until the end of
        September 1996, the Corporation lost any possible benefit of the
        facility during the normally busy summer season. In addition, severe
        winter weather in the first quarter of 1996 adversely affected revenues.
        As a result, the Corporation experienced a net loss for 1996 of $15.4
        million, compared to a net loss of $1.9 million in 1995.

        In late July 1996, management of the Corporation determined that due to
        the serious deterioration in the Corporation's cash flow, that without a
        significant improvement in its operating results, it was unlikely that
        the Corporation would be able to meet its obligations to pay interest on
        the Notes beyond the August 1996 payment. In addition to taking steps to
        conserve cash by reducing various operating expenses, the Corporation
        engaged a financial advisor, Dillon, Read & Co., Inc., to assist in
        formulating a proposal to the holders of the Notes to restructure the
        Corporation's obligations under the Notes. At the same time, the
        Corporation was working with Dillon, Read & Co., Inc. to attempt to find
        a buyer of the Corporation, or an investor that would be in a position
        to inject additional capital into the Corporation to enable the
        Corporation to meet its ongoing obligations. To date, the Corporation
        has not received any acceptable proposals in regards to the possible
        sale of the Corporation.

        In November 1996, while the sales efforts were continuing, the
        Corporation announced that there was a strong likelihood that the
        Corporation would be unable to pay the interest due on the Notes on
        February 3, 1997. Accordingly, management, working together with
        financial and legal advisors, formulated a plan for restructuring the
        Corporation's obligations. The terms of the proposed plan were presented
        to the noteholders at a meeting held on December 3, 1996, at which time
        the noteholders were urged to form a steering committee or some other
        representative body to conduct negotiations. Although a group of
        noteholders formed and met with the management of the Corporation on a
        few occasions, by the time the committee formally organized itself on
        January 7, 1997, it consisted of six members representing ownership of
        less than 5% of the total amount of Notes outstanding. At that time, the
        Corporation determined that the committee did not represent a sufficient
        portion of the noteholders to negotiate on behalf of

                                       F-8

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


2.      RECENT DEVELOPMENTS (cont'd.)

        the noteholders generally. As a result, the Corporation did not formally
        recognize the committee and did not engage in any negotiation with the
        committee or its members, although it did encourage the members of the
        committee to continue to attempt to obtain broader representation of the
        noteholders.

        On January 12, 1997, management of the Corporation was contacted,
        through an agent, by Hilton Hotel Corporation ("Hilton"), regarding a
        possible sale of the Corporation to Hilton, and shortly thereafter, the
        Corporation began negotiations with Hilton. On January 30, 1997, the
        Corporation issued a press release indicating that the Corporation would
        not make the interest payment due on the Notes on February 3, 1997, and
        that the Corporation had entered negotiations with Hilton regarding
        acquisition of the Corporation by Hilton through a prepackaged
        bankruptcy plan. At that time, a representative of Hilton indicated that
        Hilton had acquired approximately 35% to 40% of the Notes. On February
        5, 1997, three holders of the Notes, who were members of the unofficial
        committee which they had formed, filed a petition for involuntary
        bankruptcy against the Corporation in the bankruptcy court for the
        District of New Jersey.

        Contemporaneously, the same three holders of the Notes filed a related
        state court lawsuit against the Corporation, New Claridge, the
        Partnership, certain officers and directors of the Corporation, and the
        general partners of the Partnership. On March 4, 1997, contrary to
        earlier expectations, the Corporation was able to pay the interest that
        was due on the Notes on February 3, 1997, under the 30-day grace period
        allowed in accordance with the terms of the indenture governing the
        Notes (the "Indenture"). In addition, the Corporation reached agreement
        with the unofficial committee of noteholders, as well as the three
        holders of the Notes, providing for the joint dismissal of the
        involuntary bankruptcy petition and the related state court lawsuit. On
        March 19, 1997, an order was entered dismissing the involuntary
        bankruptcy petition; as part of that order, a settlement agreement was
        entered whereby the state court lawsuit was also dismissed.
        The Corporation expects the negotiations with Hilton to continue.

        The Corporation had sufficient cash to pay the interest on the Notes on
        March 4, 1997 due to several events: (i) cash flow from operations for
        January and February 1997 improved significantly over what had been
        expected; (ii) effective March 1, 1997, the Operating Lease and
        Expansion Operating Lease were amended to provide for the deferral of
        basic rent of $1.3 million on March 1, 1997 (see Note 13, "Operating
        Lease"); and (iii) 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 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.

        As discussed, the Corporation experienced recurring losses and serious
        deterioration in its cash flow in 1996. Since the Corporation does not
        have substantial cash reserves or access to a line of credit, the
        Corporation will need to experience a significant improvement in
        operating results

                                       F-9

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


2.      RECENT DEVELOPMENTS (cont'd.)

        in 1997 over 1996 levels in order to meet its on-going obligations,
        including the interest due on the Notes. Operating results in early 1997
        have improved over 1996 levels, due primarily to the positive impact of
        the availability of the self-parking garage. Although management of the
        Corporation believes that operating results will continue to improve
        over prior year levels, no assurances as to the continuation of this
        improvement can be given. Management will continue to conserve cash
        through various cost containment measures, and will continue to work
        with Dillon, Read & Co., Inc. to pursue a sale of the Corporation or
        some other plan for a significant infusion of capital into the
        Corporation. The financial statements do not include any adjustments
        relating to the recoverability and classification of recorded asset
        amounts or the amounts and classification of liabilities that might be
        necessary should the Corporation be unable to continue in its existence.

3.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        a)     Basis of Presentation

               The consolidated financial statements are prepared in accordance
               with generally accepted accounting principles. The consolidated
               financial statements include the accounts of the Corporation and
               its wholly-owned subsidiaries, New Claridge and Claridge Gaming
               Incorporated ("CGI"), which was formed in March 1994 for the
               purpose of developing gaming opportunities in other
               jurisdictions. All material intercompany accounts and
               transactions have been eliminated in consolidation.

               The separate financial statements of New Claridge, which is a
               guarantor of the Notes, are not included because the aggregate
               assets, liabilities, operations and equity of New Claridge are
               substantially equivalent to the assets, liabilities, operations
               and equity of the Corporation on a consolidated basis, and
               because the separate financial statements and other disclosures
               concerning New Claridge are not deemed material to holders of
               Notes. There are no separate financial statements for CGI, which
               is the only other subsidiary of the Corporation and is not a
               guarantor of the Notes.

               Certain reclassifications have been made to the 1995 and 1994
               consolidated financial statements to conform to the 1996
               presentation.

        b)     Use of Estimates

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the reported amounts
               of assets and liabilities and disclosure of contingent assets and
               liabilities at the date of the financial statements and the
               reported amounts of revenues and expenses during the reporting
               period. Actual results could differ from those estimates.



                                      F-10

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


3.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)

        c)     Cash and Cash Equivalents

               Cash and cash equivalents includes investments in interest
               bearing repurchase agreements in government securities and other
               investments as permitted in accordance with the terms of the
               indenture governing the Notes, with maturities of three months or
               less when purchased. Interest income is recorded as earned.

        d)     Casino Receivables and Revenues

               Credit is issued to certain casino customers and the Corporation
               records all unpaid credit as casino receivables on the date the
               credit was issued. Allowances for estimated uncollectible casino
               receivables are provided to reduce these receivables to amounts
               anticipated to be collected. The Corporation recognizes as casino
               revenue, the net win (which is the difference between amounts
               wagered and amounts paid to winning patrons) from gaming
               activity.

        e)     Inventories

               Inventories are stated at the lower of cost or market, cost being
               determined principally on a first-in, first-out basis.

        f)     Property and Equipment

               Property and equipment are recorded at cost, and are depreciated
               using the straight-line method over the following estimated
               useful lives:

                         Buildings and improvements               39 years
                         Gaming equipment                          5 years
                         Other equipment                           7 years

               Interest costs related to the construction of the garage facility
               were capitalized, and are being amortized over the estimated
               useful life of the garage.

        g)     Deferred Charges

               Deferred charges primarily relate to the January 31, 1994
               issuance of the Notes. These charges, which totaled approximately
               $3.7 million, are being amortized over the term of the Notes.
               Accumulated amortization of these charges as of December 31, 1996
               and 1995 was $1,364,000 and $896,000, respectively.





                                      F-11

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


3.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)

        h)     Income Taxes

               Deferred income taxes are provided for temporary differences
               between financial statement reporting and income tax reporting
               for rent leveling provisions, asset basis differences, and
               various other expenses recorded for financial statement purposes.

        i)     Earnings Per Share

               Earnings per share is calculated based on the weighted average
               shares outstanding (5,046,064 for the year ended December 31,
               1996, 5,050,792 for the year ended December 31, 1995, and
               5,035,819 for the year ended December 31, 1994).



                                      F-12

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)



4.      RECEIVABLES

        Receivables at December 31, 1996 and 1995 consist of the following:
<TABLE>
<CAPTION>

<S>                                                                                            <C>             <C>
        Current Receivables                                                                    1996            1995
                                                                                               ----            ----
                                                                                                 (in thousands)
                  Casino, less allowance for uncollectible accounts
                    of $846,000 and $932,000 at
                    December 31, 1996 and 1995, respectively                                $  1,097              821
                  Hotel, less allowance for uncollectible accounts
                    of $39,000 and $41,000 at December 31,
                    1996 and 1995, respectively                                                  133               81
                  Interest receivable due from the Partnership                                 1,212            1,337
                  Current portion Expandable Wraparound
                    Mortgage due from the Partnership                                         12,000           10,000
                  Current portion of FF&E Promissory notes                                     2,791            1,819
                  Current portion of Expansion/Construction
                    promissory note                                                            2,329            2,026
                  Other, less allowance for uncollectible accounts
                    of $14,000 at December 31, 1996  and 1995                                    182              724
                                                                                            --------          -------
                                                                                            $ 19,744           16,808
                                                                                            ========          =======
         Long-Term Receivables

                  $127,000,000 Expandable Wraparound Mortgage 14%, maturities
                    through September 30, 2000 (net of $8,291,000 discount and
                    $9,815,000 discount at
                    December 31, 1996 and 1995, respectively)                               $ 52,709           63,185
                  Deferred interest receivable, due
                    September 30, 2000                                                        20,000           20,000
                  FF&E promissory notes, 14%                                                  17,244           16,527
                  Expansion/Construction promissory note, 14%                                  2,167            4,495
                                                                                            --------          -------
                                                                                            $ 92,120          104,207
                                                                                            ========          =======
</TABLE>

         The Expandable Wraparound Mortgage Loan Agreement ("Expandable
         Wraparound Mortgage") was executed and delivered by the Partnership to
         New Claridge and is secured by all property of the Partnership. As part
         of the agreement, New Claridge is obligated to make payments required
         under any senior mortgage indebtedness, so long as the Partnership is
         not in default on its obligations under the Expandable Wraparound
         Mortgage. $20 million in interest was deferred between 1983 and 1988
         and will be due upon maturity. Principal payments required under the
         Expandable Wraparound Mortgage commenced in 1988.



                                      F-13

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


4.       RECEIVABLES (cont'd.)

         The Expandable Wraparound Mortgage also includes a provision whereby
         New Claridge will loan the Partnership up to $25 million in the form of
         FF&E promissory notes ("FF&E Loans"), secured under the Expandable
         Wraparound Mortgage, for the purchase of property and equipment ("FF&E
         Replacements"). One half of the FF&E Loan principal is due in 48 months
         and the remaining balance is due 60 months from the date of issuance of
         the respective FF&E Loan. During the year ended December 31, 1997,
         $2,791,000 of principal payments will become due. In connection with
         the offering of $85 million of Notes on January 31, 1994, the
         Corporation agreed to use not less than $8 million from the net
         proceeds of the offering to finance certain 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.

         In 1986, the Expandable Wraparound Mortgage was increased up to $17
         million to provide the Partnership with funding for the construction of
         an expansion. Effective on the date that the expansion opened to the
         public (August 28, 1986), the Partnership commenced making level
         monthly payments of principal and interest so as to repay on September
         30, 1998, in full, the principal balance of this increase in the
         Expandable Wraparound Mortgage. The Expandable Wraparound Mortgage was
         amended to require, in addition to the above, principal payments (in
         equal monthly installments) due during the years 1988 through 1998 in
         escalating amounts totalling $80 million and on September 30, 2000 a
         balloon payment of $67 million which includes $20 million of deferred
         interest.

         Effective March 1, 1997, the Corporation, New Claridge, and the
         Partnership entered into a restructuring agreement pursuant to which
         New Claridge agreed to use its best efforts to cause a modification of
         the Expandable Wraparound Mortgage (the "Wraparound Modification") that
         is permitted by, or is in compliance with, the terms of the Indenture.
         The Wraparound Modification, if so permitted, will provide for an
         extension of the maturity date of the Expandable Wraparound Mortgage
         from September 30, 2000 to January 1, 2004. If the Wraparound
         Modification is not permitted by or in compliance with the terms of the
         Indenture, New Claridge has agreed to effect the Wraparound
         Modification at such time as the Notes are no longer outstanding.

                                      F-14

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)



5.       PROPERTY AND EQUIPMENT

         Property and equipment at December 31, 1996 and 1995 consist of the
         following:
<TABLE>
<CAPTION>

                                                                                  1996           1995
                                                                                  ----           ----
                                                                                    (in thousands)

<S>                                                                              <C>             <C>
                  Gaming equipment                                               $19,153         19,186
                  Land and land improvements                                       8,100          8,100
                  Self-parking garage facility                                    20,100            -0-
                  Construction in progress                                           -0-          8,204
                  Leasehold improvements                                             745            745
                  Capital lease asset                                                613            613
                  Other equipment                                                    107            -0-
                                                                                 -------        -------
                                                                                  48,818         36,848
                  Less accumulated depreciation and amortization                  13,630         12,380
                                                                                 -------        -------
                  Net property and equipment                                     $35,188         24,468
                                                                                 =======        =======
</TABLE>

         Building and construction in progress represent the costs incurred
         associated with the construction of New Claridge's self-parking garage
         facility, which initially opened on June 28, 1996. Interest costs
         related to the construction of the garage facility were capitalized,
         and are being amortized over the estimated useful life of the garage
         (39 years). Total interest capitalized as of the opening of the garage
         was $2,207,000; as of December 31, 1995, capitalized interest was
         $1,138,000.

6.       OTHER ASSETS

         The Casino Control Act (the "Act") provides for the imposition of an
         investment obligation, calculated at 1.25% of the total revenues from
         gaming operations, less the provision for uncollectible accounts. If a
         casino licensee opts not to make the investment as required, it is
         assessed an alternative tax of 2.5% of total gaming revenues less the
         provision for uncollectible accounts. The licensee can satisfy its
         obligation by making a direct investment in a project approved by the
         Casino Reinvestment Development Authority ("CRDA"), the agency
         responsible for administering this portion of the Act, or it can buy
         bonds issued by the CRDA. These bonds bear interest at two-thirds of
         market rates, as set forth in the Act.

         New Claridge has opted to deposit its reinvestment obligation funds
         with the State Treasurer. Through December 31, 1996, the Corporation
         has deposited $16,494,000 of which $2,532,000 has been used to
         purchase bonds issued by the CRDA. Since interest on these bonds and
         funds deposited is paid at a discounted rate, New Claridge records a
         valuation allowance of approximately one-third of the reinvestment
         obligation. In addition, in January 1990, it was determined that
         certain bonds issued by the CRDA had become impaired, and that the
         payment of principal and interest was uncertain. As a result, New
         Claridge has recorded a valuation

                                      F-15

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
                   Notes to Consolidated Financial Statements (Cont'd.)


6.       OTHER ASSETS (cont'd.)

         allowance for the full amount of its investment in these bonds,
         totalling $1,654,000.

         From time to time,  New  Claridge  has made  donations to the CRDA of
         funds which had previously  been deposited with the State  Treasurer.
         In exchange for these donations,  which have totaled  $11,974,000
         through December 31, 1996, New Claridge received credits towards
         future obligations or cash credits,  from the CRDA  equal to 51% of
         the  donations.  As of  December  31,  1996,  all of these credits
         had been used.

7.       LOAN FROM THE PARTNERSHIP

         In accordance with the terms of the Restructuring Agreement, on June
         16, 1989 the Partnership loaned to New Claridge $3.6 million, which
         represented substantially all cash and cash equivalents remaining in
         the Partnership other than funds needed to pay expenses incurred
         through the closing of the Restructuring. This loan is evidenced by an
         unsecured promissory note and is not due and payable until such time
         as the full or partial satisfaction of the Expandable Wraparound
         Mortgage and the First Mortgage has been made in connection with a
         refinancing or sale of all or a partial interest in the Claridge.

         Interest which accrues at 12% per annum is payable in full upon
         maturity. As of December 31, 1996, such interest, which is included in
         other current liabilities, amounted to $3,258,000.

8.       OTHER CURRENT LIABILITIES

          Other current liabilities at December 31, 1996 and 1995 consist of
          the following:

<TABLE>
<CAPTION>
                                                                      1996              1995
                                                                      ----              ----
                                                                         (in thousands)

<S>                                                                 <C>               <C>
         Deferred rent, current                                     $15,078           15,078
         Accrued payroll and related benefits                         6,187            7,279
         Accrued interest, Notes                                      4,161            4,161
         Auto/General insurance reserves                              1,228            1,037
         Accrued interest due to Partnership                          3,258            2,826
         Other current liabilities                                    2,518            2,559
                                                                     -------           -----

                                                                    $32,430           32,940
                                                                    =======           ======
</TABLE>

         Deferred rent of $15,078,000 represents the maximum deferral allowed
         in accordance with the Operating Lease Agreement and Expansion
         Operating Lease Agreement, as amended. 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.


                                      F-16

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


9.       LONG-TERM DEBT

         On January 31, 1994, the Corporation completed an offering of $85
         million of 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 will be subordinated to
         liens that may 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 Corporation's outstanding debt under 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.

         Beginning in 1995, and annually thereafter, the Corporation is
         required to make an offer ("Excess Cash Offer"), to all holders of
         Notes, to purchase at 100% of par (plus accrued and unpaid interest,
         if any, to the purchase date), the maximum amount of Notes that may be
         purchased with 50% of the Corporation's "Excess Cash" (as defined in
         the Indenture), from the preceding year. If less than $5 million is
         available to make such purchases (i.e., if Excess Cash is less than
         $10 million), no such offer needs to be made. The commencement date
         of any required Excess Cash Offer must be not later than 30 days after
         the publication of the Corporation's audited financial statements for
         the immediately preceding fiscal year. For the year ended December 31,
         1996, the Corporation's Excess Cash was less than $10 million, and
         therefore the Corporation is not required to make an Excess Cash Offer
         in 1997.

         The Indenture restricts the declaration or payment of dividends or
         distributions or redemptions of capital stock by the Corporation and
         its subsidiaries, other than (i) dividends or distributions payable in
         equity interests of the Corporation or such subsidiaries, (ii)
         dividends or distributions payable to the Corporation or any
         wholly-owned subsidiary, or (iii) dividends by a subsidiary on its
         common stock if such dividends are paid pro-rata to all holders of
         such common stock.

10.      OTHER NONCURRENT LIABILITIES

         Pursuant to the Restructuring Agreement, Webb retained an interest,
         which was assigned to 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

                                      F-17

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


10.      OTHER NONCURRENT LIABILITIES (cont'd.)

         in the accompanying consolidated financial statements since the
         likelihood of paying such amount is not considered probable at this
         time. As of December 31, 1996, accrued interest would have amounted to
         approximately $45.8 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 is included in other
         noncurrent liabilities on the Corporation's consolidated balance
         sheet. 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.
         As a result, if the option is exercised, any obligation to pay the
         accrued interest, as discussed above, would be eliminated, except in
         respect of the obligation to the Releasing Investors. The purchase
         price may also increase in an amount not to exceed $10 million if
         future distributions to Releasing Investors exceed $20 million.

         Given the recent operating results (see Note 2, "Recent Developments"),
         it is unlikely that the Corporation would be able to exercise this
         Contingent Payment option using available working capital, or absent a
         refinancing or sale transaction.

         In the event that the option is exercised, it is anticipated that the
         Contingent Payment would be cancelled so that neither the Corporation
         nor the Partnership would have any obligation to make any payment in
         respect of the Contingent Payment before making a distribution to
         shareholders or limited partners. Upon the purchase and cancellation,
         however, the Corporation and the Partnership would remain obligated to
         make payments to the Releasing Investors, in respect of the Contingent
         Payment Rights, before any distribution may be made to shareholders or
         limited partners. These payments would be required to be in the same
         amounts as if the Contingent Payment had not been purchased and
         cancelled. As a result, it is not likely that shareholders or limited
         partners who are not Releasing Investors will receive any distribution
         from the Corporation or the Partnership. In the aggregate, Releasing
         Investors are entitled to receive up to an amount equal to
         approximately 72% of the Contingent Payment, if the option is
         exercised.

         Under the terms of the option, upon purchase of the Contingent Payment,
         the Corporation and/or the Partnership would be required to make
         distributions in excess of $7 million to the Releasing Investors. The
         Corporation and the Partnership have agreed to cooperate in the

                                      F-18

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


10.      OTHER NONCURRENT LIABILITIES (cont'd.)

         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 would
         be contributed through additional abatements of basic rent payments
         due under the Operating Lease and Expansion Operating Lease.

11.      PROMOTIONAL ALLOWANCES

         The retail value of complimentary rooms, food and beverages and other
         complimentaries furnished to patrons is included in gross revenue and
         then deducted as promotional allowances. The estimated cost of
         providing such promotional allowances for the years ended December 31,
         1996, 1995 and 1994 has been allocated to casino expenses as follows
         (in thousands):
<TABLE>
<CAPTION>

                                                               1996                 1995              1994
                                                               ----                 ----              ----


<S>                                                           <C>                  <C>                <C>
                  Hotel                                      $  3,339                2,944              2,570
                  Food and beverage                            12,001                9,655              9,864
                  Entertainment                                 1,725                  784                737
                                                             --------               ------              -----

                       Total                                  $17,065               13,383             13,171
                                                              =======               ======             ======

</TABLE>

12.      INCOME TAXES

         Income taxes are accounted for under the asset and liability method.
         Deferred tax assets and liabilities are recognized for the estimated
         future tax consequences attributable to temporary differences between
         the financial statement carrying amounts of existing assets and
         liabilities and their respective tax basis.

         The benefit for income taxes is comprised of the following (in
         thousands):
<TABLE>
<CAPTION>

                                                              1996                  1995              1994
                                                              ----                  ----              ----
<S>                                                           <C>                   <C>               <C>
         Current:
           Federal                                           $     -0-              (285)            (4,175)
           State                                                   -0-               -0-                -0-
         Deferred                                              (5,398)               (85)             1,782
                                                             ---------              -----             ------

                                                              $(5,398)              (370)            (2,393)
                                                              =======               ====              ======
</TABLE>



                                      F-19

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


12.      INCOME TAXES (cont'd.)

         The benefit for income taxes differs from the amount computed at the
         statutory rate as follows (in thousands):
<TABLE>
<CAPTION>
                                                                       1996                 1995               1994
                                                                       ----                 ----               ----

<S>                                                                 <C>                     <C>              <C>
         Computed "expected" tax benefit                            $(7,068)                (775)            (3,160)
         Increase (reduction) in income taxes
           resulting from:
           Change in the valuation allowance                          2,460                  -0-                422
           State income tax, net of federal
             income tax benefit                                      (1,247)                (137)              (558)
           Meals and entertainment                                      550                  550                579
           Other                                                        (93)                  (8)               324
                                                                    --------                -----             ------

                                                                    $(5,398)                (370)            (2,393)
                                                                    ========                =====            =======
</TABLE>

         The tax effects of temporary differences that give rise to significant
         portions of the deferred tax assets and deferred tax liabilities at
         December 31, 1996 and 1995 are presented below (in thousands):
<TABLE>
<CAPTION>

                                                                                            1996               1995
                                                                                            ----               ----
<S>                                                                                        <C>                <C>
         Deferred tax assets:
           Net operating loss                                                            $ 9,525              1,444
           Rent leveling                                                                  11,980             13,074
           Accrued expenses                                                                1,413              1,573
           Tax credit                                                                        940                940
           Other                                                                           1,323                517
                                                                                           -----             ------
                  Total gross deferred tax assets                                         25,181             17,548
                  Less valuation allowance                                                (2,882)              (422)
                                                                                          ------             -------
                  Net deferred tax assets                                                 22,299             17,126
                                                                                          ======             ======
         Deferred tax liabilities:
           Gaming equipment, due to differences in
             depreciation                                                                 (1,178)            (1,175)
           Difference between book and tax basis of
             Expandable Wraparound Mortgage receivable                                   (22,832)           (21,320)
           Difference between book and tax basis of
             receivables                                                                    (868)            (1,740)
           Other                                                                              (2)               (14)
                                                                                         --------           --------
                  Total gross deferred tax liabilities                                   (24,880)           (24,249)
                                                                                         --------           --------

                  Net deferred tax liability                                            $ (2,581)            (7,123)
                                                                                        =========            =======
</TABLE>

         The valuation allowance for deferred tax assets as of December 31,
         1995 was $422,000. The net change in the total valuation allowance
         for the year ended December 31, 1996 was an increase of $2,460,000.

                                      F-20

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


12.      INCOME TAXES (cont'd.)

         The Corporation recorded an income tax benefit of $5,398,000, $370,000
         and $2,393,000 for the years ended December 31, 1996, 1995 and 1994,
         respectively, which represents the tax benefit expected from the
         carryforward of Federal net operating losses net of increased deferred
         tax credits.

         At December 31, 1996, the Corporation had net operating loss
         carryforwards for federal income tax purposes of $21,700,000, which
         are available to offset future federal taxable income, if any, through
         2007. The Corporation also has tax credit carryforwards for income tax
         purposes of approximately $940,000, which are available to reduce
         future federal income taxes, if any, through 2002.

         The principal items comprising the deferred tax provision in 1996
         included rent leveling tax benefit of ($1,100,000), Expandable
         Wraparound Mortgage discount tax expense of $1,500,000, net operating
         loss carry forward tax benefit of ($7,100,000), and an increase in the
         valuation allowance of $2,460,000.

         The principal items comprising the deferred tax provision in 1995
         included rent leveling tax benefit of ($350,000), Expandable
         Wraparound Mortgage discount expense of $1,300,000, depreciation
         expense of $270,000 and net operating loss carry forward tax benefit
         of ($360,000).

         The principal items comprising the deferred tax provision in 1994
         included rent leveling of $1,280,000, Expandable Wraparound Mortgage
         discount expense of $460,000, bad debt expense of ($80,000) and
         depreciation expense of $200,000.

         As a result of the restructuring in 1989, the amount of debt forgiven
         resulted in the loss or reduction of various tax attributes including
         tax operating loss carry forwards of $30,400,000, unused tax credits
         of $1,041,000 and reduction in tax basis of assets by $89,178,000. As
         a result of the reduction in tax basis of assets, cash payments for
         income taxes will significantly exceed income tax expense for
         financial statement purposes in future years. The above amounts have
         been adjusted to reflect settlements of the Internal Revenue Service
         ("IRS") audits of the years 1983 through 1987. During 1995 the
         Corporation received notice from the 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 is a remaining
         IRS asserted deficiency for the 1990 and 1991 taxable years. In
         October 1996, the IRS sent the Corporation a statutory notice of
         deficiency for the Corporation's 1990 and 1991 taxable years. On
         January 23, 1997, the Corporation filed a petition with the United
         States Tax Court requesting a redetermination of the asserted
         deficiency. The Corporation believes the ultimate resolution of the
         case will not result in a material impact on the Corporation's
         consolidated financial statements.



                                      F-21

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


13.      OPERATING LEASE

         New Claridge leases the Hotel Assets and the land on which the
         Claridge is located from the Partnership under an Operating Lease for
         an initial lease term of 15 years with three 10-year renewal options.
         Basic rent during the renewal term will be calculated pursuant to a
         formula, with such rent not to be more than $29,500,000 nor less than
         $24,000,000 for the lease year commencing October 1, 1998 through
         September 30, 1999 and, subsequently, not to be greater than 10% more
         than the basic rent for the immediately preceding lease year in each
         lease year thereafter. New Claridge is also required to pay as
         additional rent amounts including certain taxes, insurance and other
         charges relating to the occupancy of the land and Hotel Assets,
         certain expenses and debt service relating to furniture, fixture and
         equipment replacements and building improvements, and the general and
         administrative costs of the Partnership.

         Minimum future basic lease payments under the initial term of the
         Operating Lease, as amended, as of December 31, 1996 (net of expected
         abatements, as discussed below) are as follows (in thousands):

                  1997                                            $  39,725
                  1998 (through September 30, 1998)                  32,531
                                                                  ---------

                  Total Minimum                                    $ 72,256
                                                                   ========

         Also, additional rent payments are required based upon fixed assets
         purchased by the Partnership (the FF&E Replacements, Note 4) and then
         leased to New Claridge.

         New Claridge entered into an Expansion Operating Lease Agreement with
         the Partnership whereby New Claridge leased the expansion facility for
         an initial term beginning March 17, 1986 and ending on September 30,
         1998 with three 10-year renewal options. Basic annual rent payable
         during the initial term of the Expansion Operating Lease was
         $3,870,000 in 1986 (prorated based on the day that the Expansion
         Improvements opened to the public) and determined based on the cost
         of the construction of the Expansion Improvements. Annually thereafter
         the rental amount is adjusted based on the Consumer Price Index but
         any increase may not exceed two percent per annum. Basic annual rent
         for 1996, 1995 and 1994 amounted to $4,718,000, $4,625,000, and
         $4,534,000, respectively. Basic annual rent during the renewal term
         will be calculated pursuant to a formula, with such rent not to be
         more than $3,000,000 nor less than $2,500,000 and not to be greater
         than 10% more than the basic annual rent for the immediately preceding
         lease year in each lease year thereafter.

         New Claridge is also required to pay as additional rent certain
         expenses and the debt service relating to Furniture, Fixture and
         Equipment Replacements and building improvements (collectively
         "Expansion FF&E Replacements") for the expanded facility. The
         Partnership will be required during the entire term of the Expansion
         Operating Lease, and any subsequent renewal terms, to provide New
         Claridge with Expansion FF&E Replacements and to provide facility
         maintenance and engineering services to New Claridge. New Claridge is
         obligated to lend the Partnership any amounts necessary to fund the
         cost of Expansion FF&E Replacements.

                                      F-22

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


13.      OPERATING LEASE (cont'd.)

         Any advances by New Claridge for the foregoing will be secured under
         the Expandable Wraparound Mortgage, in an amount up to $25,000,000.
         Thereafter, such advances will be secured under separate security
         agreements.

         For the years ended December 31, 1996, 1995 and 1994, total expense
         resulting from the Operating Lease and Expansion Operating Lease
         amounted to $38,561,000, $37,638,000, and $36,219,000, respectively,
         of which ($2,737,000), ($2,386,000), and ($3,209,000), respectively,
         of rental expense is attributable to the requirement under Statement
         of Financial Accounting Standards No. 13 to provide a level rent
         expense for those leases with escalating payments.

         Effective with the consummation of the restructuring in June 1989, the
         Operating Lease Agreement and the Expansion Operating Lease Agreement
         were amended to provide for the deferral of $15,078,000 of rental
         payments during the period July 1, 1988 through the beginning of 1992,
         and to provide for the abatement of $38.8 million of basic rent
         payable through 1998, thereby reducing the Partnership's cash flow to
         an amount estimated to be necessary to meet the Partnership's cash
         requirements. During the third quarter of 1991, the Corporation had
         accrued the maximum amount of $15.1 million of deferred rent liability
         under the lease arrangements. On August 1, 1991, the Operating Lease
         Agreement and Expansion Operating Lease Agreement were further amended
         to revise the abatement provisions so that, commencing January 1, 1991,
         for each calendar year through 1998, the lease abatements may not
         exceed $10 million in any one calendar year, and $38,820,000 in the
         aggregate. As of December 31, 1996, $37.3 million of basic rent had
         been abated. The remaining $1.5 million of available abatements were
         fully utilized in the first quarter of 1997. Additional abatements of
         rent totalling $500,000, which became available as a result of the
         acquisition of the option to purchase the Contingent Payment, were
         also utilized in the first quarter of 1997. Further abatements would
         become available in the event that the Contingent Payment option is
         exercised (see Note 10, "Other Noncurrent Liabilities"). Effective
         with the closing of the Restructuring on June 16, 1989, lease expense
         recognized on a level basis is reduced prospectively, from the use of
         a revised schedule of rent leveling relative to the abatement of
         certain rents beginning in 1992.

         The Fifth Amendment to the Operating Lease and the Fourth Amendment to
         the Expansion Operating Lease, which were effective on March 1, 1997,
         provided for the abatement of $867,953 of basic rent and for the
         deferral of $1,300,000 of basic rent on March 1, 1997, and provide for
         additional abatements of basic rent, commencing on April 1, 1997, as
         necessary to reduce the Partnership's cash flow to an amount necessary
         only to meet the Partnership's cash requirements through December 31,
         1998. The $1.3 million of basic rent deferred on March 1, 1997 is to
         be paid to the Partnership in monthly installments of $25,000 for the
         period April 1, 1997 through December 31, 1997, and monthly
         installments of $50,000 for the year 1998 and thereafter until paid in
         full. For the years 1999 through 2003, additional abatements of basic
         rent will be reduced to provide the Partnership with amounts needed to
         meet the Partnership's cash requirements plus an additional amount
         ($83,333 per month in 1999 and 2000, $125,000 per month in 2001, and
         $166,667 per month in 2002 and 2003).


                                      F-23

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


13.      OPERATING LEASE (cont'd.)

         In conjunction with the Fifth Amendment to the Operating Lease and the
         Fourth Amendment to the Expansion Operating Lease, as discussed above,
         the Corporation, New Claridge and the Partnership entered into a
         restructuring agreement, effective March 1, 1997, to modify certain
         terms of the Expandable Wraparound Mortgage (see Note 4,
         "Receivables"). In addition, under the March 1, 1997 restructuring
         agreement, New Claridge agreed to exercise the first of three ten-year
         renewal options extending the term of the Operating Lease and
         Expansion Operating Lease through September 30, 2008.

         Under the terms of the Operating Lease, as amended effective March 1,
         1997, New Claridge has an option to purchase, on September 30, 1998,
         the Hotel Assets and the underlying land for their fair market value
         at the time the option is exercised, which in no event may be less
         than an amount equal to the amount then outstanding under the
         Expandable Wraparound Mortgage plus $2.5 million, plus any amount of
         the $1.3 million of rent deferred on March 1, 1997 not then paid. If
         New Claridge does not exercise this option on September 30, 1998, it
         may exercise an option, on September 30, 2003, to purchase the Hotel
         Assets and the underlying land on January 1, 2004, for their fair
         market value at the time the option is exercised.

         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 also leases supplemental office, warehouse, and surface
         parking spaces in nearby lots. For the years ended December 31, 1996,
         1995, and 1994, operating lease expense for these facilities amounted
         to $1,484,000, $1,512,000, and $1,531,000, respectively. The minimum
         future lease payments due under these leases total $755,000 in 1997,
         $735,000 in 1998, $736,000 in 1999, $612,000 in 2000, and $600,000 in
         2001.

         On March 8, 1991, New Claridge entered into an operating lease
         agreement to lease certain computer equipment. For the year ended
         December 31, 1994 operating lease expense for the computer equipment
         amounted to $77,000. New Claridge had an option to acquire the
         equipment at the end of the lease term at the then fair market value
         of the equipment. This option was exercised on February 28, 1994.

14.      FAIR VALUE OF FINANCIAL INSTRUMENTS

         Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"),
         "Disclosures about Fair Value of Financial Instruments" requires the
         Corporation to disclose estimated fair value for its financial
         instruments. The estimates of fair value are subjective in nature and
         involve uncertainties and matters of significant judgement, and
         therefore cannot be determined with precision; changes in these
         assumptions could significantly affect the estimates.


                                      F-24

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


14.      FAIR VALUE OF FINANCIAL INSTRUMENTS (cont'd.)

         The carrying amounts and estimated fair values of the Corporation's
         financial instruments as of December 31, 1996 and 1995 are as follows
         (in thousands):
<TABLE>
<CAPTION>

                                                                             1996                       1995
                                                                      ------------------         -----------------

                                                                       Carrying     Fair          Carrying   Fair
                                                                        Amount      Value          Amount    Value
                                                                       --------     -----         --------   -----

<S>                                                                    <C>          <C>            <C>       <C>
         Financial Assets:
           Cash and cash equivalents                                     $ 8,532     8,532          35,747    35,747
           Long-term receivables
             due from the Partnership (including
             current portion)                                            109,240     n/a           118,052     n/a
           Reinvestment obligation funds                                   2,263     2,263           1,479     1,479

         Financial Liabilities:
           Loan from the Partnership                                       3,600     n/a             3,600     n/a
           Long term debt                                                 85,000    68,000          85,000    71,613
           Deferred rent due to the Partnership                           28,010     n/a            30,747     n/a
           Contingent payment                                             20,000     n/a            20,000     n/a
</TABLE>

         The following assumptions were used to estimate the fair value of each
         class of financial instruments:

         Cash and cash equivalents

         The carrying amounts reflected on the Corporation's Consolidated
         Balance Sheet approximate the fair value because of the short maturity
         (90 days or less) of these instruments.

         Reinvestment obligation funds

         The reinvestment obligation funds, which are included in Other assets
         on the Corporation's Consolidated Balance Sheet, consist of required
         investments imposed by the Casino Control Act. The reinvestment
         obligation funds are stated net of a valuation allowance reflecting
         the below market interest rates associated with the investments. As a
         result, the carrying values of these investments approximate their
         fair values.

         Long-term debt

         The fair value of the Corporation's long-term debt is estimated based
         on the quoted market price of the Notes as of December 31, 1996 and
         1995, respectively.




                                      F-25

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


14.      FAIR VALUE OF FINANCIAL INSTRUMENTS (cont'd.)

         Long-term receivables due from Partnership, Loan from the Partnership,
         Deferred rent due to the Partnership

         Due to the nature of the relationship between the Corporation and the
         Partnership, estimation of the fair value of the financial instruments
         due to and due from the Partnership is not practical as there is no
         trading market for these financial instruments. (See Note 4,
         "Receivables", Note 7, "Loan from the Partnership" and Note 13,
         "Operating Lease", for a description of the terms of these
         instruments.)

         Contingent Payment

         There is no market for the Contingent Payment; therefore, estimation
         of the fair value of the Contingent Payment is not practical. (See
         Note 10, "Other Noncurrent Liabilities" for a description of the
         Contingent Payment and the option to purchase the Contingent Payment.)

15.      CONTINGENCIES

         a)       Licensing

                  On September 22, 1995, New Claridge was issued a four-year
                  casino license by the Commission for the period commencing
                  September 30, 1995.

         b)       Legal Proceedings

                  On July 10, 1996, ten days after its opening, a fatal
                  accident occurred at New Claridge's self-parking garage, in
                  which the vehicle of two patrons breached a cable restraint
                  system, permitting their vehicle to drive through the side
                  wall of the self-parking garage. The vehicle fell four
                  stories to the sidewalk and street below, killing both
                  occupants. As a result, New Claridge's self-parking garage
                  was closed until the end of September 1996, while various
                  investigations sought to determine the cause of the accident.
                  At the same time, New Claridge determined to remove the
                  exterior wall cable restraint system and replace it with a
                  rigid I-beam barrier system.

                  New Claridge has retained the law firm of Zelle and Larson
                  LLP of Minneapolis, Minnesota to assist in evaluating the
                  recovery of certain expenses incurred in reopening the self-
                  parking garage and in evaluating potential lost profit claims.
                  Management of the Corporation intends to file a claim to
                  recover these expenses and lost profits; recovery of these
                  claims would have a positive impact on New Claridge's
                  financial results and liquidity. No formal claims have been
                  filed to date, and there is no assurance that the Corporation
                  will be successful in realizing any recovery.

                  The Corporation and New Claridge are also defendants in
                  various legal proceedings arising in the normal course of
                  business. In the opinion of management, it is not

                                      F-26

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


15.      CONTINGENCIES (cont'd.)

                 reasonably likely that any such matters individually or
                 collectively would result in an outcome having a material
                 adverse effect on the consolidated financial statements.

16.      RELATED PARTY TRANSACTIONS

         a.      The Restructuring Agreement provided for Webb to retain an
                 interest, which was assigned to the United Way of Arizona 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 in the sale or refinancing of the Claridge facility in
                 excess of the first mortgage loan.  Webb was also entitled to
                 retain a seat on the Board of Directors of the Corporation and
                 New Claridge (a right it subsequently relinquished). Effective
                 with the closing of the Restructuring on June 16, 1989, all or
                 substantially all of the financial, contractual, ownership,
                 guarantee and other relationships of the Corporation and New
                 Claridge with Webb were terminated.

         b.      The Partnership has a direct material interest in the
                 Expandable Wraparound Mortgage Loan Agreement, the Operating
                 Lease and the Expansion Operating Lease together with the
                 amendments thereto as described in the preceding notes. The
                 ownership interests in the Partnership which have a
                 relationship to the Corporation are currently as follows:

                 -   Approximately 95% of the Corporation's common stock is
                     owned by persons who also own over 90% of the limited
                     partnership interests in the Partnership; and

                 -   Special Limited Partners (Oppenheimer Holdings, Inc. and
                     certain officers and employees of Oppenheimer & Co., Inc.)
                     represent approximately 1% interest in the Partnership and
                     prior to March 24, 1989 owned the remaining 562,500 shares
                     of Class A Stock. On March 24, 1989, Oppenheimer Holdings,
                     Inc. returned to the Corporation all of its shares
                     (273,938) of the Corporation's Class A Stock.

         c.      In February 1992, the Corporation's Board of Directors adopted
                 a Long-Term Incentive Plan (the "Plan") in which certain key
                 employees of the Corporation and/or New Claridge participate.
                 The Plan provides  for the  grant of the 273,938 shares of the
                 Corporation's Class A stock, which were held as treasury
                 shares of the Corporation, and for the issuance of 100 Equity
                 Units.  The aggregate value of the 100 Equity Units is
                 equal to 5.41 percent of certain amounts as further defined in
                 the Plan.  Specified portions of the awarded treasury shares
                 and Equity Units held by participants vest upon the
                 attainment of specific goals as described in the Plan.  The
                 treasury shares and Equity Units fully vest upon a further
                 restructuring or  a change  in control as defined in the Plan.
                 Payment  with  respect  to  the Equity Units will only be made
                 (a) upon the occurrence of a transaction in which substantially
                 all of the assets and and business operations of the Claridge
                 entities are transferred to one or more entities in a merger,



                                      F-27

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


16.      RELATED PARTY TRANSACTIONS (cont'd.)

                  sale of assets or other acquisition-type transaction, (b)upon
                  termination of employment of any participant in the Plan
                  within one year after any change in control of the
                  Corporation occurs, as defined in the Plan, or (c) if the
                  Corporation pays dividends to its stockholders, if the
                  Partnership makes distributions to its partners, or if the
                  Corporation or the Partnership makes certain distributions
                  under the Restructuring Agreement. On April 15, 1992, the
                  Commission approved the Plan and the treasury shares were
                  delivered to the participants. Upon the issuance of the Notes
                  and the repayment in full of the Corporation's outstanding
                  debt under the Loan Agreement, 25% of the shares and Equity
                  Units awarded under the Plan vested. A participant is
                  entitled to vote all awarded treasury shares whether or not
                  vested in such shares.

                  On June 5, 1995, the Corporation's Board of Directors amended
                  the Plan by creating 100 Additional Equity Units to be issued
                  to certain key employees and 100 Director Equity Units to be
                  issued to the individual members of the Board of Directors
                  (the "Directors"). The aggregate value of the Additional
                  Equity Units is 5.59 percent and the aggregate value of the
                  Director Equity Units is 4 percent of certain amounts as
                  further defined in the Plan. Vesting of the Additional Equity
                  Units occurs if a Transaction results in the Claimholders of
                  the Claridge receiving cash or marketable securities having a
                  certain value all as further defined and described in the
                  Plan. Vesting of the Director Equity Units occurs according
                  to a vesting schedule stated in the Plan and also is tied to
                  the occurrence of a Transaction having a certain value.

17.      PARENT COMPANY INFORMATION

         The Corporation owns all of the outstanding common stock of New
         Claridge, which it purchased for $5,000,000. The balance sheet
         accounts of the Corporation as of December 31, 1996 and 1995 include
         the following:
<TABLE>
<CAPTION>
                                                                                            1996               1995
                                                                                            ----               ----
                                                                                                  (in thousands)

<S>                                                                                         <C>                <C>
         Cash                                                                          $      -0-                -0-
         Investment in New Claridge                                                       87,206             87,206
         Other assets                                                                     10,404              8,217
                                                                                      ----------             -------

                  Total assets                                                         $  97,610             95,423
                                                                                       =========             ======

         Long-term debt                                                                $  85,000             85,000
         Other liabilities                                                                10,871              9,729
         Stockholders' equity                                                              1,739                694
                                                                                        --------             ------

                  Total liabilities and  stockholders' equity                          $  97,610             95,423
                                                                                       =========             ======
</TABLE>



                                      F-28

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


17.      PARENT COMPANY INFORMATION (cont'd.)

         For the years ended December 31, 1996 and 1995, the Corporation
         recorded income of $9,987,500 and $15,009,000, respectively,
         representing dividends received from New Claridge to fund the payment
         of interest on the Notes; this income is eliminated in the
         consolidation with the financial statements of New Claridge. No income
         was recorded for the year ended December 31, 1994. The Corporation's
         expenses for the years ended December 31, 1996, 1995 and 1994 amounted
         to $8,943,000, $6,225,000, and $7,518,000, respectively, including
         income tax benefit of $1,868,000, $4,235,000, and $3,908,000,
         respectively. These amounts represent the results of operations of the
         Corporation for the respective periods before equity in the results of
         New Claridge. For the year ended December 31, 1996, New Claridge had a
         net loss of $6,446,000, as compared to net income of $4,317,000 and
         $617,000 for the years ended December 31, 1995 and 1994, respectively.

         Changes in the Corporation's financial position for the years ended
         December 31, 1996, 1995 and 1994 were as follows (in thousands):
<TABLE>
<CAPTION>

                                                                     1996                 1995               1994
                                                                     ----                 ----               ----
<S>                                                                <C>                  <C>               <C>
         Cash flows from operating activities:
              Net income (loss)                                     $ 1,045                8,784             (7,518)
              Adjustments to reconcile net income
                (loss) to net  cash provided by (used in)
                operating activities:
                  Amortization                                          496                  468                428
                  Change in assets and liabilities:
                     Other assets                                    (2,683)              (1,466)            (3,849)
                     Other liabilities                                1,142               (7,788)            11,487
                                                                    -------               -------            ------
         Net cash flows provided by (used in)
          operating activities                                          -0-                   (2)               548
                                                                    -------               -------            -------

         Cash flows from financing activities:
              Proceeds from issuance of long-term debt                  -0-                  -0-             85,000
              Increase in deferred charges related to
                issuance of long term debt                              -0-                  -0-             (3,340)
              Equity contribution to New Claridge                       -0-                  -0-            (82,206)
                                                                   --------               -------           --------
         Net cash flows used in financing activities                    -0-                   (2)              (546)
                                                                   --------               -------           --------

         Increase (decrease) in cash and cash equivalents               -0-                   (2)                 2

         Cash and cash equivalents at beginning of period               -0-                    2                -0-
                                                                   --------               -------           --------

         Cash and cash equivalents at end of period                $    -0-                  -0-                  2
                                                                   ========               ========          ========

         Supplemental cash flow disclosures:
           Interest paid, net of amounts capitalized              $   8,918                8,850              5,021
                                                                   ========               ========          ========
           Income taxes paid                                      $     -0-                  -0-                -0-
                                                                  =========               ========          ========

</TABLE>

                                      F-29

<PAGE>


                    THE CLARIDGE HOTEL AND CASINO CORPORATION
              Notes to Consolidated Financial Statements (Cont'd.)


18.      SUBSEQUENT EVENTS

         Effective March 1, 1997, the Corporation, New Claridge, and the
         Partnership entered into a restructuring agreement to modify certain
         terms of the Expandable Wraparound Mortgage (see Note 4,
         "Receivables"). In addition, New Claridge agreed to exercise the first
         of three ten-year renewal options extending the term of the Operating
         Lease and Expansion Operating Lease through September 30, 2008 (see
         Note 13, "Operating Lease"). In conjunction with the March 1, 1997
         restructuring agreement, the Operating Lease and Expansion Operating
         Lease were also amended (see Note 13, "Operating Lease").

                                      F-30

<PAGE>




                                   SCHEDULE II





           THE CLARIDGE HOTEL AND CASINO CORPORATION AND SUBSIDIARIES
                        Valuation and Qualifying Accounts
                  Years Ended December 31, 1996, 1995 and 1994
                                 (in thousands)


<TABLE>
<CAPTION>
<S>                              <C>                <C>                    <C>                 <C>                    <C>

                                  Balance           Charged to             Charged to                                 Balance
                                 Beginning          Costs and                 Other                                  at End of
Description                      of Period           Expenses               Accounts            Deductions             Period
-----------                      ---------          ---------              ---------            ----------           ---------


Year ended
December 31, 1996
-----------------

Allowance for
Uncollectible Accounts             $  987              238                    -0-                  326 (a)                899

Year ended
December 31, 1995
-----------------

Allowance for
Uncollectible Accounts             $1,445             (160)                   -0-                  298 (a)                987

Year ended
December 31, 1994
-----------------

Allowance for
Uncollectible Accounts             $1,282              492                    -0-                  329 (a)              1,445



</TABLE>





(a)   Accounts written-off.



                                      F-31

<PAGE>



                                INDEX TO EXHIBITS


    Exhibit
    -------

    EX10(bj)  Amended Employment Agreement between Robert M. Renneisen and The
              Claridge at Park Place, Incorporated effective January 1, 1997.

    EX10(bk)  Amended Employment Agreement between Albert T. Britton and The
              Claridge at Park Place, Incorporated effective January 1, 1997.

    EX10(bl)  Amended Employment Agreement between Raymond A. Spera and The
              Claridge at Park Place, Incorporated effective January 1, 1997.

    EX10(bm)  Amended Employment Agreement between Jean I. Abbott and The
              Claridge at Park Place, Incorporated effective November 1, 1996.

    EX10(bn)  Employment Agreement between Frank A. Bellis, Jr. and The
              Claridge at Park Place, Incorporated effective November 1, 1996.

    EX10(bo)  Employment Agreement between Glenn Lillie and The Claridge at
              Park Place, Incorporated effective February 1, 1997.

    EX10(bp)  Spreader Agreement of a Certain Mortgage, Assignment of Leases
              and Rents, Security Agreement and Financing Statement by The
              Claridge at Park Place, Incorporated in favor of IBJ Schroder
              Bank & Trust Company, as Collateral Trustee, dated January 28,
              1997.

    EX10(bq)  Spreader Agreement and Modification of Spreader Agreement of a
              Certain Mortgage, Assignment of Leases and Rents, Security
              Agreement and Financing Statement by The Claridge at Park Place,
              Incorporated in favor of IBJ Schroder Bank & Trust Company,
              as Collateral Trustee, dated February 18, 1997.

    EX10(br)  Fifth Amendment to Operating Lease Agreement and Fourth Amendment
              to Expansion Operating Lease Agreement between The Claridge at
              Park Place, Incorporated and Atlantic City Boardwalk Associates,
              L.P. effective March 1, 1997.

    EX10(bs)  Restructuring Agreement between The Claridge Hotel and Casino
              Corporation, The Claridge at Park Place, Incorporated, and
              Atlantic City Boardwalk Associates, L.P. effective March 1, 1997.

    EX12(b)   Statement of Computation of Ratio of Earnings to Fixed Charges.


<PAGE>




                                 EXHIBIT 10(bj)

                              EMPLOYMENT AGREEMENT

        THIS AGREEMENT is effective as of January 1, 1997 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Robert M. Renneisen, an
individual residing at 802 Blue Teal Drive, Absecon, New Jersey, 08201
("Executive").

                               W I T N E S S E T H

        WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:

        1.   EMPLOYMENT. The Claridge hereby employs the Executive as its Vice
Chairman/Chief Executive Officer. In this capacity, the Executive shall perform
such executive duties as are typical for this position including but not
limited to, those duties outlined in the Claridge's internal controls, and such
additional duties as may be specified from time to time by the Board of
Directors. In addition, the Executive may be asked to serve as a member of the
Claridge's Board of Directors without additional compensation for these
services.

        2.   TERM.  The term of this Agreement shall commence on the Effective
Date and terminate on December 31, 1998 ("Initial Term") subject to paragraphs
5 or 7.  Thereafter, the Board may review and extend the Agreement for
consecutive one (1) year renewal terms upon specific action by the Board.

        3.   COMPENSATION.  (a) The Claridge shall pay the Executive a base
annual salary of Three Hundred Thirty Thousand Dollars ($330,000), payable in
weekly installments consistent with the Claridge's regular payroll practice.
The Board of Directors may, from time to time, in their sole discretion,
increase the base annual salary.

        (b) Until termination of the Agreement, the Executive shall continue to
receive full compensation and be entitled to all the benefits of this Agreement.
Upon termination, the Executive shall not be entitled to receive any
compensation or benefits except as set forth in this Agreement or as otherwise
agreed in writing between the parties.

        (c) The Executive shall be entitled to vacation time consistent with
the Claridge's vacation plan, and shall also be entitled to participate in any
bonus plan, incentive compensation plan, qualified pension plan, qualified
profit-sharing plan, medical and/or dental reimbursement plan, group term life
insurance plan, as well as any other employee benefit plan that may be
established by the Claridge or its operating subsidiaries. The participation in
any of these plans shall be consistent with the terms of such plans, and be
available only upon the Claridge or its operating subsidiaries having or
establishing such a plan.

        4.   CASINO CONTROL COMMISSION.  The Executive represents that he
possesses a casino key employee license required by the New Jersey Casino
Control Commission.  The Executive will maintain this license in good
standing during his employment with the Claridge.  The Claridge will
pay all attorneys' fees and other costs that the Executive may incur:
(a) in connection with any  investigation or proceeding

<PAGE>



against the Executive; or, (b) in which the Executive may be involved (other
than with respect to any act defined as "cause" for termination as noted in
5(a)(ii); or, (c) relating to any criminal charges filed against the Executive,
by the Division of Gaming Enforcement of the New Jersey Attorney General's
Office or by the New Jersey Casino Control Commission.

        5.     TERMINATION.  (a)  Notwithstanding anything to the contrary in
this Agreement, the Executive's employment may be terminated upon the
occurrence of any of the following events:

                  (i)    Upon revocation, suspension, or termination of the
                         Executive's casino key employee license or failure to
                         comply, within a reasonable time, with any conditions
                         imposed upon the Executive's casino key employee
                         license;

                  (ii)   Upon an act committed by the Executive constituting
                         "cause", defined as a breach of any of the provisions
                         of this Agreement; the indictment and/or conviction
                         of any criminal offense; the deliberate refusal by
                         the Executive (except by reason of disability) to
                         perform the duties under the terms of this Agreement;
                         or if the Executive:

                         (1)   Files a petition in bankruptcy court or is
                               adjudicated a bankrupt;

                         (2)   Institutes or permits to be instituted any
                               procedure in bankruptcy court for reorganization
                               or rearrangement of the Executive's financial
                               affairs;

                         (3)   Appoints a receiver of the Executive's assets or
                               property due to insolvency; or

                         (4)   Makes a general assignment for the benefit of
                               creditors;

                  (iii) Upon the death or permanent disability of the Executive;

                  (iv)  Upon written notice by the Claridge terminating the
                        Executive's employment without cause;

                  (v)   Upon the voluntary resignation by the Executive;

                  (vi)  In the event at the time of hire the Executive is a
                        non-New Jersey resident and the Executive fails to
                        establish residency in New Jersey within six (6)
                        months after a Board Resolution directing the
                        Executive to do so. Provided that no such resolution
                        shall be adopted so long as: (i) a sale of the
                        Claridge is an option being considered by the Board
                        of Directors; or, (ii) the Claridge's audited
                        financial statements are expected to contain a "going
                        concern" qualification in the Independent Auditor's
                        Report.

        (b) If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above; 5(f) (diminished
responsibilities) below; paragraph 7 (sale of the Claridge);or, if the Claridge
elects not to renew this Agreement pursuant to paragraph 2 above, then the
Claridge shall make a lump sum payment to the Executive equal to one hundred
and twenty-five percent (125%) of the Executive's base annual salary then in
effect. Upon making of such payment, the Claridge shall have no further
liability or obligation to the Executive under this Agreement.

        (c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive
gives notice of the intent to resign at least twelve (12) weeks prior to
terminating employment, then the Claridge shall continue to pay
the Executive weekly compensation for a period of twelve (12) weeeks


<PAGE>



after the resignation date. Upon expiration of this additional twelve (12)
week period, the Claridge shall have no further liability or obligation to
the Executive under this Agreement. If notice of the intent to resign to the
Claridge is given less than twelve weeks before the resignation date,
the Claridge shall have no obligation to pay the Executive beyond the
resignation date.

        (d) Upon termination of this Agreement under subparagraph 5(a)(iv)
(termination without cause), if the Claridge has an existing stock option plan,
the Executive shall receive stock options in the Claridge, if any, in an amount
equal to those that could be exercised within one (1) year from the date of
termination. Provided, however, that such stock options must be exercised by
the Executive within 90 days after termination, or the options shall expire.

        (e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation
to continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the
Claridge.

        (f) If the Executive's title, responsibilities, duties or status within
the Claridge should materially diminish, the Executive may resign and terminate
this Agreement. In this case, the Executive shall be entitled to a lump sum
payment consistent with subparagraph 5(b). Such a resignation will not be
considered a "voluntary resignation" under subparagraph 5(a)(v).

        6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term of this
Agreement, the Executive shall not, without the written consent of the Claridge
, alone or with others, directly or indirectly, participate, engage or become
interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted .

        (b) Nothing in this Agreement shall prohibit the Executive from
acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.

        (c) During and after the term of this Agreement, the Executive agrees
that all information which may have been obtained during the course of
employment will be kept strictly confidential with respect to the business
practices, finances, developments, customer's affairs, and trade secrets of the
Claridge not generally known to the public. The Executive will not disclose
such information to any other person, firm or corporation, except solely in the
course of business on behalf of the Claridge pursuant to this Agreement. The
Executive further agrees that upon the termination of employment (irrespective
of the time, manner or cause of termination), all lists, books, written records
and data of every kind relating to or in connection with the Claridge's
customers and business will be delivered and returned to the Claridge.

        (d)     (i)  Subject to the provisions of subparagraph
                     6(d)(ii) (change of control) below, if this Agreement
                     is terminated pursuant to subparagraph 5(a)(v)
                     (voluntary resignation) above, the Executive agrees
                     that for a period of one (1) year thereafter the
                     Executive shall not compete with the Claridge, or
                     engage in the casino business in Atlantic City, New
                     Jersey, as an officer, director, stockholder,
                     employee, representative, agent, or consultant.


               (ii)  In the event the Claridge, its shareholders, or persons
                     having voting control enter into an agreement to sell


<PAGE>



                     to sell, acquire, merge or consolidate the assets or
                     stock of the Claridge with the anticipated result that a
                     change of control of the Claridge or the Claridge's
                     business as presently constituted would occur upon the
                     closing of such agreement, the Executive may terminate
                     this Agreement pursuant to subparagraph 5(a)(v) (voluntary
                     resignation) above. In these circumstances, the
                     Executive shall not be precluded from immediately
                     competing with the Claridge, or engaging in the
                     casino business in Atlantic City, New Jersey, as an
                     officer, director, stockholder, employee,
                     representative, agent or consultant. In addition, the
                     Executive shall be entitled to the benefits provided
                     for in subparagraph 5(c) (voluntary resignation)
                     above provided proper notice of the intent to resign
                     is given to the Claridge.

        (e) From the date of termination of this Agreement and for a period of
one (1) year thereafter, the Executive shall not, alone or with others,
directly or indirectly:

            (i)      solicit for the Executive's benefit or the benefit of
                     any person or organization other than the Claridge,
                     the employment or other services of any employee or
                     consultant of the Claridge or its subsidiaries as
                     well as independent companies affiliated or
                     associated with the Claridge; or

            (ii)     solicit for the Executive's benefit or the benefit of
                     any person or organization other than the Claridge,
                     the employment of any employee of any customer of the
                     Claridge.

        (f) As additional consideration for the agreement contained in
subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive shall
be entitled to a lump sum payment equal to twenty-five percent (25%) of the sum
of the Executive's then base annual salary. The Executive shall make a request
to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11.
Within ten (10) days following receipt of this notice, the Claridge shall send
the Executive either: (i) the lump sum payment described in this subparagraph
(f); or (ii) a notice that the Claridge has waived the Executive's obligations
under subparagraph 6(d) (non-compete) and (e) (no solicitation), in which event
the Executive shall be released from the obligations under these subparagraphs.
In this case, the Claridge shall be released from its obligation to pay the
Executive any additional consideration under this subparagraph (f). All
payments made pursuant to this subparagraph (f) shall be in addition to, and
not in lieu of, any payments to which the Executive may be entitled under
paragraph 5 (termination provisions).

        7. SALE OF THE CLARIDGE. The Claridge shall make its best efforts to
have any successor corporation or business entity assume the obligations under
this Agreement. If this Agreement is not assumed by a successor corporation or
business entity, the obligations of the Claridge to the Executive hereunder
shall continue in full force and effect, subject to the right of the Claridge,
in its sole discretion, to terminate the Executive pursuant to paragraph 5
(termination provisions). If during the term of this Agreement: (a) the
Claridge, its shareholders, or persons having voting control sell stock or
assets or merge with another entity resulting in a change in control of the
Claridge or the Claridge's business as presently constituted; or, (b) if by any
other transaction this Agreement is assigned to an entity not controlled by the
Board of Directors of the Company as presently constituted, then the Executive,
in the Executive's sole discretion may terminate this Agreement within six
months after such a change of control or assignment occurs. In this event the
Executive will be entitled to receive the severance benefits provided for in
subparagraph 5(b) (lump sum payment provisions) of this Agreement and shall not
be precluded from immediately competing with the Claridge or any assignee of
this Agreement, or engaging in the casino business in Atlantic City, New Jersey,
as an officer, director, stockholder, employee, representative, agent or
consultant.


<PAGE>



        8. PARTICIPATION. The Executive shall devote all of his working time,
attention and best efforts to the business of the Claridge. During the term of
this Agreement the Executive shall not be engaged directly or indirectly in any
other business activity whether or not such business activity is pursued for
gain, profit or other monetary advantage. However, this shall not be construed
to prevent the Executive from investing assets in such a form and manner which
will not require any services on the part of the Executive in the operation of
the companies in which such investments are made. Neither shall the Executive
be precluded from involvement in any civic or charitable organizations.

        9. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or breach thereof, shall be settled by arbitration in New Jersey
pursuant to New Jersey law in accordance with the rules of the American
Arbitration Association. Any judgment upon an award rendered pursuant to
arbitration may be entered in any court within the State of New Jersey having
appropriate jurisdiction. In the event of conflict between the rules of the
American Arbitration Association and any statute of the State of New Jersey,
the parties agree to be bound by the laws of New Jersey.

        10. INJUNCTIVE RELIEF. The parties acknowledge that in the event of a
breach or a threatened breach by the Executive of any of the obligations under
this Agreement, the Claridge will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach by the Executive,
the Claridge shall be entitled to such equitable and injunctive relief as may
be available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of the Agreement. Nothing in this
Agreement shall be construed as prohibiting the Claridge from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of the Executive under this Agreement.

        11. NOTICES.  All notices shall be in writing and shall be delivered by
certified or registered mail, return receipt requested, to the parties as
follows:

            If to the Claridge :             c/o Claridge Casino Hotel
                                             Indiana Avenue and The Boardwalk
                                             Atlantic City, New Jersey  08401
                                             Attn: Chair of Human Resources
                                             And Compensation Committee

            If to the Executive:             Robert M. Renneisen
                                             802 Blue Teal Drive
                                             Absecon, New Jersey 08201

        Either party may change the address to which notices are to be
transmitted by notice given according to this paragraph.

        12.  MISCELLANEOUS.  (a)  The Executive represents to the Claridge that
there are no restrictions or agreements to which the Executive is a party which
would be violated by execution of this Agreement and subsequent employment.

        (b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of New Jersey.

        (c) No amendment or waiver or any provision of this Agreement shall be
effective unless in writing signed by both parties.


<PAGE>



        (d) If any provision of this Agreement is held to be invalid or
unenforceable, that provision shall be deemed limited or modified to the extent
necessary to make it valid and enforceable, and in no event shall this
Agreement or any of the provisions of this Agreement be rendered void or
unenforceable.

        (e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.

        (f) No waiver by the Claridge of any breach by the Executive of any
provision or condition of this Agreement by the Executive to be performed shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or any prior or subsequent time.

        (g) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Claridge, but no interest in this Agreement
shall be transferable in any manner by the Executive.

        13.  ENTIRE AGREEMENT.  This Agreement contains the entire Agreement of
the parties.  It may not be changed orally but only by an Agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge in sought.

        IN WITNESS WHEREOF, this Agreement has been executed by the Claridge's
duly authorized officer. The Executive has also executed this Agreement.

WITNESS:                                 EXECUTIVE


/s/ Frank Bellis                         BY: /s/ Robert M. Renneisen
------------------                       ----------------------------
                                         ROBERT M. RENNEISEN

ATTEST:                                  THE CLARIDGE AT PARK
                                         PLACE, INCORPORATED

/s/Frank Bellis                          BY: /s/ James M. Montgomery
-----------------                        --------------------------
                                         JAMES M. MONTGOMERY
                                         CHAIR OF HUMAN RESOURCES
                                         AND COMPENSATION
                                         COMMITTEE



<PAGE>



                                 EXHIBIT 10(bk)

                              EMPLOYMENT AGREEMENT

        THIS AGREEMENT is effective as of January 1, 1997 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Albert T. Britton, an
individual residing at 8 Arcadian Drive, Sicklerville, New Jersey, 08081
("Executive") .

                               W I T N E S S E T H

        WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:

        1. EMPLOYMENT. The Claridge hereby employs the Executive as its
President/Chief Operating Officer. In this capacity, the Executive shall
perform such executive duties as are typical for this position including but
not limited to, those duties outlined in the Claridge's internal controls, and
such additional duties as may be specified from time to time by the Board of
Directors. In addition, the Executive may be asked to serve as a member of the
Claridge's Board of Directors without additional compensation for these
services.

        2. TERM.  The term of this Agreement shall commence on the Effective
Date and terminate on December 31, 1998 ("Initial Term") subject to paragraphs
5 or 7.  Thereafter, the Board may review and extend the Agreement for
consecutive one (1) year renewal terms upon specific action by the Board.

        3. COMPENSATION.  (a) The Claridge shall pay the Executive a base
annual salary of Two Hundred Five Thousand Dollars ($205,000), payable in
weekly installments consistent with the Claridge's regular payroll practice.
The Board of Directors may, from time to time, in their sole discretion,
increase the base annual salary.

        (b) Until termination of the Agreement, the Executive shall continue to
receive full compensation and be entitled to all the benefits of this Agreement.
Upon termination, the Executive shall not be entitled to receive any
compensation or benefits except as set forth in this Agreement or as otherwise
agreed in writing between the parties.

        (c) The Executive shall be entitled to vacation time consistent with
the Claridge's vacation plan, and shall also be entitled to participate in any
bonus plan, incentive compensation plan, qualified pension plan, qualified
profit-sharing plan, medical and/or dental reimbursement plan, group term life
insurance plan, as well as any other employee benefit plan that may be
established by the Claridge or its operating subsidiaries. The participation in
any of these plans shall be consistent with the terms of such plans, and be
available only upon the Claridge or its operating subsidiaries having or
establishing such a plan.

        4. CASINO CONTROL COMMISSION. The Executive represents that he
possesses a casino key employee license required by the New Jersey Casino
Control Commission. The Executive will maintain this license in good standing
during his employment with the Claridge. The Claridge will pay all attorneys'
fees and other costs that the Executive may incur: (a) in connection with any
investigation or proceeding against the Executive; or, (b) in which
the Executive may be involved (other than with respect to


<PAGE>



any act defined as "cause" for termination as noted in 5(a)(ii); or, (c)
relating to any criminal charges filed against the Executive, by the Division
of Gaming Enforcement of the New Jersey Attorney General's Office or by the New
Jersey Casino Control Commission.

        5. TERMINATION.  (a)  Notwithstanding anything to the contrary in this
Agreement, the Executive's employment may be terminated upon the occurrence of
any of the following events:

            (i)      Upon revocation, suspension, or termination of the
                     Executive's casino key employee license or failure to
                     comply, within a reasonable time, with any conditions
                     imposed upon the Executive's casino key employee
                     license;

            (ii)     Upon an act committed by the Executive constituting
                     "cause", defined as a breach of any of the provisions
                     of this Agreement; the indictment and/or conviction
                     of any criminal offense; the deliberate refusal by
                     the Executive (except by reason of disability) to
                     perform the duties under the terms of this Agreement;
                     or if the Executive:

                     (1) Files a petition in bankruptcy court or is adjudicated
                         a bankrupt;

                     (2) Institutes or permits to be instituted any procedure
                         in bankruptcy court for reorganization or rearrangement
                         of the Executive's financial affairs;

                     (3) Appoints a receiver of the Executive's assets or
                         property due to insolvency; or

                     (4) Makes a general assignment for the benefit of
                         creditors;

             (iii)   Upon the death or permanent disability of the Executive;

             (iv)    Upon written notice by the Claridge terminating the
                     Executive's employment without cause;

             (v)     Upon the voluntary resignation by the Executive;

             (vi)    In the event at the time of hire the Executive is a
                     non-New Jersey resident and the Executive fails to
                     establish residency in New Jersey within six (6)
                     months after a Board Resolution directing the
                     Executive to do so. Provided that no such resolution
                     shall be adopted so long as: (i) a sale of the
                     Claridge is an option being considered by the Board
                     of Directors; or, (ii) the Claridge's audited
                     financial statements are expected to contain a "going
                     concern" qualification in the Independent Auditor's
                     Report.

        (b) If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above; 5(f) (diminished
responsibilities) below; paragraph 7 (sale of the Claridge); or, if the
Claridge elects not to renew this Agreement pursuant to paragraph 2 above, then
the Claridge shall make a lump sum payment to the Executive equal to one
hundred and twenty-five percent (125%) of the Executive's base annual salary
then in effect. Upon making of such payment, the Claridge shall have no further
liability or obligation to the Executive under this Agreement.

        (c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive gives
notice of the intent to resign at least twelve (12) weeks prior to terminating
employment, then the Claridge shall continue to pay the Executive weekly
compensation for a period of twelve (12) weeks after the resignation date.
Upon expiration of this additional twelve (12) week period, the


<PAGE>



Claridge shall have no further liability or obligation to the Executive
under this Agreement. If notice of the intent to resign to the
Claridge is given less than twelve weeks before the resignation date, the
Claridge shall have no obligation to pay the Executive beyond the resignation
date.

        (d) Upon termination of this Agreement under subparagraph 5(a)(iv)
(termination without cause), if the Claridge has an existing stock option plan,
the Executive shall receive stock options in the Claridge, if any, in an amount
equal to those that could be exercised within one (1) year from the date of
termination. Provided, however, that such stock options must be exercised by
the Executive within 90 days after termination, or the options shall expire.

        (e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation
to continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the
Claridge.

        (f) If the Executive's title, responsibilities, duties or status within
the Claridge should materially diminish, the Executive may resign and terminate
this Agreement. In this case, the Executive shall be entitled to a lump sum
payment consistent with subparagraph 5(b). Such a resignation will not be
considered a "voluntary resignation" under subparagraph 5(a)(v).

        6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term of this
Agreement, the Executive shall not, without the written consent of the Claridge
, alone or with others, directly or indirectly, participate, engage or become
interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted .

        (b) Nothing in this Agreement shall prohibit the Executive from
acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.

        (c) During and after the term of this Agreement, the Executive agrees
that all information which may have been obtained during the course of
employment will be kept strictly confidential with respect to the business
practices, finances, developments, customer's affairs, and trade secrets of the
Claridge not generally known to the public. The Executive will not disclose
such information to any other person, firm or corporation, except solely in the
course of business on behalf of the Claridge pursuant to this Agreement. The
Executive further agrees that upon the termination of employment (irrespective
of the time, manner or cause of termination), all lists, books, written records
and data of every kind relating to or in connection with the Claridge's
customers and business will be delivered and returned to the Claridge.

        (d)   (i)  Subject to the provisions of subparagraph
                   6(d)(ii) (change of control) below, if this Agreement
                   is terminated pursuant to subparagraph 5(a)(v)
                   (voluntary resignation) above, the Executive agrees
                   that for a period of one (1) year thereafter the
                   Executive shall not compete with the Claridge, or
                   engage in the casino business in Atlantic City, New
                   Jersey, as an officer, director, stockholder,
                   employee, representative, agent, or consultant.

             (ii)  In the event the Claridge, its shareholders, or
                   persons having voting control enter into an agreement
                   to sell, acquire, merge or consolidate the assets or
                   stock of the Claridge with the anticipated


<PAGE>



                    result that a change of control of the Claridge or
                    the Claridge's business as presently constituted would
                    occur upon the closing of such agreement, the Executive
                    may terminate this Agreement pursuant to subparagraph
                    5(a)(v) (voluntary resignation) above. In these
                    circumstances, the Executive shall not be precluded from
                    immediately competing with the Claridge, or engaging in the
                    casino business in Atlantic City, New Jersey, as an
                    officer, director, stockholder, employee, representative,
                    agent or consultant. In addition, the Executive shall be
                    entitled to the benefits provided for in subparagraph
                    5(c) (voluntary resignation) above provided proper notice
                    of the intent to resign is given to the Claridge.

        (e) From the date of termination of this Agreement and for a period of
one (1) year thereafter, the Executive shall not, alone or with others,
directly or indirectly:

            (i)    solicit for the Executive's benefit or the benefit of
                   any person or organization other than the Claridge,
                   the employment or other services of any employee or
                   consultant of the Claridge or its subsidiaries as
                   well as independent companies affiliated or
                   associated with the Claridge; or

            (ii)   solicit for the Executive's benefit or the benefit of
                   any person or organization other than the Claridge,
                   the employment of any employee of any customer of the
                   Claridge.

        (f) As additional consideration for the agreement contained in
subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive shall
be entitled to a lump sum payment equal to twenty-five percent (25%) of the sum
of the Executive's then base annual salary. The Executive shall make a request
to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11.
Within ten (10) days following receipt of this notice, the Claridge shall send
the Executive either: (i) the lump sum payment described in this subparagraph
(f); or (ii) a notice that the Claridge has waived the Executive's obligations
under subparagraph 6(d) (non-compete) and (e) (no solicitation), in which event
the Executive shall be released from the obligations under these subparagraphs.
In this case, the Claridge shall be released from its obligation to pay the
Executive any additional consideration under this subparagraph (f). All
payments made pursuant to this subparagraph (f) shall be in addition to, and
not in lieu of, any payments to which the Executive may be entitled under
paragraph 5 (termination provisions).

        7. SALE OF THE CLARIDGE. The Claridge shall make its best efforts to
have any successor corporation or business entity assume the obligations under
this Agreement. If this Agreement is not assumed by a successor corporation or
business entity, the obligations of the Claridge to the Executive hereunder
shall continue in full force and effect, subject to the right of the Claridge,
in its sole discretion, to terminate the Executive pursuant to paragraph 5
(termination provisions). If during the term of this Agreement: (a) the
Claridge, its shareholders, or persons having voting control sell stock or
assets or merge with another entity resulting in a change in control of the
Claridge or the Claridge's business as presently constituted; or, (b) if by any
other transaction this Agreement is assigned to an entity not controlled by the
Board of Directors of the Company as presently constituted, then the Executive,
in the Executive's sole discretion may terminate this Agreement within six
months after such a change of control or assignment occurs. In this event the
Executive will be entitled to receive the severance benefits provided for in
subparagraph 5(b) (lump sum payment provisions) of this Agreement and shall not
be precluded from immediately competing with the Claridge or any assignee of
this Agreement, or engaging in the casino business in Atlantic City, New Jersey,
as an officer, director, stockholder, employee, representative, agent or
consultant.



<PAGE>



        8. PARTICIPATION. The Executive shall devote all of his working time,
attention and best efforts to the business of the Claridge. During the term of
this Agreement the Executive shall not be engaged directly or indirectly in any
other business activity whether or not such business activity is pursued for
gain, profit or other monetary advantage. However, this shall not be construed
to prevent the Executive from investing assets in such a form and manner which
will not require any services on the part of the Executive in the operation of
the companies in which such investments are made. Neither shall the Executive
be precluded from involvement in any civic or charitable organizations.

        9. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or breach thereof, shall be settled by arbitration in New Jersey
pursuant to New Jersey law in accordance with the rules of the American
Arbitration Association. Any judgment upon an award rendered pursuant to
arbitration may be entered in any court within the State of New Jersey having
appropriate jurisdiction. In the event of conflict between the rules of the
American Arbitration Association and any statute of the State of New Jersey,
the parties agree to be bound by the laws of New Jersey.

        10. INJUNCTIVE RELIEF. The parties acknowledge that in the event of a
breach or a threatened breach by the Executive of any of the obligations under
this Agreement, the Claridge will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach by the Executive,
the Claridge shall be entitled to such equitable and injunctive relief as may
be available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of the Agreement. Nothing in this
Agreement shall be construed as prohibiting the Claridge from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of the Executive under this Agreement.

        11. NOTICES.  All notices shall be in writing and shall be delivered by
certified or registered mail, return receipt requested, to the parties as
follows:

            If to the Claridge :           c/o Claridge Casino Hotel
                                           Indiana Avenue and The Boardwalk
                                           Atlantic City, New Jersey  08401
                                           Attn: Chair of Human Resources
                                           And Compensation Committee

            If to the Executive:           Albert T. Britton
                                           8 Arcadian Drive
                                           Sicklerville, New Jersey 08081

        Either party may change the address to which notices are to be
transmitted by notice given according to this paragraph.

        12. MISCELLANEOUS.  (a)  The Executive represents to the Claridge that
there are no restrictions or agreements to which the Executive is a party which
would be violated by execution of this Agreement and subsequent employment.

        (b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of New Jersey.

        (c) No amendment or waiver or any provision of this Agreement shall be
effective unless in writing signed by both parties.


<PAGE>



        (d) If any provision of this Agreement is held to be invalid or
unenforceable, that provision shall be deemed limited or modified to the extent
necessary to make it valid and enforceable, and in no event shall this
Agreement or any of the provisions of this Agreement be rendered void or
unenforceable.

        (e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.

        (f) No waiver by the Claridge of any breach by the Executive of any
provision or condition of this Agreement by the Executive to be performed shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or any prior or subsequent time.

        (g) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Claridge, but no interest in this Agreement
shall be transferable in any manner by the Executive.

        13.  ENTIRE AGREEMENT.  This Agreement contains the entire Agreement of
the parties.  It may not be changed orally but only by an Agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge in sought.

        IN WITNESS WHEREOF, this Agreement has been executed by the Claridge's
duly authorized officer. The Executive has also executed this Agreement.

WITNESS:                                  EXECUTIVE


/s/ Dawn A. Martin                        BY:/s/ Albert T. Britton
--------------------                      ------------------------
                                          ALBERT T. BRITTON

ATTEST:                                   THE CLARIDGE AT PARK
                                          PLACE, INCORPORATED

/s/ Frank Bellis                          BY:/s/ James M. Montgomery
--------------------                      --------------------------
                                          JAMES M. MONTGOMERY
                                          CHAIR OF HUMAN RESOURCES
                                          AND COMPENSATION
                                          COMMITTEE



<PAGE>



                                 EXHIBIT 10(bl)

                              EMPLOYMENT AGREEMENT

        THIS AGREEMENT is effective as of January 1, 1997 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Raymond A. Spera, an
individual residing at 101 Flyatt Road, Vincentown, New Jersey, 08088
("Executive").

                               W I T N E S S E T H

        WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:

        1. EMPLOYMENT. The Claridge hereby employs the Executive as its
Executive Vice President of Finance and Corporate Development. In this capacity,
the Executive shall perform such executive duties as are typical for this
position including but not limited to, those duties outlined in the Claridge's
internal controls, and such additional duties as may be specified from time to
time by the Board of Directors. In addition, the Executive may be asked to
serve as a member of the Claridge's Board of Directors without additional
compensation for these services.

        2. TERM.  The term of this Agreement shall commence on the Effective
Date and terminate on December 31, 1998 ("Initial Term") subject to paragraphs
5 or 7.  Thereafter, the Board may review and extend the Agreement for
consecutive one (1) year renewal terms upon specific action by the Board.

       3. COMPENSATION.  (a) The Claridge shall pay the Executive a base annual
salary of One Hundred Eighty-Two Thousand Six Hundred Dollars ($182,600),
payable in weekly installments consistent with the Claridge's regular payroll
practice.  The Board of Directors may, from time to time, in their sole
discretion, increase the base annual salary.

        (b) Until termination of the Agreement, the Executive shall continue to
receive full compensation and be entitled to all the benefits of this Agreement.
Upon termination, the Executive shall not be entitled to receive any
compensation or benefits except as set forth in this Agreement or as otherwise
agreed in writing between the parties.

        (c) The Executive shall be entitled to vacation time consistent with
the Claridge's vacation plan, and shall also be entitled to participate in any
bonus plan, incentive compensation plan, qualified pension plan, qualified
profit-sharing plan, medical and/or dental reimbursement plan, group term life
insurance plan, as well as any other employee benefit plan that may be
established by the Claridge or its operating subsidiaries. The participation in
any of these plans shall be consistent with the terms of such plans, and be
available only upon the Claridge or its operating subsidiaries having or
establishing such a plan.

        4. CASINO CONTROL COMMISSION. The Executive represents that he
possesses a casino key employee license required by the New Jersey Casino
Control Commission. The Executive will maintain this license in good standing
during his employment with the Claridge. The Claridge will pay all attorneys'
fees and other costs that the Executive may incur: (a) in connection with any
investigation or proceeding against the Executive; or, (b) in which the
Executive may be involved (other than with respect to any act defined


<PAGE>



defined as "cause" for termination as noted in 5(a)(ii); or, (c) relating
to any criminal charges filed against the Executive, by the Division of
Gaming Enforcement of the New Jersey Attorney General's Office or by the New
Jersey Casino Control Commission.

        5.  TERMINATION.  (a)  Notwithstanding anything to the contrary in this
Agreement, the Executive's employment may be terminated upon the occurrence of
any of the following events:

            (i)      Upon revocation, suspension, or termination of the
                     Executive's casino key employee license or failure to
                     comply, within a reasonable time, with any conditions
                     imposed upon the Executive's casino key employee
                     license;

            (ii)     Upon an act committed by the Executive constituting
                     "cause", defined as a breach of any of the provisions
                     of this Agreement; the indictment and/or conviction
                     of any criminal offense; the deliberate refusal by
                     the Executive (except by reason of disability) to
                     perform the duties under the terms of this Agreement;
                     or if the Executive:

                     (1) Files a petition in bankruptcy court or is adjudicated
                         a bankrupt;

                     (2) Institutes or permits to be instituted any procedure
                         in bankruptcy court for reorganization or
                         rearrangement of the Executive's financial affairs;

                     (3) Appoints a receiver of the Executive's assets or
                         property due to insolvency; or

                     (4) Makes a general assignment for the benefit of
                         creditors;

            (iii)    Upon the death or permanent disability of the Executive;

            (iv)     Upon written notice by the Claridge terminating the
                     Executive's employment without cause;

            (v)      Upon the voluntary resignation by the Executive;

            (vi)     In the event at the time of hire the Executive is a
                     non-New Jersey resident and the Executive fails to
                     establish residency in New Jersey within six (6)
                     months after a Board Resolution directing the
                     Executive to do so. Provided that no such resolution
                     shall be adopted so long as: (i) a sale of the
                     Claridge is an option being considered by the Board
                     of Directors; or, (ii) the Claridge's audited
                     financial statements are expected to contain a "going
                     concern" qualification in the Independent Auditor's
                     Report.

        (b) If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above; 5(f) (diminished
responsibilities) below; paragraph 7 (sale of the Claridge); or, if the
Claridge elects not to renew this Agreement pursuant to paragraph 2 above,
then the Claridge shall make a lump sum payment to the Executive equal to
one hundred and twenty-five percent (125%) of the Executive's base annual
salary then in effect. Upon making of such payment, the Claridge shall have
no further liability or obligation to the Executive under this Agreement.

        (c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive gives
notice of the intent to resign at least twelve (12) weeks prior to terminating
employment, then the Claridge shall continue to pay the Executive weekly
compensation for a period of twelve (12) weeks after the resignation
date. Upon expiration of this additional twelve (12) week period,


<PAGE>



the Claridge shall have no further liability or obligation to the
Executive under this Agreement. If notice of the intent to resign to the
Claridge is given less than twelve weeks before the resignation date, the
Claridge shall have no obligation to pay the Executive beyond the resignation
date.

        (d) Upon termination of this Agreement under subparagraph 5(a)(iv)
(termination without cause), if the Claridge has an existing stock option plan,
the Executive shall receive stock options in the Claridge, if any, in an amount
equal to those that could be exercised within one (1) year from the date of
termination. Provided, however, that such stock options must be exercised by
the Executive within 90 days after termination, or the options shall expire.

        (e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation
to continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the
Claridge.

        (f) If the Executive's title, responsibilities, duties or status within
the Claridge should materially diminish, the Executive may resign and terminate
this Agreement. In this case, the Executive shall be entitled to a lump sum
payment consistent with subparagraph 5(b). Such a resignation will not be
considered a "voluntary resignation" under subparagraph 5(a)(v).

        6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term of this
Agreement, the Executive shall not, without the written consent of the Claridge
, alone or with others, directly or indirectly, participate, engage or become
interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted .

        (b) Nothing in this Agreement shall prohibit the Executive from
acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.

        (c) During and after the term of this Agreement, the Executive agrees
that all information which may have been obtained during the course of
employment will be kept strictly confidential with respect to the business
practices, finances, developments, customer's affairs, and trade secrets of the
Claridge not generally known to the public. The Executive will not disclose
such information to any other person, firm or corporation, except solely in the
course of business on behalf of the Claridge pursuant to this Agreement. The
Executive further agrees that upon the termination of employment (irrespective
of the time, manner or cause of termination), all lists, books, written records
and data of every kind relating to or in connection with the Claridge's
customers and business will be delivered and returned to the Claridge.

        (d)      (i)  Subject to the provisions of subparagraph
                      6(d)(ii) (change of control) below, if this Agreement
                      is terminated pursuant to subparagraph 5(a)(v)
                      (voluntary resignation) above, the Executive agrees
                      that for a period of one (1) year thereafter the
                      Executive shall not compete with the Claridge, or
                      engage in the casino business in Atlantic City, New
                      Jersey, as an officer, director, stockholder,
                      employee, representative, agent, or consultant.


                (ii)  In the event the Claridge, its shareholders, or
                      persons having voting control enter into an agreement
                      to sell, acquire, merge or consolidate the assets or
                      stock of the Claridge with the anticipated


<PAGE>



                      result that a change of control of the Claridge or
                      the Claridge's business as presently constituted would
                      occur upon the closing of such agreement, the
                      Executive may terminate this Agreement pursuant to
                      subparagraph 5(a)(v) (voluntary resignation) above.
                      In these circumstances, the Executive shall not be
                      precluded from immediately competing with the Claridge,
                      or engaging in the casino business in Atlantic City,
                      New Jersey, as an officer, director, stockholder,
                      employee, representative, agent or consultant. In
                      addition, the Executive shall be entitled to the
                      benefits provided for in subparagraph 5(c)
                      (voluntary resignation) above provided proper notice
                      of the intent to resign is given to the Claridge.

        (e) From the date of termination of this Agreement and for a period of
one (1) year thereafter, the Executive shall not, alone or with others,
directly or indirectly:

               (i)   solicit for the Executive's benefit or the benefit of
                     any person or organization other than the Claridge,
                     the employment or other services of any employee or
                     consultant of the Claridge or its subsidiaries as
                     well as independent companies affiliated or
                     associated with the Claridge; or

               (ii)  solicit for the Executive's benefit or the benefit of
                     any person or organization other than the Claridge,
                     the employment of any employee of any customer of the
                     Claridge.

        (f) As additional consideration for the agreement contained in
subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive shall
be entitled to a lump sum payment equal to twenty-five percent (25%) of the sum
of the Executive's then base annual salary. The Executive shall make a request
to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11.
Within ten (10) days following receipt of this notice, the Claridge shall send
the Executive either: (i) the lump sum payment described in this subparagraph
(f); or (ii) a notice that the Claridge has waived the Executive's obligations
under subparagraph 6(d) (non-compete) and (e) (no solicitation), in which event
the Executive shall be released from the obligations under these subparagraphs.
In this case, the Claridge shall be released from its obligation to pay the
Executive any additional consideration under this subparagraph (f). All
payments made pursuant to this subparagraph (f) shall be in addition to, and
not in lieu of, any payments to which the Executive may be entitled under
paragraph 5 (termination provisions).

        7. SALE OF THE CLARIDGE. The Claridge shall make its best efforts to
have any successor corporation or business entity assume the obligations under
this Agreement. If this Agreement is not assumed by a successor corporation or
business entity, the obligations of the Claridge to the Executive hereunder
shall continue in full force and effect, subject to the right of the Claridge,
in its sole discretion, to terminate the Executive pursuant to paragraph 5
(termination provisions). If during the term of this Agreement: (a) the
Claridge, its shareholders, or persons having voting control sell stock or
assets or merge with another entity resulting in a change in control of the
Claridge or the Claridge's business as presently constituted; or, (b) if by any
other transaction this Agreement is assigned to an entity not controlled by the
Board of Directors of the Company as presently constituted, then the Executive,
in the Executive's sole discretion may terminate this Agreement within six
months after such a change of control or assignment occurs. In this event the
Executive will be entitled to receive the severance benefits provided for in
subparagraph 5(b) (lump sum payment provisions) of this Agreement and shall not
be precluded from immediately competing with the Claridge or any assignee of
this Agreement, or engaging in the casino business in Atlantic City, New Jersey,
as an officer, director, stockholder, employee, representative, agent or
consultant.



<PAGE>



        8. PARTICIPATION. The Executive shall devote all of his working time,
attention and best efforts to the business of the Claridge. During the term of
this Agreement the Executive shall not be engaged directly or indirectly in any
other business activity whether or not such business activity is pursued for
gain, profit or other monetary advantage. However, this shall not be construed
to prevent the Executive from investing assets in such a form and manner which
will not require any services on the part of the Executive in the operation of
the companies in which such investments are made. Neither shall the Executive
be precluded from involvement in any civic or charitable organizations.

        9. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or breach thereof, shall be settled by arbitration in New Jersey
pursuant to New Jersey law in accordance with the rules of the American
Arbitration Association. Any judgment upon an award rendered pursuant to
arbitration may be entered in any court within the State of New Jersey having
appropriate jurisdiction. In the event of conflict between the rules of the
American Arbitration Association and any statute of the State of New Jersey,
the parties agree to be bound by the laws of New Jersey.

        10. INJUNCTIVE RELIEF. The parties acknowledge that in the event of a
breach or a threatened breach by the Executive of any of the obligations under
this Agreement, the Claridge will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach by the Executive,
the Claridge shall be entitled to such equitable and injunctive relief as may
be available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of the Agreement. Nothing in this
Agreement shall be construed as prohibiting the Claridge from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of the Executive under this Agreement.

        11. NOTICES.  All notices shall be in writing and shall be delivered by
certified or registered mail, return receipt requested, to the parties as
follows:

            If to the Claridge :           c/o Claridge Casino Hotel
                                           Indiana Avenue and The Boardwalk
                                           Atlantic City, New Jersey  08401
                                           Attn: Chair of Human Resources
                                           And Compensation Committee

           If to the Executive:            Raymond A. Spera
                                           101 Flyatt Road
                                           Vincentown, New Jersey 08088


        Either party may change the address to which notices are to be
transmitted by notice given according to this paragraph.

        12.  MISCELLANEOUS.  (a)  The Executive represents to the Claridge that
there are no restrictions or agreements to which the Executive is a party which
would be violated by execution of this Agreement and subsequent employment .

        (b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of New Jersey.

        (c) No amendment or waiver or any provision of this Agreement shall be
effective unless in writing signed by both parties.


<PAGE>





        (d) If any provision of this Agreement is held to be invalid or
unenforceable, that provision shall be deemed limited or modified to the extent
necessary to make it valid and enforceable, and in no event shall this Agreement
or any of the provisions of this Agreement be rendered void or unenforceable.

        (e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.

        (f) No waiver by the Claridge of any breach by the Executive of any
provision or condition of this Agreement by the Executive to be performed shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or any prior or subsequent time.

        (g) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Claridge, but no interest in this Agreement
shall be transferable in any manner by the Executive.

        13. ENTIRE AGREEMENT.  This Agreement contains the entire Agreement of
the parties.  It may not be changed orally but only by an Agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge in sought.

        IN WITNESS WHEREOF, this Agreement has been executed by the Claridge's
duly authorized officer. The Executive has also executed this Agreement.

WITNESS:                               EXECUTIVE


/s/ Frank Bellis                       BY:/s/ Raymond A. Spera
----------------                       ------------------------
                                       RAYMOND A. SPERA

ATTEST:                                THE CLARIDGE AT PARK
                                       PLACE, INCORPORATED

/s/ Frank Bellis                       BY: /s/ James M. Montgomery
----------------                       ---------------------------
                                       JAMES M. MONTGOMERY
                                       CHAIR OF HUMAN RESOURCES
                                       AND COMPENSATION
                                       COMMITTEE



<PAGE>



                                 EXHIBIT 10(bm)

                              EMPLOYMENT AGREEMENT

        THIS AGREEMENT is effective as of November 1, 1996 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Jean I. Abbott, an
individual residing at 48 English Lane, Egg Harbor Township, New Jersey, 08234
("Executive") .

                               W I T N E S S E T H

        WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement;

        WHEREAS, the Executive and the Claridge are parties to an Employment
Agreement dated January 1, 1996 and continuing for three (3) years thereafter;

        WHEREAS, the Board of Directors intends that all executives of the
Claridge party to employment agreements have uniform employment agreements with
the same terms and conditions; and

        WHEREAS, in order to accomplish this goal, the Claridge and the
Executive agree to recind as of October 31, 1996 the Executive's current
Employment Agreement dated January 1, 1996 and replace that agreement with this
Employment Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:

        1. EMPLOYMENT. The Claridge hereby employs the Executive as its
Executive Vice President of Operations. In this capacity, the Executive shall
perform such executive duties as are typical for this position including but not
limited to, those duties outlined in the Claridge's internal controls, and such
additional duties as may be specified from time to time by the Board of
Directors. In addition, the Executive may be asked to serve as a member of the
Claridge's Board of Directors without additional compensation for these
services.

        2. TERM.  The term of this Agreement shall commence on the Effective
Date and terminate on December 31, 1998 ("Initial Term") subject to paragraphs
5 or 7.  Thereafter, the Board may review and extend the Agreement for
consecutive one (1) year renewal terms upon specific action by the Board.

        3. COMPENSATION. (a) The Claridge shall pay the Executive a base annual
salary of One Hundred Sixty-Two Thousand Seven Hundred Sixty Dollars ($162,760),
payable in weekly installments consistent with the Claridge's regular payroll
practice. The Board of Directors may, from time to time, in their sole
discretion, increase the base annual salary.

        (b) Until termination of the Agreement, the Executive shall continue to
receive full compensation and be entitled to all the benefits of this Agreement.
Upon termination, the Executive shall not be entitled to receive any
compensation or benefits except as set forth in this Agreement or as otherwise
agreed in writing between the parties.

        (c) The Executive shall be entitled to vacation time consistent with
the Claridge's vacation plan, and shall also be entitled to participate in
any bonus plan, incentive compensation plan, qualified pension plan,


<PAGE>



qualified profit-sharing plan, medical and/or dental reimbursement plan, group
term life insurance plan, as well as any other employee benefit plan that may be
established by the Claridge or its operating subsidiaries. The participation in
any of these plans shall be consistent with the terms of such plans, and be
available only upon the Claridge or its operating subsidiaries having or
establishing such a plan.

        4. CASINO CONTROL COMMISSION. The Executive represents that he
possesses a casino key employee license required by the New Jersey Casino
Control Commission. The Executive will maintain this license in good standing
during his employment with the Claridge. The Claridge will pay all attorneys'
fees and other costs that the Executive may incur: (a) in connection with any
investigation or proceeding against the Executive; or, (b) in which the
Executive may be involved (other than with respect to any act defined as "cause"
for termination as noted in 5(a)(ii); or, (c) relating to any criminal charges
filed against the Executive, by the Division of Gaming Enforcement of the New
Jersey Attorney General's Office or by the New Jersey Casino Control Commission.

        5. TERMINATION.  (a)  Notwithstanding anything to the contrary in this
Agreement, the Executive's employment may be terminated upon the occurrence of
any of the following events:

            (i)      Upon revocation, suspension, or termination of the
                     Executive's casino key employee license or failure to
                     comply, within a reasonable time, with any conditions
                     imposed upon the Executive's casino key employee
                     license;

            (ii)     Upon an act committed by the Executive constituting
                     "cause", defined as a breach of any of the provisions
                     of this Agreement; the indictment and/or conviction
                     of any criminal offense; the deliberate refusal by
                     the Executive (except by reason of disability) to
                     perform the duties under the terms of this Agreement;
                     or if the Executive:

                     (1) Files a petition in bankruptcy court or is adjudicated
                         a bankrupt;

                     (2) Institutes or permits to be instituted any procedure
                         in bankruptcy court for reorganization or rearrangement
                         of the Executive's financial affairs;

                     (3) Appoints a receiver of the Executive's assets or
                         property due to insolvency; or

                     (4) Makes a general assignment for the benefit of
                         creditors;

            (iii)    Upon the death or permanent disability of the Executive;

            (iv)     Upon written notice by the Claridge terminating the
                     Executive's employment without cause;

            (v)      Upon the voluntary resignation by the Executive;

            (vi)     In the event at the time of hire the Executive is a
                     non-New Jersey resident and the Executive fails to
                     establish residency in New Jersey within six (6)
                     months after a Board Resolution directing the
                     Executive to do so. Provided that no such resolution
                     shall be adopted so long as: (i) a sale of the
                     Claridge is an option being considered by the Board
                     of Directors; or, (ii) the Claridge's audited
                     financial statements are expected to contain a "going
                     concern" qualification in the Independent Auditor's
                     Report.

        (b)  If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above;

<PAGE>



5(f) (diminished responsibilities) below; paragraph 7 (sale of the Claridge);
or, if the Claridge elects not to renew this Agreement pursuant to paragraph
2 above, then the Claridge shall make a lump sum payment to the Executive
equal to one hundred and twenty-five percent (125%) of the Executive's base
annual salary then in effect. Upon making of such payment, the Claridge
shall have no further liability or obligation to the Executive under this
Agreement.

        (c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive gives
notice of the intent to resign at least twelve (12) weeks prior to terminating
employment, then the Claridge shall continue to pay the Executive weekly
compensation for a period of twelve (12) weeks after the resignation date. Upon
expiration of this additional twelve (12) week period, the Claridge shall have
no further liability or obligation to the Executive under this Agreement. If
notice of the intent to resign to the Claridge is given less than twelve weeks
before the resignation date, the Claridge shall have no obligation to pay the
Executive beyond the resignation date.

        (d) Upon termination of this Agreement under subparagraph 5(a)(iv)
(termination without cause), if the Claridge has an existing stock option plan,
the Executive shall receive stock options in the Claridge, if any, in an amount
equal to those that could be exercised within one (1) year from the date of
termination. Provided, however, that such stock options must be exercised by
the Executive within 90 days after termination, or the options shall expire.

        (e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation
to continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the
Claridge.

        (f) If the Executive's title, responsibilities, duties or status within
the Claridge should materially diminish, the Executive may resign and terminate
this Agreement. In this case, the Executive shall be entitled to a lump sum
payment consistent with subparagraph 5(b). Such a resignation will not be
considered a "voluntary resignation" under subparagraph 5(a)(v).

        6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term of this
Agreement, the Executive shall not, without the written consent of the Claridge
, alone or with others, directly or indirectly, participate, engage or become
interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted .

        (b) Nothing in this Agreement shall prohibit the Executive from
acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.

        (c) During and after the term of this Agreement, the Executive agrees
that all information which may have been obtained during the course of
employment will be kept strictly confidential with respect to the business
practices, finances, developments, customer's affairs, and trade secrets of the
Claridge not generally known to the public. The Executive will not disclose
such information to any other person, firm or corporation, except solely in the
course of business on behalf of the Claridge pursuant to this Agreement. The
Executive further agrees that upon the termination of employment (irrespective
of the time, manner or cause of termination), all lists, books, written records
and data of every kind relating to or in connection with the Claridge's
customers and business will be delivered and returned to the Claridge.



<PAGE>



        (d)   (i)   Subject to the provisions of subparagraph
                    6(d)(ii) (change of control) below, if this Agreement
                    is terminated pursuant to subparagraph 5(a)(v)
                    (voluntary resignation) above, the Executive agrees
                    that for a period of one (1) year thereafter the
                    Executive shall not compete with the Claridge, or
                    engage in the casino business in Atlantic City, New
                    Jersey, as an officer, director, stockholder,
                    employee, representative, agent, or consultant.

              (ii)  In the event the Claridge, its shareholders, or persons
                    having voting control enter into an agreement to sell,
                    acquire, merge or consolidate the assets or stock of the
                    Claridge with the anticipated result that a change of
                    control of the Claridge or the Claridge's business as
                    presently constituted would occur upon the closing of such
                    agreement, the Executive may terminate this Agreement
                    pursuant to subparagraph 5(a)(v) (voluntary
                    resignation) above.  In these circumstances, the
                    Executive shall not be precluded from immediately
                    competing with the Claridge, or engaging in the
                    casino business in Atlantic City, New Jersey, as an
                    officer, director, stockholder, employee,
                    representative, agent or consultant.  In addition,
                    the Executive shall be entitled to the benefits
                    provided for in subparagraph 5(c) (voluntary resignation)
                    above provided proper notice of the intent to resign
                    is given to the Claridge.

        (e) From the date of termination of this Agreement and for a period of
one (1) year thereafter, the Executive shall not, alone or with others,
directly or indirectly:

              (i)   solicit for the Executive's benefit or the benefit of
                    any person or organization other than the Claridge,
                    the employment or other services of any employee or
                    consultant of the Claridge or its subsidiaries as
                    well as independent companies affiliated or
                    associated with the Claridge; or

              (ii)  solicit for the Executive's benefit or the benefit of
                    any person or organization other than the Claridge,
                    the employment of any employee of any customer of the
                    Claridge .

        (f) As additional consideration for the agreement contained in
subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive shall
be entitled to a lump sum payment equal to twenty-five percent (25%) of the sum
of the Executive's then base annual salary. The Executive shall make a request
to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11.
Within ten (10) days following receipt of this notice, the Claridge shall send
the Executive either: (i) the lump sum payment described in this subparagraph
(f); or (ii) a notice that the Claridge has waived the Executive's obligations
under subparagraph 6(d) (non-compete) and (e) (no solicitation), in which
event the Executive shall be released from the obligations under these
subparagraphs. In this case, the Claridge shall be released from its
obligation to pay the Executive any additional consideration under this
subparagraph (f). All payments made pursuant to this subparagraph (f) shall be
in addition to, and not in lieu of, any payments to which the Executive may be
entitled under paragraph 5 (termination provisions).

        7. SALE OF THE CLARIDGE. The Claridge shall make its best efforts to
have any successor corporation or business entity assume the obligations under
this Agreement. If this Agreement is not assumed by a successor corporation or
business entity, the obligations of the Claridge to the Executive hereunder
shall continue in full force and effect, subject to the right of the Claridge,
in its sole discretion, to terminate the Executive pursuant to paragraph 5
(termination provisions). If during the term of this Agreement: (a) the
Claridge, its shareholders, or persons having voting control sell stock or
assets or merge with another entity resulting in a change in control
of the Claridge or the Claridge's business as presently


<PAGE>



constituted; or, (b) if by any other transaction this Agreement is assigned to
an entity not controlled by the Board of Directors of the Company as presently
constituted, then the Executive, in the Executive's sole discretion may
terminate this Agreement within six months after such a change of control or
assignment occurs. In this event the Executive will be entitled to receive the
severance benefits provided for in subparagraph 5(b) (lump sum payment
provisions) of this Agreement and shall not be precluded from immediately
competing with the Claridge or any assignee of this Agreement, or engaging in
the casino business in Atlantic City, New Jersey, as an officer, director,
stockholder, employee, representative, agent or consultant.

        8. PARTICIPATION. The Executive shall devote all of his working time,
attention and best efforts to the business of the Claridge. During the term of
this Agreement the Executive shall not be engaged directly or indirectly in any
other business activity whether or not such business activity is pursued for
gain, profit or other monetary advantage. However, this shall not be construed
to prevent the Executive from investing assets in such a form and manner which
will not require any services on the part of the Executive in the operation of
the companies in which such investments are made. Neither shall the Executive be
precluded from involvement in any civic or charitable organizations.

        9. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or breach thereof, shall be settled by arbitration in New Jersey
pursuant to New Jersey law in accordance with the rules of the American
Arbitration Association. Any judgment upon an award rendered pursuant to
arbitration may be entered in any court within the State of New Jersey having
appropriate jurisdiction. In the event of conflict between the rules of the
American Arbitration Association and any statute of the State of New Jersey,
the parties agree to be bound by the laws of New Jersey.

        10. INJUNCTIVE RELIEF. The parties acknowledge that in the event of a
breach or a threatened breach by the Executive of any of the obligations under
this Agreement, the Claridge will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach by the Executive,
the Claridge shall be entitled to such equitable and injunctive relief as may
be available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of the Agreement. Nothing in this
Agreement shall be construed as prohibiting the Claridge from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of the Executive under this Agreement.




<PAGE>



        11. NOTICES.  All notices shall be in writing and shall be delivered by
certified or registered mail, return receipt requested, to the parties as
follows:

            If to the Claridge :        c/o Claridge Casino Hotel
                                        Indiana Avenue and The Boardwalk
                                        Atlantic City, New Jersey  08401
                                        Attn: Chair of Human Resources
                                        And Compensation Committee

            If to the Executive:        Jean I. Abbott
                                        48 English Lane
                                        Egg Harbor Township, New Jersey  08234

        Either party may change the address to which notices are to be
transmitted by notice given according to this paragraph.

        12.  MISCELLANEOUS.  (a)  The Executive represents to the Claridge that
there are no restrictions or agreements to which the Executive is a party which
would be violated by execution of this Agreement and subsequent employment .

        (b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of New Jersey.

        (c) No amendment or waiver or any provision of this Agreement shall be
effective unless in writing signed by both parties.

        (d) If any provision of this Agreement is held to be invalid or
unenforceable, that provision shall be deemed limited or modified to the extent
necessary to make it valid and enforceable, and in no event shall this
Agreement or any of the provisions of this Agreement be rendered void or
unenforceable.

        (e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.

        (f) No waiver by the Claridge of any breach by the Executive of any
provision or condition of this Agreement by the Executive to be performed shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or any prior or subsequent time.

        (g) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Claridge, but no interest in this Agreement
shall be transferable in any manner by the Executive.

        13. ENTIRE AGREEMENT.  This Agreement contains the entire Agreement
of the parties.  It may not be changed orally but only by an Agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge in sought.




<PAGE>



IN WITNESS WHEREOF, this Agreement has been executed by the Claridge's duly
authorized officer. The Executive has also executed this Agreement.

WITNESS:                                       EXECUTIVE


/s/ Kathryn Loftus                             BY: /s/ Jean I. Abbott
------------------                             ----------------------
                                               JEAN I. ABBOTT


ATTEST:                                        THE CLARIDGE AT PARK
                                               PLACE,  INCORPORATED

/s/ Frank Bellis                               BY: /s/ James M. Montgomery
----------------                               ---------------------------
                                               JAMES M. MONTGOMERY
                                               CHAIR OF HUMAN RESOURCES
                                               AND COMPENSATION
                                               COMMITTEE




<PAGE>



                                 EXHIBIT 10(bn)

                              EMPLOYMENT AGREEMENT

        THIS AGREEMENT is effective as of November 1, 1996 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Frank A. Bellis, Jr., an
individual residing at 10 Hanover Court, Jacobstown, New Jersey, 08562
("Executive") .

                               W I T N E S S E T H

        WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:

        1. EMPLOYMENT. The Claridge hereby employs the Executive as its Senior
Vice President and General Counsel. In this capacity, the Executive shall
perform such executive duties as are typical for this position including but
not limited to, those duties outlined in the Claridge's internal controls, and
such additional duties as may be specified from time to time by the Board of
Directors. In addition, the Executive may be asked to serve as a member of the
Claridge's Board of Directors without additional compensation for these
services.

        2. TERM.  The term of this Agreement shall commence on the Effective
Date and terminate on December 31, 1998 ("Initial Term") subject to paragraphs
5 or 7.  Thereafter, the Board may review and extend the Agreement for
consecutive one (1) year renewal terms upon specific action by the Board.

        3. COMPENSATION.  (a) The Claridge shall pay the Executive a base
annual salary of One Hundred Thirty One Thousand  Dollars ($131,000), payable
in weekly installments consistent with the Claridge's regular payroll practice.
The Board of Directors may, from time to time, in their sole discretion,
increase the base annual salary.

        (b) Until termination of the Agreement, the Executive shall continue to
receive full compensation and be entitled to all the benefits of this Agreement.
Upon termination, the Executive shall not be entitled to receive any
compensation or benefits except as set forth in this Agreement or as otherwise
agreed in writing between the parties.

        (c) The Executive shall be entitled to vacation time consistent with
the Claridge's vacation plan, and shall also be entitled to participate in any
bonus plan, incentive compensation plan, qualified pension plan, qualified
profit-sharing plan, medical and/or dental reimbursement plan, group term life
insurance plan, as well as any other employee benefit plan that may be
established by the Claridge or its operating subsidiaries. The participation in
any of these plans shall be consistent with the terms of such plans, and be
available only upon the Claridge or its operating subsidiaries having or
establishing such a plan.

        4. CASINO CONTROL COMMISSION. The Executive represents that he
possesses a casino key employee license required by the New Jersey Casino
Control Commission. The Executive will maintain this license in good standing
during his employment with the Claridge. The Claridge will pay all attorneys'
fees and other costs that the Executive may incur: (a) in connection with any
investigation or proceeding against the Executive; or, (b) in which the
Executive may be involved (other than with respect to any act defined


<PAGE>



as "cause" for termination as noted in 5(a)(ii); or, (c) relating to any
criminal charges filed against the Executive, by the Division of
Gaming Enforcement of the New Jersey Attorney General's Office or by the New
Jersey Casino Control Commission.

        5.  TERMINATION.  (a)  Notwithstanding anything to the contrary in this
Agreement, the Executive's employment may be terminated upon the occurrence of
any of the following events:

            (i)  Upon revocation, suspension, or termination of the
                 Executive's casino key employee license or failure to
                 comply, within a reasonable time, with any conditions
                 imposed upon the Executive's casino key employee
                 license;

           (ii)  Upon an act committed by the Executive constituting
                 "cause", defined as a breach of any of the provisions
                 of this Agreement; the indictment and/or conviction
                 of any criminal offense; the deliberate refusal by
                 the Executive (except by reason of disability) to
                 perform the duties under the terms of this Agreement;
                 or if the Executive:

                 (1) Files a petition in bankruptcy court or is adjudicated
                     a bankrupt;

                 (2) Institutes or permits to be instituted any procedure in
                     bankruptcy court for reorganization or rearrangement of
                     the Executive's financial affairs;

                 (3) Appoints a receiver of the Executive's assets or property
                     due to insolvency; or

                 (4) Makes a general assignment for the benefit of creditors;

           (iii)  Upon the death or permanent disability of the Executive;

           (iv)   Upon written notice by the Claridge terminating the
                  Executive's employment without cause;

           (v)    Upon the voluntary resignation by the Executive;

           (vi)   In the event at the time of hire the Executive is a
                  non-New Jersey resident and the Executive fails to
                  establish residency in New Jersey within six (6)
                  months after a Board Resolution directing the
                  Executive to do so. Provided that no such resolution
                  shall be adopted so long as: (i) a sale of the
                  Claridge is an option being considered by the Board
                  of Directors; or, (ii) the Claridge's audited
                  financial statements are expected to contain a "going
                  concern" qualification in the Independent Auditor's
                  Report.

        (b) If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above; 5(f) (diminished
responsibilities) below; paragraph 7 (sale of the Claridge); or, if the
Claridge elects not to renew this Agreement pursuant to paragraph 2 above, then
the Claridge shall make a lump sum payment to the Executive equal to one
hundred and twenty-five percent (125%) of the Executive's base annual salary
then in effect. Upon making of such payment, the Claridge shall have no further
liability or obligation to the Executive under this Agreement.

        (c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive gives
notice of the intent to resign at least twelve (12) weeks prior to terminating
employment, then the Claridge shall continue to pay the Executive weekly
compensation for a period of twelve (12) weeks after the resignation
date. Upon expiration of this additional twelve (12) week


<PAGE>



period, the Claridge shall have no further liability or obligation to the
Executive under this Agreement. If notice of the intent to resign to the
Claridge is given less than twelve weeks before the resignation date, the
Claridge shall have no obligation to pay the Executive beyond the resignation
date.

        (d) Upon termination of this Agreement under subparagraph 5(a)(iv)
(termination without cause), if the Claridge has an existing stock option plan,
the Executive shall receive stock options in the Claridge, if any, in an amount
equal to those that could be exercised within one (1) year from the date of
termination. Provided, however, that such stock options must be exercised by
the Executive within 90 days after termination, or the options shall expire.

        (e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation
to continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the
Claridge.

        (f) If the Executive's title, responsibilities, duties or status within
the Claridge should materially diminish, the Executive may resign and terminate
this Agreement. In this case, the Executive shall be entitled to a lump sum
payment consistent with subparagraph 5(b). Such a resignation will not be
considered a "voluntary resignation" under subparagraph 5(a)(v).

        6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term of this
Agreement, the Executive shall not, without the written consent of the Claridge,
alone or with others, directly or indirectly, participate, engage or become
interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted.

        (b) Nothing in this Agreement shall prohibit the Executive from
acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.

        (c) During and after the term of this Agreement, the Executive agrees
that all information which may have been obtained during the course of
employment will be kept strictly confidential with respect to the business
practices, finances, developments, customer's affairs, and trade secrets of the
Claridge not generally known to the public. The Executive will not disclose such
information to any other person, firm or corporation, except solely in the
course of business on behalf of the Claridge pursuant to this Agreement. The
Executive further agrees that upon the termination of employment (irrespective
of the time, manner or cause of termination), all lists, books, written records
and data of every kind relating to or in connection with the Claridge's
customers and business will be delivered and returned to the Claridge.

        (d)   (i)   Subject to the provisions of subparagraph
                    6(d)(ii) (change of control) below, if this Agreement
                    is terminated pursuant to subparagraph 5(a)(v)
                    (voluntary resignation) above, the Executive agrees
                    that for a period of one (1) year thereafter the
                    Executive shall not compete with the Claridge, or
                    engage in the casino business in Atlantic City, New
                    Jersey, as an officer, director, stockholder,
                    employee, representative, agent, or consultant.

              (ii)  In the event the Claridge, its shareholders, or persons
                    having voting control enter into an agreement to sell,
                    acquire, merge or consolidate the assets or stock of the
                    Claridge with the anticipated result that a change of
                    control of the Claridge or the Claridge's business as


<PAGE>



                    presently constituted would occur upon the closing of such
                    agreement, the Executive may terminate this Agreement
                    pursuant to subparagraph 5(a)(v) (voluntary resignation)
                    above. In these circumstances, the Executive shall not be
                    precluded from immediately competing with the Claridge, or
                    engaging in the casino business in Atlantic City, New
                    Jersey, as an officer, director, stockholder, employee,
                    representative, agent or consultant. In addition, the
                    Executive shall be entitled to the benefits provided for in
                    subparagraph 5(c) (voluntary resignation) above provided
                    proper notice of the intent to resign is given to the
                    Claridge.

        (e) From the date of termination of this Agreement and for a period of
one (1) year thereafter, the Executive shall not, alone or with others,
directly or indirectly:

                  (i)    solicit for the Executive's benefit or the benefit of
                         any person or organization other than the Claridge,
                         the employment or other services of any employee or
                         consultant of the Claridge or its subsidiaries as
                         well as independent companies affiliated or
                         associated with the Claridge; or

                  (ii)   solicit for the Executive's benefit or the benefit of
                         any person or organization other than the Claridge,
                         the employment of any employee of any customer of the
                         Claridge.

        (f) As additional consideration for the agreement contained in
subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive shall
be entitled to a lump sum payment equal to twenty-five percent (25%) of the sum
of the Executive's then base annual salary. The Executive shall make a request
to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11.
Within ten (10) days following receipt of this notice, the Claridge shall send
the Executive either: (i) the lump sum payment described in this subparagraph
(f); or (ii) a notice that the Claridge has waived the Executive's obligations
under subparagraph 6(d) (non-compete) and (e) (no solicitation), in which event
the Executive shall be released from the obligations under these subparagraphs.
In this case, the Claridge shall be released from its obligation to pay the
Executive any additional consideration under this subparagraph (f). All
payments made pursuant to this subparagraph (f) shall be in addition to, and
not in lieu of, any payments to which the Executive may be entitled under
paragraph 5 (termination provisions).

        7. SALE OF THE CLARIDGE. The Claridge shall make its best efforts to
have any successor corporation or business entity assume the obligations under
this Agreement. If this Agreement is not assumed by a successor corporation or
business entity, the obligations of the Claridge to the Executive hereunder
shall continue in full force and effect, subject to the right of the Claridge,
in its sole discretion, to terminate the Executive pursuant to paragraph 5
(termination provisions). If during the term of this Agreement: (a) the
Claridge, its shareholders, or persons having voting control sell stock or
assets or merge with another entity resulting in a change in control of the
Claridge or the Claridge's business as presently constituted; or, (b) if by any
other transaction this Agreement is assigned to an entity not controlled by the
Board of Directors of the Company as presently constituted, then the Executive,
in the Executive's sole discretion may terminate this Agreement within six
months after such a change of control or assignment occurs. In this event the
Executive will be entitled to receive the severance benefits provided for in
subparagraph 5(b) (lump sum payment provisions) of this Agreement and shall not
be precluded from immediately competing with the Claridge or any assignee of
this Agreement, or engaging in the casino business in Atlantic City, New Jersey,
as an officer, director, stockholder, employee, representative, agent or
consultant.

        8.  PARTICIPATION.  The Executive shall devote all of his working time,
attention and best efforts to the business of the Claridge.  During the term
of this Agreement the Executive shall not be engaged directly or


<PAGE>



indirectly in any other business activity whether or not such business
activity is pursued for gain, profit or other monetary advantage.
However, this shall not be construed to prevent the Executive from investing
assets in such a form and manner which will not require any services on the
part of the Executive in the operation of the companies in which such
investments are made. Neither shall the Executive be precluded from involvement
in any civic or charitable organizations.

        9. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or breach thereof, shall be settled by arbitration in New Jersey
pursuant to New Jersey law in accordance with the rules of the American
Arbitration Association. Any judgment upon an award rendered pursuant to
arbitration may be entered in any court within the State of New Jersey having
appropriate jurisdiction. In the event of conflict between the rules of the
American Arbitration Association and any statute of the State of New Jersey,
the parties agree to be bound by the laws of New Jersey.

        10. INJUNCTIVE RELIEF. The parties acknowledge that in the event of a
breach or a threatened breach by the Executive of any of the obligations under
this Agreement, the Claridge will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach by the Executive,
the Claridge shall be entitled to such equitable and injunctive relief as may
be available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of the Agreement. Nothing in this
Agreement shall be construed as prohibiting the Claridge from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of the Executive under this Agreement.

        11. NOTICES.  All notices shall be in writing and shall be delivered by
certified or registered mail, return receipt requested, to the parties as
follows:

            If to the Claridge :         c/o Claridge Casino Hotel
                                         Indiana Avenue and The Boardwalk
                                         Atlantic City, New Jersey  08401
                                         Attn: Chair of Human Resources
                                               And Compensation Committee

            If to the Executive:         Frank A. Bellis, Jr.
                                         10 Hanover Court
                                         Jacobstown, New Jersey  08562

        Either party may change the address to which notices are to be
transmitted by notice given according to this paragraph.

        12.  MISCELLANEOUS.  (a)  The Executive represents to the Claridge that
there are no restrictions or agreements to which the Executive is a party which
would be violated by execution of this Agreement and subsequent employment .

        (b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of New Jersey.

        (c) No amendment or waiver or any provision of this Agreement shall be
effective unless in writing signed by both parties.

        (d) If any provision of this Agreement is held to be invalid or
unenforceable, that provision shall be deemed limited or modified to the extent
necessary to make it valid and enforceable, and in no event shall


<PAGE>



this Agreement or any of the provisions of this Agreement be rendered void or
unenforceable.

        (e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.

        (f) No waiver by the Claridge of any breach by the Executive of any
provision or condition of this Agreement by the Executive to be performed shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or any prior or subsequent time.

        (g) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Claridge, but no interest in this Agreement
shall be transferable in any manner by the Executive.

        13. ENTIRE AGREEMENT.  This Agreement contains the entire Agreement of
the parties.  It may not be changed orally but only by an Agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge in sought.

        IN WITNESS WHEREOF, this Agreement has been executed by the Claridge's
duly authorized officer. The Executive has also executed this Agreement.

WITNESS:                                   EXECUTIVE


/s/ Kathryn Loftus                         BY: /s/ Frank A. Bellis, Jr.
-------------------                        ----------------------------
                                           FRANK A. BELLIS, JR.

ATTEST:                                    THE CLARIDGE AT PARK
                                           PLACE, INCORPORATED

/s/ Frank Bellis                           BY: /s/ James M. Montgomery
-----------------                         -----------------------------
                                          JAMES M. MONTGOMERY
                                          CHAIR OF HUMAN RESOURCES
                                          AND COMPENSATION
                                          COMMITTEE



<PAGE>



                                 EXHIBIT 10(bo)

                              EMPLOYMENT AGREEMENT


        THIS AGREEMENT is effective as of February 1, 1997 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Glenn Lillie, an individual
residing at 157 Federal Road, Absecon, New Jersey, 08201 ("Executive").

                               W I T N E S S E T H

        WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:

                  1. EMPLOYMENT. The Claridge hereby employs the Executive as
its Vice President of Marketing Communications. In this capacity, the Executive
shall perform such executive duties as are typical for this position including
but not limited to, those duties outlined in the Claridge's internal controls,
and such additional duties as may be specified from time to time by the Board
of Directors. In addition, the Executive may be asked to serve as a member of
the Claridge's Board of Directors without additional compensation for these
services.

                  2. TERM.  The term of this Agreement shall commence on the
Effective Date and terminate on January 31, 1999 ("Initial Term") subject to
paragraphs 5 or 7.  Thereafter, the Board may review and extend the Agreement
for consecutive one (1) year renewal terms upon specific action by the
Board.

                  3. COMPENSATION.  (a) The Claridge shall pay the Executive
a base annual salary of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000), payable
in weekly installments consistent with the Claridge's regular payroll practice.
The Board of Directors may, from time to time, in their sole discretion,
increase the base annual salary.

                  (b) Until termination of the Agreement, the Executive shall
continue to receive full compensation and be entitled to all the benefits of
this Agreement. Upon termination, the Executive shall not be entitled to
receive any compensation or benefits except as set forth in this Agreement or
as otherwise agreed in writing between the parties.

                  (c) The Executive shall be entitled to vacation time
consistent with the Claridge's vacation plan, and shall also be entitled to
participate in any bonus plan, incentive compensation plan, qualified pension
plan, qualified profit-sharing plan, medical and/or dental reimbursement plan,
group term life insurance plan, as well as any other employee benefit plan that
may be established by the Claridge or its operating subsidiaries. The
participation in any of these plans shall be consistent with the terms of such
plans, and be available only upon the Claridge or its operating subsidiaries
having or establishing such a plan.

                  4. CASINO CONTROL COMMISSION.  The Executive represents that
he possesses a casino key employee license required by the New Jersey Casino
Control Commission.  The Executive will maintain this license in good standing
during his employment with the Claridge.  The Claridge will pay all


<PAGE>



attorneys' fees and other costs that the Executive may incur: (a) in connection
with any investigation or proceeding against the Executive; or, (b) in which the
Executive may be involved (other than with respect to any act defined as "cause"
for termination as noted in 5(a)(ii); or, (c) relating to any criminal charges
filed against the Executive, by the Division of Gaming Enforcement of the New
Jersey Attorney General's Office or by the New Jersey Casino Control Commission.

                  5. TERMINATION. (a) Notwithstanding anything to the contrary
in this Agreement, the Executive's employment may be terminated upon the
occurrence of any of the following events:

                  (i)  Upon revocation, suspension, or termination
                       of the Executive's casino key employee
                       license or failure to comply, within a
                       reasonable time, with any conditions imposed
                       upon the Executive's casino key employee
                       license;

                  (ii) Upon an act committed by the Executive
                       constituting "cause", defined as a breach of
                       any of the provisions of this Agreement; the
                       indictment and/or conviction of any criminal
                       offense; the deliberate refusal by the
                       Executive (except by reason of disability)
                       to perform the duties under the terms of
                       this Agreement ; or if the Executive:

                       (1) Files a petition in bankruptcy court or is
                           adjudicated a bankrupt;

                       (2) Institutes or permits to be instituted any procedure
                           in bankruptcy court for reorganization or
                           rearrangement of the Executive's financial affairs;

                       (3) Appoints a receiver of the Executive's assets or
                           property due to insolvency; or

                       (4) Makes a general assignment for the benefit of
                           creditors;

                 (iii) Upon the death or permanent disability of the Executive;

                 (iv)  Upon written notice by the Claridge terminating the
                       Executive's employment without cause;

                 (v)   Upon the voluntary resignation by the Executive;

                 (vi)  In the event at the time of hire the Executive is a
                       non-New Jersey resident and the Executive fails to
                       establish residency in New Jersey within six (6) months
                       after a  Board Resolution directing the Executive to
                       do so. Provided that no such resolution
                       shall be adopted so long as: (i) a sale of
                       the Claridge is an option being considered
                       by the Board of Directors; or, (ii) the
                       Claridge's audited financial statements are
                       expected to contain a "going concern"
                       qualification in the Independent Auditor's Report.

                  (b) If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above; 5(f) (diminished
responsibilities) below; paragraph 7 (sale of the Claridge); or, if the
Claridge elects not to renew this Agreement pursuant to paragraph 2 above, then
the Claridge shall make a lump sum payment to the Executive equal to one
hundred percent (100%) of the Executive's base annual salary then in effect.
Upon making of such payment, the Claridge shall have no further liability or
obligation to the Executive under this Agreement.


<PAGE>



                  (c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive gives
notice of the intent to resign at least twelve (12) weeks prior to terminating
employment, then the Claridge shall continue to pay the Executive weekly
compensation for a period of twelve (12) weeks after the resignation date. Upon
expiration of this additional twelve (12) week period, the Claridge shall have
no further liability or obligation to the Executive under this Agreement. If
notice of the intent to resign to the Claridge is given less than twelve weeks
before the resignation date, the Claridge shall have no obligation to pay the
Executive beyond the resignation date.

                  (d) Upon termination of this Agreement under subparagraph
5(a)(iv) (termination without cause), if the Claridge has an existing stock
option plan, the Executive shall receive stock options in the Claridge, if any,
in an amount equal to those that could be exercised within one (1) year from
the date of termination. Provided, however, that such stock options must be
exercised by the Executive within 90 days after termination, or the options
shall expire.

                  (e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation
to continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the
Claridge.

                  (f) If the Executive's title, responsibilities, duties or
status within the Claridge should materially diminish, the Executive may resign
and terminate this Agreement. In this case, the Executive shall be entitled to
a lump sum payment consistent with subparagraph 5(b). Such a resignation will
not be considered a "voluntary resignation" under subparagraph 5(a)(v).

                  6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term of
this Agreement, the Executive shall not, without the written consent of the
Claridge, alone or with others, directly or indirectly, participate, engage or
become interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted .

                  (b) Nothing in this Agreement shall prohibit the Executive
from acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.

                  (c) During and after the term of this Agreement, the
Executive agrees that all information which may have been obtained during the
course of employment will be kept strictly confidential with respect to the
business practices, finances, developments, customer's affairs, and trade
secrets of the Claridge not generally known to the public. The Executive will
not disclose such information to any other person, firm or corporation, except
solely in the course of business on behalf of the Claridge pursuant to this
Agreement. The Executive further agrees that upon the termination of employment
(irrespective of the time, manner or cause of termination), all lists, books,
written records and data of every kind relating to or in connection with the
Claridge's customers and business will be delivered and returned to the
Claridge.

                  (d) (i)  Subject to the provisions of the subparagraph
                           6(d)(ii)(change of control) below, if this
                           Agreement is terminated pursuant to subparagraph
                           5(a)(v) (voluntary resignation) above, the
                           Executive agrees that for a period of one (1) year
                           therefter the Executive shall not compete with
                           Claridge, or engage in the casino business in
                           Atlantic City, New Jersey, as an officer, director,
                           stockholder, employee, representative, agent, or
                           consultant.

<PAGE>

                     (ii)  In the event the Claridge, its shareholders, or
                           persons having voting control enter into an
                           agreement to sell, acquire, merge or consolidate the
                           assets or stock of the Claridge with the anticipated
                           result that a change of control of the Claridge or
                           the Claridge's business as presently constituted
                           would occur upon  the closing of such agreement, the
                           Executive may terminate this Agreement pursuant to
                           subparagraph 5(a)(v) (voluntary resignation) above.
                           In these circumstances, the Executive shall not be
                           precluded from immediately competing with
                           the Claridge, or engaging in the casino business in
                           Atlantic City, New Jersey, as an officer, director,
                           stockholder, employee, representative, agent or
                           consultant.  In addition, the Executive shall be
                           entitled to the benefits provided for in
                           subparagraph 5(c) (voluntary resignation) above
                           provided proper notice of the intent to resign is
                           given to the Claridge.

                  (e) From the date of termination of this Agreement and for a
period of one (1) year thereafter, the Executive shall not, alone or with
others, directly or indirectly:

                      (i)  solicit for the Executive's benefit or the
                           benefit of any person or organization other
                           than the Claridge, the employment or other
                           services of any employee or consultant of
                           the Claridge or its subsidiaries as well as
                           independent companies affiliated or
                           associated with the Claridge; or

                     (ii)  solicit for the Executive's benefit or the
                           benefit of any person or organization other
                           than the Claridge, the employment of any
                           employee of any customer of the Claridge.

                  (f) As additional consideration for the agreement contained
in subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive
shall be entitled to a lump sum payment equal to twenty-five percent (25%) of
the sum of the Executive's then base annual salary. The Executive shall make a
request to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11.
Within ten (10) days following receipt of this notice, the Claridge shall send
the Executive either: (i) the lump sum payment described in this subparagraph
(f); or (ii) a notice that the Claridge has waived the Executive's obligations
under subparagraph 6(d) (non-compete) and (e) (no solicitation), in which event
the Executive shall be released from the obligations under these subparagraphs.
In this case, the Claridge shall be released from its obligation to pay the
Executive any additional consideration under this subparagraph (f). All
payments made pursuant to this subparagraph (f) shall be in addition to,
and not in lieu of, any payments to which the Executive may be entitled under
paragraph 5 (termination provisions).

                  7. SALE OF THE CLARIDGE. The Claridge shall make its best
efforts to have any successor corporation or business entity assume the
obligations under this Agreement. If this Agreement is not assumed by a
successor corporation or business entity, the obligations of the Claridge to
the Executive hereunder shall continue in full force and effect, subject to the
right of the Claridge, in its sole discretion, to terminate the Executive
pursuant to paragraph 5 (termination provisions). If during the term of this
Agreement: (a) the Claridge, its shareholders, or persons having voting control
sell stock or assets or merge with another entity resulting in a change in
control of the Claridge or the Claridge's business as presently constituted; or,
(b) if by any other transaction this Agreement is assigned to an entity not
controlled by the Board of Directors of the Company as presently constituted,
then the Executive, in the Executive's sole discretion may terminate this
Agreement within six months after such a change of control or assignment occurs.
In this event the Executive will be entitled to receive the severance
benefits provided for in subparagraph 5(b) (lump sum payment provisions)
of this Agreement and shall not be precluded from immediately competing


<PAGE>



with the Claridge or any assignee of this Agreement, or engaging in the
casino business in Atlantic City, New Jersey, as an officer, director,
stockholder, employee, representative, agent or consultant.

                  8. PARTICIPATION. The Executive shall devote all of his
working time, attention and best efforts to the business of the Claridge.
During the term of this Agreement the Executive shall not be engaged directly
or indirectly in any other business activity whether or not such business
activity is pursued for gain, profit or other monetary advantage. However, this
shall not be construed to prevent the Executive from investing assets in such a
form and manner which will not require any services on the part of the
Executive in the operation of the companies in which such investments are made.
Neither shall the Executive be precluded from involvement in any civic or
charitable organizations.

                  9. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement or breach thereof, shall be settled by arbitration
in New Jersey pursuant to New Jersey law in accordance with the rules of the
American Arbitration Association. Any judgment upon an award rendered pursuant
to arbitration may be entered in any court within the State of New Jersey
having appropriate jurisdiction. In the event of conflict between the rules of
the American Arbitration Association and any statute of the State of New Jersey,
the parties agree to be bound by the laws of New Jersey.

                  10. INJUNCTIVE RELIEF. The parties acknowledge that in the
event of a breach or a threatened breach by the Executive of any of the
obligations under this Agreement, the Claridge will not have an adequate remedy
at law. Accordingly, in the event of any breach or threatened breach by the
Executive, the Claridge shall be entitled to such equitable and injunctive
relief as may be available to restrain the Executive and any business, firm,
partnership, individual, corporation or entity participating in the breach or
threatened breach from the violation of the provisions of the Agreement.
Nothing in this Agreement shall be construed as prohibiting the Claridge from
pursuing any other remedies available at law or in equity for such breach or
threatened breach, including the recovery of damages and the immediate
termination of the employment of the Executive under this Agreement.

                  11. NOTICES.  All notices shall be in writing and shall be
delivered by certified or registered mail, return receipt requested, to the
parties as follows:

        If to the Claridge :         c/o Claridge Casino Hotel
                                     Indiana Avenue and The Boardwalk
                                     Atlantic City, New Jersey  08401
                                     Attn: Chair of Human Resources
                                           And Compensation Committee

        If to the Executive:         Glenn Lillie
                                     157 Federal Road
                                     Absecon, New Jersey 08201

                  Either party may change the address to which notices are to
be transmitted by notice given according to this paragraph.

                  12.  MISCELLANEOUS.  (a)  The Executive represents to the
Claridge that there are no restrictions or agreements to which the Executive is
a party which would be violated by execution of this Agreement and subsequent
employment .

                  (b)  This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed


<PAGE>

by and construed in accordance with the laws of the State of New Jersey.

                  (c) No amendment or waiver or any provision of this Agreement
shall be effective unless in writing signed by both parties.

                  (d) If any provision of this Agreement is held to be invalid
or unenforceable, that provision shall be deemed limited or modified to the
extent necessary to make it valid and enforceable, and in no event shall this
Agreement or any of the provisions of this Agreement be rendered void or
unenforceable.

                  (e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.

                  (f) No waiver by the Claridge of any breach by the Executive
of any provision or condition of this Agreement by the Executive to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time.

                  (g) This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Claridge, but no interest in
this Agreement shall be transferable in any manner by the Executive.

                  13.   ENTIRE AGREEMENT.  This Agreement contains the entire
Agreement of the parties.  It may not be changed orally but only by an
Agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge in sought.

                  IN WITNESS WHEREOF, this Agreement has been executed by the
Claridge's duly authorized officer. The Executive has also executed this
Agreement.

WITNESS:                                 EXECUTIVE


/s/ Kathryn Loftus                       BY:/s/ Glenn Lillie
------------------                       --------------------
                                         GLENN LILLIE

ATTEST:                                  THE CLARIDGE AT PARK PLACE,
                                         INCORPORATED

/s/ Frank Bellis                         BY:/s/ James M. Montgomery
----------------                         --------------------------
                                         JAMES M. MONTGOMERY
                                         CHAIR OF HUMAN RESOURCES
                                         AND COMPENSATION
                                         COMMITTEE



<PAGE>



                                 EXHIBIT 10(bp)

                    SPREADER AGREEMENT OF A CERTAIN MORTGAGE,
               ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
              AND FINANCING STATEMENT RECORDED ON JANAURY 31, 1997
              IN THE OFFICE OF THE ATLANTIC COUNT CLERK, NEW JERSEY
                         IN REEL ______, AT PAGE ______

        This Spreader Agreement (the "Agreement") made as of the 28 day of
January, 1997, by The Claridge at Park Place, Inc., a New Jersey corporation,
whose address is Indiana Avenue and the Boardwalk, Atlantic City, New Jersey
("Mortgagor") in favor of IBJ Schroeder Bank & Trust Company, a New York
banking corporation, as collateral trustee under certain Collateral Trust
Agreement dated as of January 31, 1994 ("Mortgagee").


                              W I T N E S S E T H:

        Whereas, in connection with a certain $85,000,000 indenture (the
"Indenture") dated as of January 31, 1994 among The Claridge Hotel and Casino
Corporation, as Issuer, Mortgagor, as Guarantor, and IBJ Schroeder Bank & Trust
Company, as Trustee, Atlantic City Boardwalk Associates, L.P., executed and
delivered to Mortgagee a certain Mortgage, Assignment of Leases and Rents,
Security Agreement, and Financing Statement dated as of January 31, 1994,
recorded in the Office of the Clerk of Atlantic County, New Jersey on
____________ in Reel ______at Page ______(the "Mortgage"); and

        Whereas, pursuant to Section 4.23 of the Indenture, Mortgagor agreed
that in the event that it acquired certain additional property, it would subject
such additional property to the lien of the Mortgage; and

        Whereas, Mortgagor has acquired certain real property more particularly
described on Exhibit A attached hereto, which is used as a parking facility for
The Claridge Hotel and Casino; and

        Whereas, Mortgagee has agreed to allow the lien of the Mortgage to be
spread to encumber its fee interest in the Premises.

        Now therefore, in consideration of the mutual convenants herein
contained and of other valuable consideration each to the other in hand paid,
receipt whereof is hereby acknowledged, Mortgagor hereby covenants and agrees
as follows:

        1. From and after the date hereof, the Mortgage, and the liens created
thereby, shall be and hereby are spread to cover the fee of the Premises (in
addition to all other property covered by the Mortgage). The Mortgage, as
spread hereby, shall continue to secure the indebtedness evidenced by those
certain notes issued pursuant to the Indenture (the "Notes").

        2. Nothing contained herein shall in any manner (a) impair the security
held for the indebtedness evidenced by the Notes, (b) alter, waive, annul, vary
or affect any of the provisions, conditions or covenants contained in the Notes
or the Mortgage, or (c) affect or impair any right, power, or remedy of
Mortgagee under the Notes or the Mortgage, as spread hereby, it being the intent
of the parties hereto that the terms and provisions of the Notes and the
Mortgage shall continue in full force and effect and shall have the additional
benefit of the Premises to which it is spread hereby.



<PAGE>



        3. This Agreement may not be changed or terminated orally. The
covenants contained herein shall run with the land and shall be binding on and
inure to the benefit of the parties hereto, and their respective successors and
assigns.

        In witness whereof, Mortgagor has executed this Spreader Agreement as
of the date and year first written above.


                                       THE CLARIDGE AT PARK PLACE, INC.



                                       By: /s/ Frank A. Bellis, Jr.
                                       ---------------------------
                                       Frank A. Bellis, Jr.
                                       Senior Vice President/General Counsel



<PAGE>



                                    Exhibit A

All that certain lot, tract or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic and State of New Jersey,
bounded and described as follows:

Tract #1

Beginning at the Southeasterly corner of Pacific and Ohio Avenues; thence

(1)     Eastwardly along the Southerly line of Pacific Avenue 144 feet to the
Westerly line of Park Place; thence

(2)     Southwardly along the Westerly line of Park Place 150 feet; thence

(3)     Westwardly parallel with Pacific Avenue 144 feet to the Easterly line
of Ohio Avenue; thence

(4)     Northwardly along the Easterly line of Ohio Avenue 150 feet to the
place of beginning.

In compliance with Chapter 157, Laws of 1977 premises herein known as Lot 6 in
Block 31, on the Official Tax Map of the City of Atlantic City.

Tract #2

(1)      Southwardly along Park Place 50 feet; thence

(2)     Westwardly parallel with Pacific Avenue 148 feet to the Easterly line
of Ohio Avenue; thence

(3)     Northwardly along same 50 feet; thence

(4)     Eastwardly parallel with Pacific Avenue 148 feet to the point and place
of beginning.

In compliance with Chapter 157, Laws of 1977 premises herein known as Lot 7 in
Block 31, on the Official Tax Map of the City of Atlantic City.

Now known as Lot 26 in Block 31 on the Official Tax Map of the City of Atlantic
City.



<PAGE>



                                 EXHIBIT 10(bq)

            SPREADER AGREEMENT AND MODIFICATION OF SPREADER AGREEMENT
             OF A CERTAIN MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
               SECURITY AGREEMENT AND FINANCING STATEMENT RECORDED
                    ON FEBRUARY 7, 1994 IN THE OFFICE OF THE
                      CLERK OF ATLANTIC COUNTY, NEW JERSEY
           IN MORTGAGE BOOK 5276, PAGE 311, AS SPREAD TO BLOCK NO. 31,
            LOTS 6 AND 7, PURSUANT OT SPREADER AGREEMENT DATED AS OF
                JANUARY 28, 1997, RECORDED IN THE OFFICE OF SUCH
                            CLERK ON JANUARY 31, 1997


        THIS SPREADER AGREEMENT AND MODIFICATION OF SPREADER AGREEMENT
made as of the 18th day of February, 1997 of a certain Mortgage, Assignment of
Leases and Rents, Security Agreement and Financing Statement dated as of
January 31, 1994, recorded on February 7, 1994 in the Office of the Atlantic
County Clerk, New Jersey, in Mortgage Book 5276, Page 311, from THE CLARIDGE AT
PARK PLACE, INC., a New Jersey corporation, whose address is Indiana Avenue and
the Boardwalk, Atlantic City, New Jersey ("Mortgagor"), in favor of IBJ
SCHROEDER BANK & TRUST COMPANY, a New York banking corporation, as collateral
trustee under a certain Collateral Trust Agreement dated as of January 31, 1994
("Mortgagee"), as spread to the Parking Facility (defined herein) by the
Spreader (defined herein).

                                   WITNESSETH:

        WHEREAS, in connection with a certain $85,000,000 indenture (the
"Indenture") dated as of January 31, 1994 among The Claridge Hotel and Casino
Corporation, as Issuer, Mortgagor, as Guarantor and IBJ Schroeder Bank & Trust
Company, as Trustee, Atlantic City Boardwalk Associates, L.P. ("ACBA"),
executed and delivered to Mortgagee a certain Mortgage, Assignment of Leases
and Rents, Security Agreement and Financing Statement dated as of January 31,
1994, recorded on February 7, 1994, in the Office of the Clerk of Atlantic
County, New Jersey in Mortgage Book 5276, at Page 311 (the "Mortgage"); and

        WHEREAS, pursuant to Section 4.23 of the Indenture, Mortgagor agreed
that in the event that it acquired certain additional property, it would subject
such additional property to the lien of the Mortgage; and

        WHEREAS, Mortgagor acquired certain real property known as Block No. 31,
Lot numbers 6 and 7, Atlantic City, New Jersey which is used as a parking
facility for The Claridge Hotel and Casino (the "Parking Facility"); and

        WHEREAS, pursuant to a Spreader Agreement dated as of January 28, 1997
and recorded January 31, 1997 in the Office of the Atlantic County Clerk, New
Jersey (the "Spreader") the lien of the Mortgage was spread to encumber the fee
interest in the Parking Facility; and

        WHEREAS, certain recording information relating to the Mortgage was
incorrectly set forth in the Spreader and Mortgagor desires to correct such
inaccuracies; and





<PAGE>



        WHEREAS, Mortgagor also has acquired certain real property known as
Block No. 33, Lot numbers 58 and 66, Atlantic City, New Jersey, more
particularly described on Exhibit A attached hereto (the "Additional Property");
and

        WHEREAS, Mortgagor has agreed to allow the lien of the Mortgage to be
spread to encumber its fee interest in the Additional Property; and

        WHEREAS, Mortgagor has agreed that with respect to the Parking Facility
and the Additional Property, the Mortgagor would observe certain additional
covenants as set forth more fully below.

        NOW THEREFORE, in consideration of the mutual covenants herein
contained and of other valuable consideration the receipt whereof is hereby
acknowledged, Mortgagor hereby covenants and agrees as follows:

        1. The Spreader is hereby modified effective as of January 28, 1997 to
provide that the Mortgage, Assignment of Leases and Rents, Security Agreement
and Financing Statement referred to in the Spreader shall be deemed to refer to
that certain Mortgage, Assignment of Leases and Rents, Security Agreement and
Financing Statement from ACBA to Mortgagee dated January 31, 1994, recorded in
the Office of the Clerk of Atlantic County, New Jersey, on February 7, 1994, in
Mortgage Book 5276, Page 311, and each reference therein to such mortgage shall
be deemed to refer to the Mortgage and, where so referenced, the appropriate
date, recording date and recording information set forth herein shall be deemed
inserted in the Spreader in place of the information therein.

        2. From and after the date hereof, the Mortgage, and the liens created
thereby, shall be are hereby are spread to encumber the fee of the Additional
Property (in addition to all other property covered by the Mortgage). The
Mortgage as spread hereby, shall continue to secure the indebtedness evidenced
by those certain notes pursuant to the Indenture (the "Notes").

        3. The provisions of the Mortgage, including the defined terms, the
granting clauses, respresentations, warranties, covenants and conditions shall
also apply to the Parking Facility and Additional Property, and to the Mortgagor
described in this agreement with the same force and effect as if said Mortgagor
had originally been a "Mortgagor" under the Mortgage and said Parking Facility
and Additional Property had originally been described in Schedule A to the
Mortgage, except that:

              (a)  all references to the "Mortgagor" in the Mortgage with
                   respect to the Wraparound Mortgage and the Operating Leases
                   shall be deemed applicable only to Atlantic City Boardwalk
                   Associates, L.P. and the Mortgaged Property (as defined in
                   the Mortgage);

              (b)  the provisions of Section 6.09 shall not be applicable to
                   Mortgagor, as defined in this Agreement; and

              (c)  the matters set forth in Schedule B to the Mortgage shall
                   not be applicable to the Parking Facility and Additional
                   Property, and Schedule B attached to this Agreement shall be
                   applicable to the Parking Facility and Additional Property
                   as indicated thereon.








<PAGE>



        4. Nothing contained herein shall in any manner (a) impair the security
held for the indebtedness evidenced by the Notes, (b) alter, waive, annul, vary
or affect any of the provisions, conditions or covenants contained in the Notes
or the Mortgage, or (c) affect or impair any right, power or remedy of
Mortgagee under the Notes or the Mortgage, it being the intent of the parties
hereto that the terms and provisions of the Notes and the Mortgage shall
continue in full force and effect and shall have the additional benefit of the
Parking Facility and Additional Property to which it is spread by the Spreader
and by this Agreement.

        5. This Agreement may not be changed or terminated orally. The
covenants contained herein shall run with the land and shall be binding on and
inure to the benefit of the parties hereto, and their respective successors and
assigns.

        IN WITNESS WHEREOF, Mortgagor has executed this Agreement as of the
date and year first above written.




                  THE CLARIDGE AT PARK PLACE, INC.




                  By: /s/ Frank A. Bellis, Jr.
                  ----------------------------
                      NAME: Frank A. Bellis, Jr.
                      TITLE: Senior Vice President and
                              General Counsel









<PAGE>



                                    EXHIBIT A

                       Description of Additional Property


The land and all the buildings and structures on the land in the City of
Atlantic City, County of Atlantic and State of New Jersey, more particularly
described as follows:

TRACT I:

        BEGINNING at a point in the Easterly line of Indiana Avenue 140 feet
Southwardly of Atlantic Avenue; and extending thence

        1.        Eastwardly, parallel with Atlantic Avenue 109 feet; thence

        2.        Southwardly, parallel with Indiana Avenue 40 feet; thence

        3.        Westwardly, parallel with Atlantic Avenue 109 feet to the
                  Easterly line of Indiana Avenue; thence

        4.        Northwardly, along the same, 40 feet to the BEGINNING.


TRACT II:

        BEGINNING at a point in the Easterly line of Indiana Avenue 180 feet
Southwardly from the Southerly line of Atlantic Avenue and also the corner of
lot formerly owned by Daniel Lacy; and extending thence

        1.        Southwardly, along Indiana Avenue 40 feet to a corner of now
                  or late Naphey's lot; thence

        2.        Eastwardly, along the line of said Naphey's lot and parallel
                  with Atlantic Avenue 150 feet; thence

        3.        Northwardly, parallel with Indiana Avenue 40 feet to a corner
                  of lot now or formerly owned by Daniel Lacy; thence

        4.        Westwardly, along the line of said lot, and parallel with
                  Atlantic Avenue, 150 feet to the point and place of BEGINNING.

        Intended to be the same property conveyed by Robert Schiff, a divorced
        man, whose address is 1931 Boardwalk, Atlantic City, New Jersey, to The
        Claridge at Park Place, Inc. by Deed dated January 5, 1995, recorded in
        the Office of the Atlantic County Clerk on January 6, 1995 in Deed Book
        5750, page 320.



<PAGE>



                                   SCHEDULE B

                             Permitted Encumbrances


A.      Parking Facility, Block number 31, Lot numbers 6 and 7, now known as
Block 31, Lot 26

        1.        Real estate taxes, a lien not yet due and payable.

        2.        Building restrictions as contained in Deed Book 75, page 629,
                  Deed Book 76, page 608, as modified in Deed Book 954, page
                  393.

        3.        Rights granted to the Atlantic City Electric Company in Deed
                  Book 957, page 422, and Deed Book 1997, page 336.


B.      Additional Property, Block number 33, Lot numbers 58 and 66.

        1.        Real estate taxes, a lien not yet due and payable.

        2.        Building restrictions as contained in Deed Book 49, Page 195.

        3.        Rights granted to the Atlantic City Electric Company in Deed
                  Book 940, page 114.

        4.        Subject to Contract for Sale between The Claridge at Park
                  Place, Inc. And Thermal Energy Limited Partnership I dated
                  September 20, 1995.



<PAGE>




                                 EXHIBIT 10(br)

                          FIFTH AMENDMENT TO OPERATING
                     LEASE AGREEMENT AND FOURTH AMENDMENT TO
                       EXPANSION OPERATING LEASE AGREEMENT


                  THIS FIFTH AMENDMENT TO OPERATING LEASE AGREEMENT AND FOURTH
AMENDMENT TO EXPANSION OPERATING LEASE AGREEMENT (this "Fifth Amendment &
Fourth Expansion Amendment"), dated as of the ____ day of March, 1997, to (a)
that certain OPERATING LEASE AGREEMENT, dated as of the 31st day of October,
1983, by and between ATLANTIC CITY BOARDWALK ASSOCIATES, L.P., a New Jersey
limited partnership having a place of business at 2880 West Meade Avenue, Suite
201, Las Vegas, Nevada 89102 ("Lessor"), and THE CLARIDGE AT PARK PLACE,
INCORPORATED, a New Jersey corporation having its principal place of business
at The Claridge Hotel and Casino, Indiana Avenue and the Boardwalk, Atlantic
City, New Jersey 08401 ("Lessee"), a Memorandum of which was recorded in the
Atlantic County Clerk's office on October 31, 1983, in Book 3850 Page 204 (the
"Operating Lease") and (b) that certain EXPANSION OPERATING LEASE AGREEMENT,
dated as of the 17th day of March, 1986 by and between Lessor and Lessee, a
Memorandum of which was recorded in the Atlantic County Clerk's office on March
18, 1986 in Book 4215 Page 128 (the "Expansion Operating Lease").

                              W I T N E S S E T H:


                  WHEREAS, pursuant to the Operating Lease and the Expansion
Operating Lease, Lessor is leasing to Lessee certain land and air rights more
particularly described in Exhibits "A" and "B" respectively, annexed hereto and
made a part hereof, and the buildings and improvements located thereon, situate,
lying and being in the County and City of Atlantic, State of New Jersey, all as
more particularly defined in the Operating Lease and the Expansion Operating
Lease; and
                  WHEREAS, pursuant to that certain Amendment to Operating
Lease Agreement and the


<PAGE>



Expansion Operating Lease Agreement dated June 15, 1989, between Lessor and
Lessee (the "First Amendment"), Lessor and Lessee amended certain terms and
provisions of the Operating Lease and Expansion Operating Lease; and
                  WHEREAS, pursuant to that certain Second Amendment to
Operating Lease Agreement and Expansion Operating Lease Agreement dated March
27, 1990 between Lessor and Lessee (the "Second Amendment"), Lessor and Lessee
further amended certain terms and provisions of the Operating Lease and the
Expansion Operating Lease; and
                  WHEREAS, pursuant to that certain Third Amendment to
Operating Lease Agreement and Expansion Operating Lease Agreement dated as of
August 1, 1991, between Lessor and Lessee (the "Third Amendment"), Lessor and
Lessee further amended certain terms and provisions of the Operating Lease and
the Expansion Operating Lease; and
                  WHEREAS, pursuant to that certain Fourth Amendment to
Operating Lease Agreement dated as of January 31, 1994, between Lessor and
Lessee (the "Fourth Amendment"), Lessor and Lessee further amended certain
terms and provisions of the Operating Lease; and
                  WHEREAS, the parties now desire to further modify certain
terms and provisions of the Operating Lease and the Expansion Operating Lease,
as same have been amended by the First Amendment, Second Amendment, Third
Amendment, and Fourth Amendment.
                  NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
                  1. (a) The following language appearing in Paragraph 1(b) of
the Third Amendment is hereby deleted in its entirety (but without thereby
limiting the effect of such language to set forth the agreement of the parties
from January 1, 1991 to the date hereof):
                                    "For the period commencing on January 1,
                           1991 and ending on December 31, 1991, and for each
                           calendar year thereafter through and


<PAGE>



                           including the calendar year ending on December 31,
                           1998, Basic Rent payable during each such calendar
                           year shall be abated in amounts to be determined by
                           Lessee (the "Abatement") in its reasonable
                           discretion, provided the Abatement applicable during
                           any calendar year complies with the following three
                           (3) criteria:
                                  (i) the Abatement shall not exceed $10,000,000
                           in any one calendar year;
                                 (ii) the aggregate Abatement shall not exceed
                           $38,820,000 for the period commencing on January 1,
                           1991 and ending on December 31, 1998; and
                                (iii) Lessor shall have the right to limit the
                           Abatement allocated to any particular calendar year,
                           to the extent required to cover the payments
                           described in subsections (1) and (2) of the last
                           paragraph of Section 1 of the First Amendment.
                                       Basic Rent may be abated during the year
                           1999 and thereafter in amounts to be determined by
                           the Lessor."
                           (b)      The following language is hereby inserted
                           in place of the language deleted pursuant to
                           subparagraph (a) above:
                                    "(i) The Basic Rent payable on March 1,
                            1997 shall be reduced to an amount so that the
                            total amount of Basic Rent payable on March 1, 1997
                            shall be $1,927,607;
                                    (ii) The foregoing reduction in Basic Rent
                           consist of $867,953 of rent abatement and $1,300,000
                           of Deferred Rent (as that term is defined in the
                           Third Amendment);
                                   (iii) The $1,300,000 of Deferred Rent
                           referred to in clause (ii) above shall be


<PAGE>



                           paid by the Lessee to the Lessor under the
                           circumstances set forth in the Third
                           Amendment and as follows: $25,000 shall be payable
                           each month after March of 1997 for the remainder of
                           1997, $50,000 shall be payable monthly for the year
                           1998 and thereafter until the foregoing rent deferral
                           is paid in full, provided, however, that in the event
                           the Lessee is awarded a judgment or receives a
                           settlement in connection with the Lessee's claim
                           against the general contractor or any other parties
                           arising out of the self-parking garage accident, an
                           amount of proceeds from any such award or settlement
                           not to exceed the outstanding balance of the
                           Deferred Rent under clause (ii) above shall be paid
                           to the Lessor
                                    (iv) For the period commencing on April 1,
                           1997 and ending on December 31, 1997, and for each
                           calendar year thereafter through and including the
                           calendar year ending on December 31, 2003, Basic Rent
                           payable during each such calendar year shall be
                           abated in amounts to be determined by Lessee (the
                           "Abatement") in its reasonable discretion, provided
                           that: (A) Lessor shall have the right to limit the
                           Abatement allocated to any particular calendar year
                           or to require the Lessee to pay Additional Rent, to
                           the extent required to cover the payments described
                           in subsections (1) and (2) of the last paragraph of
                           Section 1 of the First Amendment (which includes all
                           payment due under the Expandable Wraparound Mortgage
                           Loan Agreement dated October 31, 1983, as amended);
                           and (B) the Abatement, determined without reference
                           to this clause (B), shall be reduced by $83,333 for
                           each month of the period commencing on January 1,
                           1999 and ending on December 31, 2000; $125,000 for
                           each month of the calendar year 2001 and; $166,667
                           for each month of each calendar year thereafter
                           through and including the calendar year ending on
                           December 31, 2003.


<PAGE>




                                      Basic Rent may be abated during the year
                           2004 and thereafter in amounts to be determined by
                           the Lessor."
                  2.       Article 16 of the Operating Lease and the Expansion
Operating Lease are hereby amended as follows:
                           a.       Section 16.1 of the Operating Lease and
                           Expansion Operating Lease are hereby amended to add
                           the following to the end of that Section:
                           "Lessor and Lessee agree that for the purposes of
                           the September 30, 1998 Option Date, if Lessee
                           exercises its purchase option, Lessor shall sell
                           to Lessee Lessor's Interest in the Property for the
                           Fair Market Value of the Property (as set forth
                           above in this Section 16.1), but in no event
                           less than an amount equal to the sum of: (x) the
                           amount outstanding at the Option Date in respect of
                           that certain Expandable Wraparound Mortgage Loan
                           Agreement dated as of October 31, 1983, as amended
                           from time to time, between the Lessor and Lessee;
                           (y) $2,500,000 and (3) any amount still outstanding
                           in respect of the $1,300,000 of Deferred Rent
                           set forth in clause 1(b)(ii) above. The costs of any
                           appraisal requested by the Lessor to assist it in
                           negotiating Fair Market Value prior to institution
                           of formal appraisal proceedings shall be borne by
                           the Lessee.
                           b.       Section 16.4 of the Operating Lease and
                           Expansion Operating Lease are hereby amended so that
                           after all references therein to "relevant Option
                           Date", the following is added:
                           "or if the option is exercised on September 30,
                           2003, on January 1, 2004,"
                  3.       This Fifth Amendment & Fourth Expansion Amendment is
subject to prior approval by the New Jersey Casino Control Commission (the
"Commission") and shall not become effective until approval by the Commission
has been granted. Lessee shall use its best efforts to obtain such consent as
promptly as practical.
                  4.       All of the obligations, terms and conditions set
forth in the Operating Lease and the Expansion Operating Lease, as same have
been amended by the First Amendment, the Second Amendment, the Third


<PAGE>



Amendment, and the Fourth Amendment, shall remain unchanged and in full force
and effect, except as specifically modified herein.
                  5.       This Fifth Amendment & Fourth Expansion Amendment
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.



<PAGE>



                  IN WITNESS WHEREOF, the parties hereto have duly executed
this Fifth Amendment & Fourth Expansion Amendment the day and year first above
written.

                                       LESSOR:

Signed, Sealed and Delivered           ATLANTIC CITY BOARDWALK
the Presence of or Attested by:          ASSOCIATES, L.P.


/b/ Barbara A, Constantine             By: /s/ Anthony C. Atchley
--------------------------             --------------------------
Name:                                     Name: Anthony C. Atchley
                                          Title: General Partner


                                       LESSEE:

Signed, Sealed and Delivered           THE CLARIDGE AT PARK PLACE,
in the Presence of or Attested           INCORPORATED
by:


/s/ Kathryn Loftus                     By: /s/ Robert M. Renneisen
--------------------------             --------------------------
Name:                                     Name: Robert M. Renneisen
                                          Title: Vice Chairman/Chief Executive
                                                            Officer


























<PAGE>



STATE OF NEVADA                     )
                                    : ss.:
COUNTY OF CLARK                     )


                  BE IT REMEMBERED, that on this 20th day of March, 1997,
before me, the subscriber, a Notary Public of the State of Nevada, personally
appeared Anthony C. Atchley of ATLANTIC CITY BOARDWALK ASSOCIATES, L.P., a
limited partnership, who, I am satisfied, is the person who has signed the
within instrument; and having first made known to me the contents thereof, he
thereupon acknowledged that he signed and delivered the said instrument as his
voluntary act and deed and as the voluntary act and deed of ATLANTIC CITY
BOARDWALK ASSOCIATES, L.P., a limited partnership.


                                               /s/ Barbara A. Constantine
                                               --------------------------
                                               Notary Public



My Commission Expires:
January 7, 2000


STATE OF NEW JERSEY)
                                    : ss.:
COUNTY OF ATLANTIC )


                  BE IT REMEMBERED, that on this 26 day of March, 1997, before
me, the subscriber, a Notary Public of the State of New Jersey, personally
appeared Robert M. Renneisen of THE CLARIDGE AT PARK PLACE, INCORPORATED, a New
Jersey corporation, and he thereupon acknowledged that he signed the foregoing
instrument as officer, that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument is the voluntary
act and deed of said corporation, made by virtue of authority from its Board of
Directors, and as the voluntary act and deed of THE CLARIDGE AT PARK PLACE,
INCORPORATED, a corporation.


                                                 /s/ Kathryn Loftus
                                                 ------------------
                                                 Notary Public



My Commission Expires:
October 25, 1998




<PAGE>



                                 EXHIBIT 10(bs)


                             RESTRUCTURING AGREEMENT


        This RESTRUCTURING AGREEMENT is entered into this _____ day of March,
1997 by and among THE CLARIDGE HOTEL AND CASINO CORPORATION, a New York
corporation (the "Corporation"), THE CLARIDGE AT PARK PLACE, INCORPORATED, a
New Jersey corporation ("CPPI"), and ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.,
a New Jersey limited partnership ("ACBA").

        WHEREAS, CPPI and ACBA have entered into an Operating Lease, dated
October 31, 1983, which has been amended on various occasions prior to the date
hereof (the Operating Lease, as so amended, is hereinafter referred to as the
"Operating Lease"); and

        WHEREAS, CPPI and ACBA have entered into an Expansion Operating Lease,
dated March 17, 1986, which has been amended on various occasions prior to the
date hereof (the Expansion Operating Lease, as so amended, is hereinafter
referred to as the "Expansion Operating Lease"); and

        WHEREAS, ACBA and CPPI have entered into an Expandable Wraparound
Mortgage Agreement, dated October 31, 1983, and amended as of March 17, 1986
(the "First Amendment") and as of June 15, 1989 (the "Second Amendment") (the
Wraparound Mortgage Agreement, as so amended, is hereinafter referred to as the
"Wraparound Mortgage Agreement"), which contemplated the execution and delivery
by ACBA to CPPI of a Wraparound Mortgage Note, dated October 31, 1983, which has
been amended on several occasions prior to the date hereof (such Wraparound
Mortgage Note, as so amended, is hereinafter referred to as the "Wraparound
Mortgage Note") and a Wraparound Mortgage, dated October 31, 1983, which has
been amended on several occasions prior to the date hereof (such Wraparound
Mortgage, as so amended, is hereinafter referred to as the "Wraparound
Mortgage"); and

        WHEREAS, pursuant to an Indenture dated as of January 31, 1994 (the
"Indenture"), between the Corporation, as Issuer, CPPI, as Guarantor, and IBJ
Schroder Bank and Trust Company (the "Trustee"), the Corporation issued $85
million of 11 3/4% First Mortgage Notes due 2002 (the "First Mortgage Notes")

        WHEREAS, the Corporation and CPPI desire to amend certain relationships
among themselves in order to provide a more stable financial situation for each
of the parties.

        NOW, THEREFORE, the parties hereto, in consideration of the premises,
the terms hereof and other valuable consideration, the receipt of which is
hereby acknowledged, hereby agree as follows:

1.      Amendments

        If the conditions set forth in Section 4 of this Restructuring Agreement
have been satisfied or waived by ACBA on or before the execution of this
Restructuring Agreement (the "Closing Date"), on the Closing Date or as soon
thereafter as is possible, the following agreements, instruments or documents
shall be amended, modified, extinguished or delivered as follows:

        (a)  Operating Lease.  CPPI and ACBA shall enter into an amendment to
             the Operating Lease in the form attached hereto as Exhibit A;

        (b)  Exercise of Option to Extend.  CPPI shall deliver to ACBA a notice,
             in the form of Exhibit B hereto, notifying ACBA of CPPI's


<PAGE>



                  election to exercise the option under Section 1.2 of the
                  Operating Lease to extend the term thereof.

2.      Agreement Regarding Wraparound Mortgage

        (a)       If the Closing Date of this Restructuring Agreement occurs,
                  CPPI will use its best efforts to cause a modification of the
                  Expandable Wraparound Mortgage Agreement (the "Wraparound
                  Modification") that is permitted by, or is in compliance with,
                  the terms of the Indenture and the Related Documents (as
                  defined in the Indenture);

        (b)       The Wraparound Modification, if so permitted, shall provide
                  for the following modifications:

                      (i)    The definition of "Maturity Date" in Section 1 of
                      the Expandable Wraparound Mortgage Loan Agreement will be
                      amended by replacing "September 30, 2000" with
                      "January 1, 2004".

                      (ii)   Section 9 of the First Amendment will be amended
                      as follows:

                             a.     In Section 2.1(a)(i), the reference to
                      "September 30, 2000" will be replaced with "January 1,
                       2004".

                      (iii) On or after September 30, 2003, ACBA will pay
                      Basic Interest at 14%, payable in accordance with the
                      terms the Wraparound Mortgage Agreement or will
                      pay Basic Interest at a rate that does not change the
                      yield-to-maturity under the Wraparound Mortgage Note.

         (c)      Notwithstanding the foregoing, if the Closing Date of this
                  Restructuring Agreement occurs, then at such time as the Notes
                  are no longer outstanding, CPPI will effect the Wraparound
                  Modification at such time.

         (d)      In the event the Wraparound Modification does not occur by
                  September 30, 2000, then:

                  (i) CPPI acknowledges that the Wraparound Mortgage Agreement
                  prohibits CPPI from instituting a foreclosure thereunder so
                  long as the Notes (as defined in the Indenture) are
                  outstanding and covenants not to institute any
                  such action so long as the Notes are outstanding and for
                  such period thereafter as is necessary for the Wraparound
                  Modification to be effected by CPPI and ACBA; and

                  (ii) for such time as CPPI is required to forebear from
                  instituting a foreclosure action as set forth in 2(c)(i)
                  above, ACBA will pay Basic Interest at 14%, payable in
                  accordance with the terms of the Wraparound Mortgage
                  Agreement or will pay Basic Interest at such other rate that
                  does not change the yield-to-maturity under the Wraparound
                  Note.

        (e)     CPPI acknowledges that Section 2.11 of the Wraparound Mortgage
Agreement shall apply to a failure by CPPI to pay, any amounts due under the
Operating Lease and that such Section and Section 7.3 apply to a failure by
CPPI to pay the $1,300,000 of Deferred Rent in accordance with the terms of
Exhibit A.

        (f) All obligations, terms and conditions set forth in the Expandable
Wraparound Mortgage Loan Agreement, as same has been amended by the First
Amendment and the Second Amendment, remain unchanged in full force and effect,
except as specifically modified herein.

        (g) The parties will execute, deliver or record such documents or
instruments as may be necessary to implement the Wraparound Modification.


<PAGE>




        (h) Neither ACBA nor its partners shall be personally liable to the
Corporation or CPPI for (a) the non-payment of any principal of or interest on
the Wraparound Mortgage Note, (b) the non-payment of any other amount owing to
the Corporation or CPPI under this Restructuring Agreement, or (c) damages
arising out of the failure to perform any obligation under this Restructuring
Agreement, the Corporation and CPPI's recourse being expressly limited to the
Collateral (as such term is defined in the Wraparound Mortgage Agreement);
provided, however, that except as expressly set forth herein nothing contained
in this Restructuring Agreement shall limit, restrict or impair the rights of
the Corporation or CPPI to accelerate the maturity of the Wraparound Mortgage
Note and all other Indebtedness (as such term is defined in the Wraparound
Mortgage Agreement) upon the occurrence of an Event of Default (as such term is
defined in the Wraparound Mortgage Agreement), to bring suit and obtain a
judgment against ACBA or its general partners on the Wraparound Mortgage Note
and such other Indebtedness (so long as ACBA or its partners shall not have any
personal liability upon any such judgment except to the extent of its interest
in the Collateral and the satisfaction thereof shall be limited to the
Collateral) or to exercise all rights and remedies provided in this
Restructuring Agreement, or otherwise to realize upon the Collateral. This
paragraph shall not be deemed to be a waiver by the Corporation or CPPI of any
claims in the nature of fraud or deceit arising under or in connection with
this Restructuring Agreement.

3.      Agreement Regarding Rent Deferral

        CPPI will use the benefit of the $1,300,000 rent deferral, as described
in Exhibit A hereto, to make the interest payment due under the Indenture on
March 5, 1997 which, with such deferral, CPPI is able to make in full so as to
cure any default under the Indenture


4.      Conditions

        The obligation of ACBA to take the actions contemplated by Section 1 of
this Restructuring Agreement are subject to satisfaction, or waiver by ACBA in
writing, of the following conditions on or before the Closing Date:

        (a)     No person shall have commenced any foreclosure or other action
                or proceeding for the purpose of terminating the ownership
                interest of ACBA in its assets or any substantial portion
                thereof.

        (b)     No person shall have commenced any bankruptcy or other
                insolvency proceeding against ACBA.

        (c)     ACBA shall have received a copy of the opinion of counsel that
                the Corporation is required to deliver to the Trustee pursuant
                to Section 4.12(i) of the Indenture.

5.      Effective Date

        The Effective Date of this Restructuring Agreement is March 1, 1997.

6.      Entire Agreement; Amendment

        This Restructuring Agreement sets forth the entire agreement among the
parties hereto as to the subject matter hereof and it may not be amended or
modified in any respect except by an instrument in writing signed by all the
parties hereto.


<PAGE>



7.      Assignment

        No party to this Restructuring Agreement may assign its rights
hereunder without the written consent of each of the other parties hereto.

8.      Acknowledgment

        ACBA acknowledges receipt of a true copy of this Restructuring
Agreement.


        IN WITNESS WHEREOF, the undersigned have entered into this
Restructuring Agreement as of the date and year first above written.



                                    THE CLARIDGE HOTEL AND CASINO CORPORATION

                                    By: /s/ Robert M. Renneisen
                                    ----------------------------
                                    Name: Robert M. Renneisen
                                    Title: President/Chief Executive Officer


                                    THE CLARIDGE AT PARK PLACE, INCORPORATED

                                    By: /s/ Robert M. Renneisen
                                    ----------------------------
                                    Name: Robert M. Renneisen
                                    Title: Vice Chairman/Chief Executive Officer


                                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

                                    By: /s/ Anthony C. Atchley
                                    --------------------------
                                    Name: Anthony C. Atchley
                                    Title: General Partner



<PAGE>



                                                                       Exhibit A

                          FIFTH AMENDMENT TO OPERATING
                     LEASE AGREEMENT AND FOURTH AMENDMENT TO
                       EXPANSION OPERATING LEASE AGREEMENT


                  THIS FIFTH AMENDMENT TO OPERATING LEASE AGREEMENT AND FOURTH
AMENDMENT TO EXPANSION OPERATING LEASE AGREEMENT (this "Fifth Amendment &
Fourth Expansion Amendment"), dated as of the ____ day of March, 1997, to (a)
that certain OPERATING LEASE AGREEMENT, dated as of the 31st day of October,
1983, by and between ATLANTIC CITY BOARDWALK ASSOCIATES, L.P., a New Jersey
limited partnership having a place of business at 2880 West Meade Avenue, Suite
201, Las Vegas, Nevada 89102 ("Lessor"), and THE CLARIDGE AT PARK PLACE,
INCORPORATED, a New Jersey corporation having its principal place of business
at The Claridge Hotel and Casino, Indiana Avenue and the Boardwalk, Atlantic
City, New Jersey 08401 ("Lessee"), a Memorandum of which was recorded in the
Atlantic County Clerk's office on October 31, 1983, in Book 3850 Page 204 (the
"Operating Lease") and (b) that certain EXPANSION OPERATING LEASE AGREEMENT,
dated as of the 17th day of March, 1986 by and between Lessor and Lessee, a
Memorandum of which was recorded in the Atlantic County Clerk's office on March
18, 1986 in Book 4215 Page 128 (the "Expansion Operating Lease").

                              W I T N E S S E T H:


                  WHEREAS, pursuant to the Operating Lease and the Expansion
Operating Lease, Lessor is leasing to Lessee certain land and air rights more
particularly described in Exhibits "A" and "B" respectively, annexed hereto and
made a part hereof, and the buildings and improvements located thereon, situate,
lying and being in the County and City of Atlantic, State of New Jersey, all as
more particularly defined in the Operating Lease and the Expansion Operating
Lease; and
                  WHEREAS, pursuant to that certain Amendment to Operating
Lease Agreement and the Expansion Operating Lease Agreement dated June 15,
1989, between Lessor and Lessee (the "First Amendment"), Lessor and


<PAGE>



Lessee amended certain terms and provisions of the Operating Lease and
Expansion Operating Lease; and
                  WHEREAS, pursuant to that certain Second Amendment to
Operating Lease Agreement and Expansion Operating Lease Agreement dated March
27, 1990 between Lessor and Lessee (the "Second Amendment"), Lessor and Lessee
further amended certain terms and provisions of the Operating Lease and the
Expansion Operating Lease; and
                  WHEREAS, pursuant to that certain Third Amendment to
Operating Lease Agreement and Expansion Operating Lease Agreement dated as of
August 1, 1991, between Lessor and Lessee (the "Third Amendment"), Lessor and
Lessee further amended certain terms and provisions of the Operating Lease and
theExpansion Operating Lease; and
                  WHEREAS, pursuant to that certain Fourth Amendment to
Operating Lease Agreement dated as of January 31, 1994, between Lessor and
Lessee (the "Fourth Amendment"), Lessor and Lessee further amended certain
terms and provisions of the Operating Lease; and
                  WHEREAS, the parties now desire to further modify certain
terms and provisions of the Operating Lease and the Expansion Operating Lease,
as same have been amended by the First Amendment, Second Amendment, Third
Amendment, and Fourth Amendment.
                  NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
                  1. (a) The following language appearing in Paragraph 1(b) of
the Third Amendment is hereby deleted in its entirety (but without thereby
limiting the effect of such language to set forth the agreement of the parties
from January 1, 1991 to the date hereof):
                                 "For the period commencing on January 1,
                        1991 and ending on December 31, 1991, and for each
                        calendar year thereafter through and including the
                        calendar year ending on December 31, 1998, Basic Rent



<PAGE>



                        payable during each such calendar year shall be abated
                        in amounts to be determined by Lessee (the "Abatement")
                        in its reasonable discretion, provided the Abatement
                        applicable during any calendar year complies with the
                        following three (3) criteria:
                                 (i) the Abatement shall not exceed $10,000,000
                           in any one calendar year;
                                (ii) the aggregate Abatement shall not exceed
                           $38,820,000 for the period commencing on January 1,
                           1991 and ending on December 31, 1998; and
                               (iii) Lessor shall have the right to limit the
                           Abatement allocated to any particular calendar year,
                           to the extent required to cover the payments
                           described in subsections (1) and (2) of the last
                           paragraph of Section 1 of the First Amendment.
                                             Basic Rent may be abated during
                           the year 1999 and thereafter in amounts to be
                           determined by the Lessor."
                           (b)   The following language is hereby inserted in
                           place of the language deleted pursuant to
                           subparagraph (a) above:
                                    "(i) The Basic Rent payable on March 1,
                           1997 shall be reduced to an amount so that the total
                           amount of Basic Rent payable on March 1, 1997 shall
                           be $1,927,607;
                                    (ii) The foregoing reduction in Basic Rent
                           consist of $867,953 of rent abatement and $1,300,000
                           of Deferred Rent (as that term is defined in the
                           Third Amendment);
                                    (iii) The $1,300,000 of Deferred Rent
                           referred to in clause (ii) above shall be paid by
                           the Lessee to the Lessor under the circumstances set


<PAGE>



                           forth in the Third Amendment and as follows: $25,000
                           shall be payable each month after March of 1997 for
                           the remainder of 1997, $50,000 shall be payable
                           monthly for the year 1998 and thereafter until the
                           foregoing rent deferral is paid in full, provided,
                           however, that in the event the Lessee is awarded a
                           judgment or receives a settlement in connection with
                           the Lessee's claim against the general contractor or
                           any other parties arising out of the self-parking
                           garage accident, an amount of proceeds from any such
                           award or settlement not to exceed the outstanding
                           balance of the Deferred Rent under clause (ii) above
                           shall be paid to the Lessor
                                    (iv) For the period commencing on April 1,
                           1997 and ending on December 31, 1997, and for each
                           calendar year thereafter through and including the
                           calendar year ending on December 31, 2003, Basic Rent
                           payable during each such calendar year shall be
                           abated in amounts to be determined by Lessee (the
                           "Abatement") in its reasonable discretion, provided
                           that:
                           (A) Lessor shall have the right to limit the
                           Abatement allocated to any particular calendar year
                           or to require the Lessee to pay Additional Rent, to
                           the extent required to cover the payments described
                           in subsections (1) and (2) of the last paragraph of
                           Section 1 of the First Amendment (which includes all
                           payment due under the Expandable Wraparound Mortgage
                           Loan Agreement dated October 31, 1983, as amended);
                           and (B) the Abatement, determined without reference
                           to this clause
                           (B), shall be reduced by $83,333 for each month of
                           the period commencing on January 1, 1999 and ending
                           on December 31, 2000; $125,000 for each month of the
                           calendar year 2001 and; $166,667 for each month of
                           each calendar year thereafter through and including
                           the calendar year ending on December 31, 2003.


<PAGE>



                                       Basic Rent may be abated during the year
                           2004 and thereafter in amounts to be determined by
                           the Lessor."
                  2. Article 16 of the Operating Lease and the Expansion
Operating Lease are hereby amended as follows:
                           a.       Section 16.1 of the Operating Lease and
Expansion Operating Lease are hereby amended to add the following to the end of
that Section:
        "Lessor and Lessee agree that for the purposes of the September 30,
        1998 Option Date, if Lessee exercises its purchase option, Lessor shall
        sell to Lessee Lessor's Interest in the Property for the Fair Market
        Value of the Property (as set forth above in this Section 16.1), but
        in no event less than an amount equal to the sum of: (x) the amount
        outstanding at the Option Date in respect of that certain Expandable
        Wraparound Mortgage Loan Agreement dated as of October 31, 1983, as
        amended from time to time, between the Lessor and Lessee; (y)
        $2,500,000 and (3) any amount still outstanding in respect of the
        $1,300,000 of Deferred Rent set forth in clause 1(b)(ii) above. The
        costs of any appraisal requested by the Lessor to assist it in
        negotiating Fair Market Value prior to institution of formal appraisal
        proceedings shall be borne by the Lessee.
                           b.       Section 16.4 of the Operating Lease and
Expansion Operating Lease are hereby amended so that after all references
therein to "relevant Option Date", the following is added:
        "or if the option is exercised on September 30, 2003, on January 1,
2004,"
                  3. This Fifth Amendment & Fourth Expansion Amendment is
subject to prior approval by the New Jersey Casino Control Commission (the
"Commission") and shall not become effective until approval by the Commission
has been granted. Lessee shall use its best efforts to obtain such consent as
promptly as practical.
                  4. All of the obligations, terms and conditions set forth in
the Operating Lease and the Expansion Operating Lease, as same have been amended
by the First Amendment, the Second Amendment, the Third Amendment, and the
Fourth Amendment, shall remain unchanged and in full force and effect,


<PAGE>



except as specifically modified herein.
                  5. This Fifth Amendment & Fourth Expansion Amendment may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Fifth Amendment & Fourth Expansion Amendment the day and year first above
written.

                                       LESSOR:

Signed, Sealed and Delivered           ATLANTIC CITY BOARDWALK
the Presence of or Attested by:          ASSOCIATES, L.P.


/b/ Barbara A, Constantine             By:/s/ Anthony C. Atchley
--------------------------             -------------------------
Name:                                     Name: Anthony C. Atchley
                                          Title: General Partner


                                       LESSEE:

Signed, Sealed and Delivered           THE CLARIDGE AT PARK PLACE,
in the Presence of or Attested           INCORPORATED
by:


/s/ Kathryn Loftus                     By:/s/ Robert M. Renneisen
------------------                     --------------------------
Name:                                     Name: Robert M. Renneisen
                                          Title: Vice Chairman/Chief Executive
                                                         Officer

























<PAGE>



STATE OF NEVADA                     )
                                    : ss.:
COUNTY OF CLARK                     )


                  BE IT REMEMBERED, that on this 20th day of March, 1997,
before me, the subscriber, a Notary Public of the State of Nevada, personally
appeared Anthony C. Atchley of ATLANTIC CITY BOARDWALK ASSOCIATES, L.P., a
limited partnership, who, I am satisfied, is the person who has signed the
within instrument; and having first made known to me the contents thereof,
he thereupon acknowledged that he signed and delivered the said instrument as
his voluntary act and deed and as the voluntary act and deed of ATLANTIC CITY
BOARDWALK ASSOCIATES, L.P., a limited partnership.


                                           /s/ Barbara A. Constantine
                                           --------------------------
                                           Notary Public



My Commission Expires:
January 7, 2000


STATE OF NEW JERSEY)
                                    : ss.:
COUNTY OF ATLANTIC )


                  BE IT REMEMBERED, that on this 26 day of March, 1997, before
me, the subscriber, a Notary Public of the State of New Jersey, personally
appeared Robert M. Renneisen of THE CLARIDGE AT PARK PLACE, INCORPORATED, a New
Jersey corporation, and he thereupon acknowledged that he signed the foregoing
instrument as officer, that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument is the voluntary
act and deed of said corporation, made by virtue of authority from its Board of
Directors, and as the voluntary act and deed of THE CLARIDGE AT PARK PLACE,
INCORPORATED, a corporation.


                                           /s/ Kathryn Loftus
                                           ------------------
                                           Notary Public



My Commission Expires:
October 25, 1998




<PAGE>



                                                                       Exhibit B


            [Letterhead of The Claridge At Park Place, Incorporated]










        March 26, 1997



Atlantic City Boardwalk Associates, L.P.
2880 West Meade Avenue, Suite 201
Las Vegas, Nevada 89102

Attention: General Partner

                  Re:      Notice of Option to Extend Operating Lease Agreement

Dear Sir/Madam:

                  The undersigned hereby notifies you that in accordance with
Section 1.2 of the Operating Lease Agreement (the "Lease"), dated October 31,
1983, by and between Atlantic City Boardwalk Associates, L.P. ("Lessor"), and
The Claridge At Park Place, Incorporated ("Lessee"), the undersigned elects to
exercise its Option to Extend the Lease for an Extended Term (as defined in the
Lease) beginning on October 1, 1998.



        THE CLARIDGE AT PARK PLACE,
        INCORPORATED



        /s/ Robert M. Renneisen
        -----------------------
        By: Robert M. Renneisen
        Title: Vice Chairman/Chief Executive Officer




<PAGE>


                                  EXHIBIT 12(b)


                    THE CLARIDGE HOTEL AND CASINO CORPORATION

                       RATIO OF EARNINGS TO FIXED CHARGES
                             (dollars in thousands)
<TABLE>
<CAPTION>


                                              1996              1995             1994            1993              1992
                                              ----              ----             ----            ----              ----


<S>                                           <C>               <C>              <C>             <C>               <C>
(Loss) income before income
  taxes and extraordinary items                $(20,787)          (2,278)         (9,294)           8,554            10,123
Add:
  One-third of rent expense to
    Partnership deemed
    representative of interest                   12,854           12,546          12,073           11,527            11,553
  Interest expense                                9,350            9,516           9,956            4,173             4,240
  Amortization of capitalized
    interest                                         28              -0-             -0-              -0-               -0-
                                               --------           ------          ------           ------            ------

Income as adjusted                             $  1,445           19,784          12,735           24,254            25,916
                                               ========           ======          ======           ======            ======
Fixed charges:
  One-third of rent expense to
    Partnership deemed
     representative of interest                 $12,854           12,546          12,073           11,527            11,553
  Interest expense                                9,350            9,516           9,956            4,173             4,240
  Capitalized interest                            1,069            1,138             -0-              -0-               -0-
                                               --------           ------          ------           ------            ------

Fixed charges                                   $23,273           23,200          22,029           15,700            15,793
                                               ========           ======          ======           ======            ======

Ratio of earnings to fixed charges                  .06              .85             .58             1.54              1.64
                                               ========           ======          ======           ======            ======

</TABLE>


Earnings in 1996, 1995, and 1994 were insufficient to cover fixed charges by
$21,828,000, $3,416,000, and $9,294,000, respectively.