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                                                                     EXHIBIT 2.2

                      IN THE UNITED STATES BANKRUPTCY COURT

                              DISTRICT OF COLORADO

In re                                                   Case No. 02-28089-ABC

WINDSOR WOODMONT BLACK HAWK                             Chapter 11
RESORT CORPORATION, a/k/a the Black
Hawk Casino by Hyatt, a Colorado Corporation,

EIN 75-2720870,

                  Debtor.

                SECOND AMENDED DISCLOSURE STATEMENT TO ACCOMPANY

                  PLAN OF REORGANIZATION PROPOSED BY THE DEBTOR

                             DATED: OCTOBER 12, 2004

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                                TABLE OF CONTENTS

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<S>                                                                                                                        <C>
I.     INTRODUCTION.....................................................................................................    1

         A.       The Purpose of this Disclosure Statement..............................................................    2

         B.       Brief Summary of the Plan.............................................................................    3

         C.       Summary of Entities Entitled to Vote on the Plan and of Certain Requirements Necessary
                  for Confirmation of the Plan..........................................................................    4

         D.       Confirmation Hearing, Voting Procedures, Balloting Deadline, and Other Important Dates,
                  Deadlines, and Procedures.............................................................................    5

                  1.       Voting Procedures and Deadlines..............................................................    5

                  2.       Date of the Confirmation Hearing and Deadlines for Objections to Confirmation
                           of the Plan..................................................................................    5

         E.       Important Notices and Cautionary Statements...........................................................    6

         F.       Additional Information................................................................................    7

II.     BACKGROUND INFORMATION..........................................................................................    8

         A.       The Debtor's Pre-Petition Business and Operations.....................................................    8

                  1.       General Background...........................................................................    8

                  2.       The Debtor's Debt Structure..................................................................    9

                  3.       The Debtor's Equity Structure................................................................   12

                  4.       The Debtor's Financial Difficulties and the Events Leading to the Commencement
                           of the Chapter 11 Case.......................................................................   15

         B.       The Commencement of the Case..........................................................................   15

         C.       Significant Events Since the Commencement of the Case.................................................   16

                  1.       Rejection of the Hyatt Management Agreement and
                           Post-Petition Management of the Casino.......................................................   16

                  2.       Determinations and Agreements Regarding Cash Collateral......................................   17

                  3.       Receiver's Payment of Claims.................................................................   17

                  4.       Retention of Professionals and Appointment of the Creditors' Committee.......................   18

                  5.       Transfer of the Debtor's Assets..............................................................   18
</TABLE>

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<TABLE>
<S>                                                                                                                        <C>
                  6.       Other Significant Events in the Case........................................................    23

                  7.       Claims......................................................................................    30

                  8.       Executory Contracts and Unexpired Leases....................................................    33

                  9.       Avoidance Actions...........................................................................    34

III.     SUMMARY OF THE PLAN...........................................................................................    34

         A.       Classification of Claims and Interests under the Plan................................................    34

                  1.       Unclassified Claims.........................................................................    36

                  2.       Classified Claims and Interests.............................................................    39

         B.       Treatment of Executory Contracts and Unexpired Leases................................................    48

                  1.       Assumption and Assignment of Executory Contracts and Unexpired Leases.......................    49

                  2.       Rejection of Executory Contracts and Unexpired Leases.......................................    51

                  3.       Contracts Entered into after the Petition Date..............................................    52

         C.       Means of Execution and Implementation of the Plan....................................................

                  1.       Funding of the Plan.........................................................................    53

                  2.       Transfer of the Acquired Assets to Ameristar................................................    53

                  3.       Approval of Settlement Agreements...........................................................    53

                  4.       The Continuing Estate.......................................................................    54

                  5.       The Post-Effective Date Committee...........................................................    57

                  6.       The Ad Hoc Committee........................................................................    58

                  7.       Cancellation of Interests...................................................................    59

                  8.       Termination of Officers and Directors.......................................................    59

         D.       Other Plan Provisions................................................................................    59

                  1.       Exculpation.................................................................................

                  2.       Revocation of Plan/No Admissions............................................................    59

                  3.       Dissolution of Creditors' Committee.........................................................    60

                  4.       Exemption from Certain Transfer Taxes.......................................................    60
</TABLE>

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<TABLE>
<S>                                                                                                                        <C>
                  5.       Modifications of Plan.......................................................................    60

                  6.       Plan Shall not Affect Rights of First Place LLC.............................................    60

         E.       Effect of Confirmation of the Plan...................................................................    61

                  1.       Non-Discharge of the Debtor.................................................................    61

                  2.       Binding Effect of Plan and Injunctions......................................................    61

                  3.       Payment of U.S. Trustee Fees................................................................    62

                  4.       Retention of Jurisdiction...................................................................    62

         F.       Consulting Agreements................................................................................    63

IV.     CONFIRMATION PROCEDURES........................................................................................    63

         A.       Voting and Right to be Heard at Confirmation.........................................................    63

                  1.       Who may Support or Object to Confirmation of the Plan.......................................    63

                  2.       Who may Vote to Accept or Reject the Plan...................................................    64

                  3.       What is an Allowed Claim or Interest for Voting Purposes....................................    64

                  4.       What is an Impaired Claim...................................................................    64

                  5.       Who is not Entitled to Vote.................................................................    64

                  6.       Votes Necessary to Confirm the Plan.........................................................    65

                  7.       Request for Confirmation Despite Nonacceptance by Impaired Classes..........................    65

         B.       "Best Interests Test."...............................................................................    65

         C.       Feasibility..........................................................................................    68

         D.       Cramdown.............................................................................................    68

         E.       Risks................................................................................................    69

         F.       Effective Date.......................................................................................    69

V.     CERTAIN TAX CONSEQUENCES OF THE PLAN............................................................................    70

VI.     RECOMMENDATION AND CONCLUSION..................................................................................    70
</TABLE>

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I.       INTRODUCTION

            Windsor Woodmont Black Hawk Resort Corporation, a Colorado
corporation (the "Debtor"), filed a voluntary petition under Chapter 11 of Title
11 of the United States Code (the "Bankruptcy Code" or "Code") on November 7,
2002 (the "Petition Date"), thereby commencing Case Number 02-28089-ABC (the
"Case"), currently pending before the United States Bankruptcy Court for the
District of Colorado (the "Bankruptcy Court"). Since the Petition Date, the
Debtor has managed its affairs as a debtor and debtor in possession pursuant to
sections 1107 and 1108 of the Code.

            The Debtor is the proponent of the "Second Amended Plan of
Reorganization Proposed By Debtor Dated October 12, 2004" (the "Plan"), a copy
of which is attached as Exhibit "1" to this Disclosure Statement. [THE
BANKRUPTCY COURT HAS DETERMINED THAT THIS DISCLOSURE STATEMENT CONTAINS
"ADEQUATE INFORMATION" WITHIN THE MEANING OF CODE SECTION 1125, AND HAS
AUTHORIZED THE DEBTOR TO TRANSMIT IT TO HOLDERS OF CLAIMS AND INTERESTS IN
CONNECTION WITH THE SOLICITATION OF VOTES WITH RESPECT TO THE PLAN.](1)

            The Debtor recommends that you vote to accept the Plan because it
believes that the Plan provides the greatest possible recovery to holders of
Claims and Interests, that acceptance of the Plan is in the best interests of
all parties, and that any alternative would result in a significantly reduced
recovery to holders of Claims and Interests, as well as delay, uncertainty, and
expense. Each holder of a Claim or Interest entitled to vote on the Plan should,
however, review the Plan and Disclosure Statement, including all exhibits,
carefully and in their entirety and determine whether or not to accept or reject
the Plan based upon that creditor's independent judgment and evaluation. The
description of the Plan in this Disclosure Statement is in summary form and is
qualified by reference to the actual terms and conditions of the Plan, which
should be reviewed carefully before making a decision to accept or reject the
Plan.

            Any capitalized term not otherwise defined in this Disclosure
Statement has the meaning ascribed to it in the Plan. (See Article I.A of the
Plan - Definitions). Such definitions set forth in the Plan are incorporated in
this Disclosure Statement by this reference as though fully set

----------
(1)   Bracketed text to be inserted once Disclosure Statement is approved by the
      Bankruptcy Court.

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forth herein. To the extent that there is any inconsistency between the terms
contained herein and those contained in the Plan, the terms of the Plan shall
govern.

            The Plan, together with the Asset Purchase Agreement and the
Confirmation Order, shall constitute a "plan of reorganization" as such term is
used in Sections 354 and 361 of the Tax Code. The transactions contemplated by
the Plan, the Asset Purchase Agreement, and the Confirmation Order together
shall constitute a "reorganization" within the meaning of Section 368 of the Tax
Code.

      A. THE PURPOSE OF THIS DISCLOSURE STATEMENT.

            The Code requires that the proponent of a plan of reorganization
prepare and file with the Bankruptcy Court a "disclosure statement" that
provides information of a kind, and in sufficient detail, that would enable a
typical holder of a claim or interest in a class impaired under the plan to make
an informed judgment about the plan. This Disclosure Statement provides such
information regarding the Debtor, the Case, and the Plan, as well as information
regarding the deadlines for casting Ballots with respect to the Plan, the
deadlines for objecting to confirmation of the Plan, and the requirements that
must be satisfied in order for the Bankruptcy Court to confirm the Plan. HOLDERS
OF CLAIMS AND INTERESTS SHOULD READ THIS DISCLOSURE STATEMENT, THE PLAN, AND ALL
OF THE ACCOMPANYING EXHIBITS IN THEIR ENTIRETY IN ORDER TO ASCERTAIN:

            1.    HOW THE PLAN WILL AFFECT THEIR CLAIMS AGAINST AND INTERESTS IN
                  THE DEBTOR;

            2.    THEIR RIGHTS WITH RESPECT TO VOTING FOR OR AGAINST THE PLAN;

            3.    THEIR RIGHTS WITH RESPECT TO OBJECTING TO CONFIRMATION OF THE
                  PLAN; AND

            4.    HOW AND WHEN TO CAST A BALLOT AND/OR FILE OBJECTIONS WITH
                  RESPECT TO THE PLAN.

            This Disclosure Statement, however, cannot and does not provide
holders of Claims and Interests with legal or other advice, or inform such
parties of all aspects of their rights. HOLDERS OF CLAIMS AGAINST AND INTERESTS
IN THE DEBTOR ARE ADVISED TO CONSULT WITH THEIR LAWYERS AND/OR FINANCIAL
ADVISORS TO OBTAIN MORE SPECIFIC ADVICE REGARDING HOW THE PLAN WILL AFFECT THEM
AND REGARDING THEIR BEST COURSE OF ACTION WITH RESPECT TO THE PLAN.

            This Disclosure Statement has been prepared by the Debtor in good
faith and in compliance with applicable provisions of the Code. Based upon
information currently available, the

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Debtor believes that the information contained in this Disclosure Statement is
correct, in all material respects, as of the date of its dissemination. WITH
CERTAIN EXCEPTIONS, THE DISCLOSURE STATEMENT DOES NOT AND WILL NOT REFLECT
EVENTS THAT OCCUR AFTER THE FILING OF THE DISCLOSURE STATEMENT WITH THE
BANKRUPTCY COURT, AND, IN THE CASE OF THE FINANCIAL INFORMATION PROVIDED WITH
THIS DISCLOSURE STATEMENT, IS NECESSARILY LIMITED TO THE REPORTING PERIOD PRIOR
TO THE FILING OF THE DISCLOSURE STATEMENT WITH THE BANKRUPTCY COURT, AND THE
DEBTOR ASSUMES NO DUTY AND PRESENTLY DOES NOT INTEND TO PREPARE OR DISTRIBUTE
ANY AMENDMENTS OR SUPPLEMENTS TO REFLECT SUCH EVENTS; PROVIDED, HOWEVER, THAT
CURRENT FINANCIAL INFORMATION MAY BE PROVIDED IN CONNECTION WITH CONFIRMATION OF
THE PLAN AS REQUIRED BY THE APPLICABLE PROVISIONS OF THE CODE OR THE BANKRUPTCY
COURT.

      B. BRIEF SUMMARY OF THE PLAN.(2)

            The Plan does not contemplate the continuation of the Debtor's
business. Except as otherwise provided in the Plan and the Asset Purchase
Agreement, the Plan provides for the transfer of the Acquired Assets to
Ameristar (or its assignee) free and clear of any Claims, Liens and encumbrances
in accordance with the Asset Purchase Agreement. A copy of the Asset Purchase
Agreement is attached to the Plan as Exhibits "A" and "B" (amendment). The Plan
contemplates that the Debtor's remaining assets, other than the Ameristar Stock,
will be liquidated or otherwise reduced to cash and that the proceeds from the
transfer of the Acquired Assets (including the Ameristar Stock) and the other
assets will be distributed to the holders of various Claims and Interests to the
extent provided for in the Plan.

            The Plan also incorporates and implements (a) a settlement by and
among the Debtor, the Ad Hoc Committee and Hyatt, which is further described in
Section II.C.6.a,(3) below, (b) a settlement between the Debtor and the FF&E
Lender, which is further described in Section II.C.6.b, below, and (c) an
agreement by and between the Ad Hoc Committee and the Creditors' Committee that
provides for the treatment of Class 8A General Unsecured Creditors under the
Plan. The Plan also reflects an agreement between the Debtor and the Ad Hoc
Committee regarding the amount to be distributed in respect of Class 9A and
Class 9B Interests.

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

(2)   A more detailed description of the terms of the Plan is provided in
      Section III., below.

(3)   Unless otherwise indicated, Section references are to sections of this
      Disclosure Statement.

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            Section III.A, below, sets forth a brief summary of the
classification and voting status of Claims and Interests under the Plan. The
information set forth in the table is a summary reference only and is qualified
in its entirety by the contents of the Plan, which shall be controlling. Each
holder of a Claim or Interest is referred to the Plan annexed as Exhibit "1"
hereto for further and more detailed information regarding the classification
and treatment of Claims and Interests provided under the Plan.

      C.    SUMMARY OF ENTITIES ENTITLED TO VOTE ON THE PLAN AND OF CERTAIN
            REQUIREMENTS NECESSARY FOR CONFIRMATION OF THE PLAN.

            Only holders of allowed Claims and Interests in Classes 2, 3, 4, 5,
6, 7, 8A, 8B, 9A and 9B (collectively, the "Voting Classes"), are entitled to
vote on the Plan because such Classes are the only Classes that are "impaired"
(within the meaning of section 1124 of the Code) and that will receive or retain
property under the Plan. (Although Class 10 is impaired, holders of Interests in
this Class will receive or retain no value on account of their Class 10
Interests, and this Class is therefore deemed to reject the Plan). Class 1 is
unimpaired and therefore not entitled to vote on the Plan. Entities holding
Administrative Claims and Priority Tax Claims are not classified and are not
entitled to vote on the Plan. Any party that disputes the Debtor's
characterization of its Claim as unimpaired must, by the Ballot Deadline, obtain
a finding from the Bankruptcy Court that its Claim is impaired in order to vote
on the Plan. See Section III.A hereof for a description of the various Classes
of Claims and Interests, and of the treatment of such Claims and Interests under
the Plan, and see Section IV.A. hereof for an explanation of impairment, and the
entities that are entitled to vote on the Plan.

            The Bankruptcy Court may confirm the Plan only if at least one Class
of impaired Claims has voted to accept the Plan (without counting the votes of
any insiders whose Claims are classified within that Class), and if certain
statutory requirements are met as to both nonconsenting members within a
consenting Class and as to dissenting Classes. A Class of Claims has accepted
the Plan only when more than one-half in number and at least two-thirds in
amount of the Allowed Claims actually voting in that Class vote in favor of the
Plan. A Class of Interests has accepted the Plan only when two-thirds in amount
of the Allowed Interests actually voting in that Class vote in favor of the
Plan. See Section IV hereof for a description of other requirements for
acceptance and confirmation of the Plan.

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      D.    CONFIRMATION HEARING, VOTING PROCEDURES, BALLOTING DEADLINE, AND
            OTHER IMPORTANT DATES, DEADLINES, AND PROCEDURES.

            1. VOTING PROCEDURES AND DEADLINES.

            In voting to accept or reject the Plan, please use only the Ballot
sent to you with this Disclosure Statement, and please carefully read the voting
instructions on the Ballot for an explanation of the applicable voting
procedures and deadlines. If, after reviewing this Disclosure Statement, you
believe that you hold an impaired Claim or Interest and that you are entitled to
vote on the Plan but you did not receive a Ballot, or if your Ballot is damaged
or lost, please send a written request for a Ballot to the Ballot Tabulator at
the address set forth below.

            Any holder of a Claim or Interest in a Voting Class who wants to
vote to accept or reject the Plan must complete the enclosed Ballot and return
it to Ms. Lori Gauthier, Paralegal, Irell & Manella LLP, 840 Newport Center
Drive, Suite 400, Newport Beach, California 92660; facsimile: (949) 760-5200
(the "Ballot Tabulator"), so that it is actually received by the Ballot
Tabulator no later than the Ballot Deadline (as defined below). Ballots cast by
facsimile will be counted. Ballots cast by e-mail will not be counted. Ballots
do not constitute proofs of claim or interest, or amendments to proofs of claim
or interest.

            ALL BALLOTS MUST BE SIGNED AND BE RETURNED TO AND ACTUALLY RECEIVED
BY THE BALLOT TABULATOR BY NO LATER THAN NOVEMBER 18, 2004 AT 4:00 P.M. PACIFIC
TIME (THE "BALLOT DEADLINE"). BALLOTS RECEIVED AFTER THE BALLOT DEADLINE, AND
BALLOTS SENT DIRECTLY TO THE DEBTOR, THE BANKRUPTCY COURT, OR ANY PERSON OR
ENTITY OTHER THAN THE BALLOT TABULATOR, WILL NOT BE COUNTED IN CONNECTION WITH
CONFIRMATION OF THE PLAN.

            2. DATE OF THE CONFIRMATION HEARING AND DEADLINES FOR OBJECTIONS TO
               CONFIRMATION OF THE PLAN.

            The hearing to determine whether the Bankruptcy Court will confirm
the Plan (the "Confirmation Hearing") will commence on December 13, 2004 at 9:00
a.m. (Colorado time) in the Courtroom of the Honorable A. Bruce Campbell, United
States Bankruptcy Judge for the District of Colorado, Courtroom C, United States
Bankruptcy Court, United States Custom House, 721 19th Street, Denver, Colorado.
The Confirmation Hearing may be continued from time to time by

                                       5

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announcement in open Court, without further notice.

            Any objections to confirmation must be filed with the Bankruptcy
Court and served on the following entities by no later than November 15, 2004:
(a) Windsor Woodmont Black Hawk Resort Corporation, 111 Richman Street, Black
Hawk, Colorado 80422, Attention: Timothy G. Rose and Michael L. Armstrong; (b)
Irell & Manella LLP, 840 Newport Center Drive, Suite 400, Newport Beach,
California 92660, Attention: William N. Lobel, Esq. and Albert Choi, Esq.; (c)
Rubner Padjen Plotkin and Laufer LLC, 1600 Broadway, Suite 2600, Denver,
Colorado 80202, Attention: Paul Rubner, Esq. and Joel Laufer, Esq.; (d) Klee,
Tuchin, Bogdanoff & Stern LLP, Fox Plaza, 2121 Avenue of the Stars, 33rd Floor,
Los Angeles, California 90067-5061, Attention: Michael Tuchin, Esq. and David
Fidler, Esq.; (e) Linquist & Vennum, 600 17th Street, S., Suite 2125, Denver, CO
80202, Attention Craig Christensen, Esq.; (f) The Office of the United States
Trustee, 999 18th Street, Suite 1551, Denver, CO 80202, Attention: Joanne
Speirs, Esq., (g) Pachulski, Stang, Ziehl, Young, Jones & Weintraub, 10100 Santa
Monica Blvd., 11th Floor, Santa Monica, California 90067, Attention: Thomsen
Young, Esq.; (h) Connolly, Rosania & Lofstedt, P.C., 390 Interlocken Crescent,
Suite 490, Broomfield, CO 80021, Attention: Joseph G. Rosania, Esq.; and (i)
Gibson, Dunn & Crutcher LLP, 4 Park Plaza, Suite 1500, Irvine, CA 92614,
Attention: Oscar Garza, Esq. PLEASE REFER TO THE ACCOMPANYING NOTICE OF THE
CONFIRMATION HEARING FOR SPECIFIC REQUIREMENTS REGARDING THE FORM AND NATURE OF
OBJECTIONS TO CONFIRMATION OF THE PLAN.

      E.    IMPORTANT NOTICES AND CAUTIONARY STATEMENTS.

            No representations concerning the Plan are authorized by the Debtor
other than those set forth in this Disclosure Statement. The information
contained in this Disclosure Statement has been provided by the Debtor from the
Debtor's books and records and from other sources. In reaching your decision on
how to vote on the Plan, the Debtor recommends that you not rely on any
representation or inducement made to secure your acceptance or rejection of the
Plan that is not contained in this Disclosure Statement or in the Plan itself.

            Certain directors, officers, attorneys, accountants, financial
advisors and other professionals employed by the Debtor have assisted in the
preparation of this Disclosure Statement based upon factual information and
assumptions respecting financial, business, and accounting data

                                       6

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provided by the Debtor and third parties. While those directors, officers and
third parties who have contributed to this Disclosure Statement have used their
best efforts to ensure the accuracy of the Disclosure Statement and the data
presented herein, they have not independently verified such information and the
representations made herein are solely the representations of the Debtor, and
are not representations made individually by such directors, officers and/or
third parties.

            This Disclosure Statement may not be relied upon for any purpose
other than to determine how to vote on the Plan. Nothing contained in this
Disclosure Statement shall be deemed advice on the tax or other legal effects of
the Plan on holders of Claims or Interests. Holders of Claims or Interests
should consult their personal counsel or tax advisor on any questions or
concerns respecting tax or other legal consequences of the Plan.

            The financial data relied upon in formulating the Plan is based on
the Debtor's books and records, including the Debtor's audited financial
statements prepared in accordance with GAAP and the reporting requirements of
the Securities and Exchange Commission. The Debtor represents that everything
stated in this Disclosure Statement is true to its best knowledge. The Debtor
does not represent, however, that everything stated in this Disclosure Statement
is without any inaccuracy.

            CAUTIONARY STATEMENT:

            Certain information included in this Disclosure Statement and its
exhibits, including information about Ameristar, contains forward looking
statements within the meaning of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended. Such forward looking statements are
based on information available when such statements are made, and concern future
results, the occurrence of which involves risks and uncertainties that could
cause actual results to differ materially from those predicted in the
statements. With respect to Ameristar, please consult Ameristar's Form 10-Q (for
the quarterly period ended June 30, 2004) and Form 10-K (for the fiscal year
ended December 31, 2003) filed by Ameristar with the U.S. Securities and
Exchange Commission, which are attached hereto as Exhibits "4" and "5,"
respectively, for information about forward looking statements pertaining to
Ameristar.

      F. ADDITIONAL INFORMATION.

            If you have any questions about the procedures for voting on the
Plan, desire another

                                       7

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copy of a Ballot, or seek further information about the timing and deadlines
with respect to confirmation of the Plan, please write to the Ballot Tabulator.
The Ballot Tabulator, however, cannot and will not provide holders of Claims or
Interests with any advice, including advice regarding how to vote on the Plan,
or the legal effect that confirmation of the Plan will have upon Claims against
or Interests in the Debtor. An inquiry to the Ballot Tabulator will not change
the Ballot Deadline.

            As provided in the Plan, material modifications to the Plan,
exhibits to the Plan or documents related to the Plan may be made. Finally, all
pleadings filed in the Case are on file with the Clerk of the Bankruptcy Court
and available for review during normal business hours. Written requests for a
copy of any specific pleading or document may also be made to the Ballot
Tabulator.

            Approval of this Disclosure Statement is not a determination as to
whether or not the Plan is confirmable and is not a recommendation by the Court
as to whether or not you should support or oppose the Plan.

II. BACKGROUND INFORMATION

      A. THE DEBTOR'S PRE-PETITION BUSINESS AND OPERATIONS.

            1. GENERAL BACKGROUND.

            The Debtor is the developer and owner of what was known, prior to
May 14, 2003, as the Black Hawk Casino by Hyatt (the "Casino") located in Black
Hawk, Colorado.(4) The Casino, which opened for business on December 20, 2001,
is an upscale, integrated limited stakes gaming casino, entertainment and
parking facility. The Casino is the largest casino in Black Hawk, with
approximately 425,000 square feet, 57,000 square feet of which is used for
gaming. The Casino also features more gaming machines than any other casino in
Black Hawk. The interior decor of the Casino resembles the Rocky Mountain
surroundings and uses rocks, wood, and landscapes natural to Colorado as part of
the interior design.

            The Casino provides patrons with a broad selection of gaming
activities, lounges,

-----------
(4)   As discussed below, as of May 14, 2003, the Debtor took over management of
the Casino from Hyatt. The Casino is now known as the Mountain High Casino.

                                       8

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dining options, and entertainment areas. The dining options at the Casino range
from a steak house to a high quality buffet, and include a food court featuring
various quick service food offerings. The Casino has an approximately 300,000
square foot parking garage, with the capacity to park approximately 800 vehicles
in covered parking spaces. It also has 650 adjacent valet spaces, and is able to
accommodate buses and motor coaches.

            From its opening until May 14, 2003, the Casino was operated and
managed by Hyatt pursuant to a professional management agreement.

            At the time of the construction of the Casino, the Debtor also
commenced preliminary construction of a hotel site adjacent to the Casino. In
addition to the hotel site, the Debtor owns approximately 79 acres of
commercially zoned unimproved land located across the street from the Casino,
which is not utilized in the operation of the Casino.

            2. THE DEBTOR'S DEBT STRUCTURE.

                  a. THE BLACK HAWK BID BONDS.

            In connection with the development of the Casino, in December 2001,
the Debtor obtained $3,000,000 from a municipal bond issue (the "Black Hawk BID
Bonds") issued by the Black Hawk Business Improvement District (the "Black Hawk
BID"). The Black Hawk BID Bonds are in the form of (1) a $975,000 issue bearing
6% interest, due December 1, 2005, and (2) a $2,025,000 issue bearing 6.75%
interest due December 1, 2011. The Black Hawk BID Bonds provide for payment by
the Debtor in semi-annual payments of $211,083. Since the initial issuance of
the Black Hawk BID Bonds in December 2001, the Debtor has remained current on
its payments to the Black Hawk BID and is not otherwise in default in connection
therewith.

            As of the Petition Date, the Debtor's Schedules reflect that the
balance outstanding on the Black Hawk BID Bonds was $2,803,609.46, including
accrued interest.

            As of the Effective Date, the Debtor estimates that the balance
outstanding on the Black Hawk BID Bonds will be approximately $2,332,031.98
($2,305,138.70 in principal and $26,893.28 in accrued interest).(5)

--------------
(5)   Assumes an Effective Date of December 1, 2004. To the extent the Effective
Date occurs on a different date, the actual amounts could differ significantly
from the amounts set forth herein.

                                       9

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                  b. THE FF&E LOAN.

            On October 2, 2001, the Debtor and Wells Fargo Bank, National
Association ("Wells Fargo"), as agent and lender, entered into a loan agreement
referencing a loan in the original principal amount of $20,800,000 (the "FF&E
Loan"). On October 2, 2001, the Debtor executed a Promissory Note in the
original principal amount of $20,800,000 (the "FF&E Note"), and a Security
Agreement and UCC Financing Statements granting to Wells Fargo a first-priority
security interest in certain personal property of the Debtor as set forth in
detail in the Security Agreement and UCC Financing Statements to secure
repayment of the Loan, including, without limitation, the furniture, fixtures
and equipment (including gaming equipment) (the "FF&E") purchased with the
proceeds of the FF&E Loan (the "FF&E Security"). The FF&E Security likewise
includes all proceeds and products of the FF&E, but specifically excludes gaming
revenues realized from the use and operation of the gaming equipment. On or
about May 31, 2002, Wells Fargo and David R. Belding (the "FF&E Lender") entered
into an Assignment, Assumption and Consent Agreement, pursuant to which Wells
Fargo assigned one hundred percent (100%) of its interest in the FF&E Loan to
the FF&E Lender. The maturity date of the FF&E Loan is January 1, 2005.

            As of the Petition Date, the Debtor's Schedules reflect that the
balance outstanding on the FF&E Loan was $17,806,644.19. As of the Petition
Date, the FF&E Lender asserts that the balance outstanding on the FF&E Loan was
$17,808,125.50.

            As of the Effective Date, by virtue of the payments made to the FF&E
Lender during the Case pursuant to agreements entered into with the FF&E Lender
(as described in detail in Section II.C.6.b herein), the Debtor estimates that
the balance outstanding on the FF&E Loan will be approximately $7,500,000.(6)

                  c. THE FIRST MORTGAGE NOTES.

            On March 14, 2000, the Debtor and SunTrust Bank, as trustee (the
"Indenture Trustee"), entered into the First Mortgage Indenture, pursuant to
which the Debtor issued its 13% First Mortgage Notes with a maturity date of
March 15, 2005, in the aggregate principal amount of

----------------
(6)   Assumes an Effective Date of December 1, 2004. To the extent the Effective
Date occurs on a different date, the actual amounts could differ significantly
from the amounts set forth herein.

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$100 million (the "First Mortgage Notes"). The First Mortgage Notes are secured
by a first-priority lien on substantially all of the Debtor's assets, but
specifically excluding, (1) the FF&E acquired under the FF&E Loan,(7) (2) gaming
licenses, (3) liquor licenses, and (4) gaming devices (to the extent that gaming
laws prohibit the granting of a security interest therein). The First Mortgage
Notes are publicly traded obligations, with interest due to be paid in
semi-annual installments, until the maturity date of the First Mortgage Notes,
when all principal and unpaid interest is then due and payable.

            Pursuant to the Plan, the holders of the First Mortgage Notes will
hold an Allowed Claim in the amount of $107,400,000.00, plus interest and
reasonable fees, costs and charges to the extent permitted by Bankruptcy Code
section 506(b).

                  d. THE SECOND MORTGAGE NOTE.

            On March 14, 2000, Hyatt made a loan to the Debtor in the original
principal amount of $7.5 million for the purpose of financing a portion of the
construction and development of the Casino (the "Second Mortgage Note"). The
Second Mortgage Note states that it is secured by a second-priority lien on the
assets securing the First Mortgage Notes. The maturity date of the Second
Mortgage Note is March 15, 2010.

            As of the Petition Date, the Debtor's Schedules reflect that the
balance outstanding on the Second Mortgage Note was $10,740,520.40, including
accrued interest. As of the Petition Date, Hyatt asserted that the balance
outstanding on the Second Mortgage Note was $11,702,794.65.

            Pursuant to the Original Hyatt Settlement Agreement (discussed
below), the amount due under the Second Mortgage Note was fixed at
$10,877,790.74 and was allowed as part of Hyatt's Unsecured Claim in the total
amount of $18,413,243.68. As also discussed below, subsequently the Debtor, the
Ad Hoc Committee (and its members) and Hyatt entered the Hyatt Settlement
Agreement, pursuant to which Hyatt agreed to specific treatment under the Plan
as described therein. A copy of the Hyatt Settlement Agreement is attached to
the Plan as Exhibit "E."

-------------
(7)   Pursuant to the terms of the First Mortgage Deed of Trust, the FF&E
becomes part of the collateral securing the First Mortgage Notes once the FF&E
Loan has been repaid, satisfied or terminated.

                                       11

<PAGE>

            3. THE DEBTOR'S EQUITY STRUCTURE

                  a. PREFERRED STOCK INTERESTS.

            The Debtor has issued 29,000 shares of its preferred stock as
"Series A" preferred stock and 30,000 shares of its preferred stock as "Series
B" preferred stock. The holders of both the Series A and Series B preferred
stock have no voting rights.

            The Series B preferred stock is non-convertible, accrues dividends
on a cumulative basis compounding quarterly at a rate of 7% per annum, and ranks
senior to the Series A preferred stock and the Existing Common Stock with
respect to dividend distributions and distributions upon the liquidation of the
Debtor. The Series B preferred stock has a liquidation preference entitling
holders of such stock to payment of the Series B original issue price plus,
without duplication, an amount equal to all accumulated and unpaid dividends
thereon, if any, to but excluding the date fixed for liquidation or dissolution,
before any payment is made to any holders of Existing Common Stock or holders of
Series A preferred stock.

            Based on its books and records, the Debtor believes that the
following seven (7) entities hold Series B preferred stock: (i) Madeleine,
L.L.C., (ii) Ravich Children Permanent Trust, dated May 11, 1995, (iii) TCW
Shared Opportunity Fund II, L.P., (iv) John G. Popp, (v) John L. Sabre, (vi)
Alexander L. Bolen and (vii) Andrew H. Marshak. The Debtor believes that certain
of these Interest holders may be affiliates or otherwise related to certain
First Mortgage Noteholders. These Interest holders acquired their Interests in
the Debtor pursuant to a stock purchase agreement dated as of March 14, 2000.

            The Series A preferred stock is non-convertible, accrues cumulative,
non-compounding dividends at the rate of 11% per annum, and ranks senior to the
Existing Common Stock with respect to dividend distributions and distributions
upon the liquidation of the Debtor. The Series A preferred stock has a
liquidation preference entitling holders of such stock to payment of the Series
A original issue price plus, without duplication, an amount equal to all
accumulated and unpaid dividends thereon, if any, to but excluding the date
fixed for liquidation or dissolution, before any payment is made to on any
holders of Existing Common Stock.

            Based on its books and records, the Debtor believes that there are
only two holders of

                                       12

<PAGE>

Series A preferred stock: (i) Daniel P. Robinowitz and (ii) Christiania Limited
Partnership ("CLP"). The Debtor believes that CLP is affiliated with or
otherwise related to Steelman.

                  b. COMMON STOCK INTERESTS.

            The Debtor has 10,000,000 shares of Existing Common Stock
authorized, and 1,000,000 shares of Existing Common Stock outstanding. The
Debtor's Existing Common Stock is not publicly traded. The following is a list
of the Debtor's Interest holders owning 5% or more of Debtor's outstanding
Existing Common Stock, as well as the officers and directors of the Debtor who
are also holders of the Debtor's outstanding Existing Common Stock, and the
number of shares and percentage holdings for each such Interest holder:

<TABLE>
<CAPTION>
                                                                                NUMBER OF    PERCENTAGE
          OWNER                                       TITLE                      SHARES      OWNERSHIP
          -----                                       -----                      ------      ---------
<S>                                 <C>                                         <C>          <C>
AMR 21st Century Trust              Stockholder, Donald J. Malouf, Trustee       77,292.5     7.72925%
APR 21st Century Trust              Stockholder, Donald J. Malouf, Trustee       77,292.5     7.72925%
Patricia Deal                       Individual                                     83,602      8.3602%
John M. Utley and Katherine J
Utley                               Individuals                                    60,000        6.00%
Jerry L. Dauderman                  Director/Chairman/CEO                          78,792      7.8792%
Timothy G. Rose                     Director/President/COO                         30,171      3.0171%
Michael L. Armstrong                Executive VP/CFO/ Secretary/Treasurer          15,000         1.5%
Irving C. Deal                      Director                                       12,000         1.2%
Garry W. Saunders                   Director                                       10,000         1.0%
</TABLE>

            The other holders of the Debtor's Existing Common Stock collectively
own the remaining 55.5850% of the Debtor's outstanding Existing Common Stock,
with no individual holder owning more than 5% of such stock.

            In addition, the Debtor granted options and issued warrants as
follows:

            First, on April 14, 2000, the Debtor instituted a stock incentive
plan for its directors and key employees that provided for the grant of options
to purchase an aggregate of not more than

                                       13

<PAGE>

150,000 shares of the Debtor's Existing Common Stock (the "2000 Stock Incentive
Plan"). During 2000 and 2001, the Debtor granted options to purchase 150,000
shares of Existing Common Stock to its directors and key employees. On January
28, 2003, the Debtor cancelled these options subject to an agreement to reissue
the options 6 months and one day later at the then current fair market value.
The Debtor did not seek Court approval of this cancellation and reissuance
agreement as the Debtor did not believe such Court approval was necessary.

            Second, on March 14, 2000, the Debtor entered into a First Warrant
Agreement, pursuant to which the following warrant shares of the Debtor's
Existing Common Stock, with a per share par value of $0.01, were issued: (a)
342,744 warrant shares to parties purchasing units of the First Mortgage Notes;
(b) 33,887 warrant shares to Hyatt in connection with the Second Mortgage Note;
and (c) 80,031 warrant shares to U.S. Bancorp Libra for acting as placement
agent.

            Third, on March 14, 2000, the Debtor entered into a Second Warrant
Agreement, pursuant to which 257,058 warrant shares of the Debtor's Existing
Common Stock, with a per share par value of $0.01, were issued to the parties
purchasing shares of the Debtor's Series B preferred stock.

            Finally, on March 25, 2002, the Debtor instituted a stock incentive
plan for its directors and key employees that provided for the grant of options
to purchase an aggregate of not more than 45,000 shares of the Debtor's Existing
Common Stock (the "2002 Stock Incentive Plan"). To date, there have been no
options granted under the 2002 Stock Incentive Plan. However, options to
purchase 15,000 shares of Existing Common Stock have been committed to Sean
Sullivan, the new general manager of the Casino, and options to purchase 5,000
shares of the Debtor's Existing Common Stock have been committed to Brenda
Sanchez, the new assistant general manager of the Casino, in connection with
their compensation packages.

            Pursuant to the Plan, all of the Debtor's Existing Common Stock will
be cancelled on the Effective Date and no holder of Existing Common Stock will
receive or retain any value in respect of these Interests.

                                       14

<PAGE>

            4.    THE DEBTOR'S FINANCIAL DIFFICULTIES AND THE EVENTS LEADING TO
                  THE COMMENCEMENT OF THE CHAPTER 11 CASE.

            During 2002 (the Casino's first full year of operation since its
opening on December 20, 2001), the Debtor generated less revenue and experienced
higher expenses than had been anticipated, which resulted in the inability of
the Debtor to meet its financial obligations.

            Several factors contributed to the Debtor's financial problems,
including the general downturn in the Colorado economy. In its first 10 months
of operation, the Debtor was unable to generate projected gaming revenues, nor
did it achieve industry standard operating and profit margins. The Debtor
generated revenues (net of payments of winnings to players at the Casino) of
approximately $51.7 million from the operation of the Casino for the nine months
ended September 2002. These revenues were generated primarily through the
Casino's gaming, food and beverage operations. At the month ending September 30,
2002, on a GAAP cost basis, the Debtor had consolidated assets of approximately
$139.5 million and consolidated liabilities of approximately $152.7 million.

            As a result of the lower than projected revenues, the Debtor first
delayed, and then was unable to make certain required payments to its secured
creditors. Under the terms of the First Mortgage Notes and the Second Mortgage
Note, the Debtor deferred the September 15, 2002 interest payments until October
15, 2002. The failure to pay the interest on the First Mortgage Notes and the
Second Mortgage Note due on October 15, 2002 constituted an "Event of Default"
under the applicable agreements. On October 23, 2002, the Debtor received notice
from the Indenture Trustee, pursuant to the terms of the First Mortgage
Indenture, that the First Mortgage Notes were due and payable immediately.

            On November 1, 2002, the Indenture Trustee obtained an order from
the Gilpin County District Court appointing Cordes & Company as a receiver over
the Debtor's property (the "Receiver").

      B. THE COMMENCEMENT OF THE CASE.

            As a result of the foregoing, on November 7, 2002 (the "Petition
Date"), the Debtor commenced the Case. As of the Petition Date, the Bankruptcy
Court assumed jurisdiction over the Debtor's assets and liabilities, and, with
the exception of certain cash that the Receiver continued to hold for a period
of time, the Receiver returned the Debtor's property to the Estate.

                                       15

<PAGE>

      C. SIGNIFICANT EVENTS SINCE THE COMMENCEMENT OF THE CASE.

            1.    REJECTION OF THE HYATT MANAGEMENT AGREEMENT AND POST-PETITION
                  MANAGEMENT OF THE CASINO.

            As discussed above, on the Petition Date, the Casino was being
operated and managed by Hyatt pursuant to the Debtor's management agreement with
Hyatt. After negotiations with Hyatt relative to its ongoing management of the
Casino proved unsuccessful, on December 23, 2002, as part of the Debtor's
reorganization effort to improve business discipline and reduce its cost
structure, the Debtor filed a motion to reject the Hyatt management agreement
(the "Hyatt Rejection Motion"). The Hyatt Rejection Motion was opposed by Hyatt,
the Ad Hoc Committee, the Indenture Trustee and PCL and was set for a two-day
evidentiary hearing in early April 2003. Just prior to the trial on the Hyatt
Rejection Motion, the Debtor and Hyatt reached an agreement in principle
resolving the disputes between them.

            On April 10, 2003, the Debtor executed a settlement agreement with
Hyatt (the "Original Hyatt Settlement Agreement"), which provided for the
rejection of the Hyatt management agreement, the transition of management of the
Casino to the Debtor, and the fixing of the amount and priority of Hyatt's
Claims in the Case (including the Claims based on the rejection of the
management agreement). On April 25, 2003, the Bankruptcy Court entered an order
approving the Original Hyatt Settlement Agreement.

            Pursuant to the Original Hyatt Settlement Agreement, and a
stipulation in connection therewith, the "Rejection Date" and the transition of
the management of the Casino from Hyatt to the Debtor occurred on May 14, 2003.

            The Casino is now known as the Mountain High Casino. The Debtor
retained Sean Sullivan, a respected and experienced gaming manager, as the new
general manager to manage the Casino. In addition, the Debtor retained the
majority of the Casino line employees previously employed by Hyatt. The Debtor's
prior management - Jerry L. Dauderman, Timothy G. Rose and Michael L. Armstrong
- continued to remain in management positions with the Debtor. As manager of the
Casino, the Debtor implemented numerous cost-saving and revenue enhancing
programs.

            On May 24, 2003, the Debtor held its "Grand Opening" as the Mountain
High Casino.

                                       16

<PAGE>

Under the Debtor's management, the Mountain High Casino opened with a new gaming
layout, new and upgraded slot machines, a significantly looser slot hold and an
"All Star" staff. The grand opening festivities featured appearances by renowned
television game show host and producer Bob Eubanks and World Series Poker
Champion and gambling legend Amarillo Slim. The Casino was visited by
approximately 20,000 guests over the Memorial Day Grand Opening weekend and
posted record-breaking revenues.

            2. DETERMINATIONS AND AGREEMENTS REGARDING CASH COLLATERAL.

            On December 6, 2002, the Debtor filed a motion for a determination
that the cash generated by the Debtor after the Petition Date was not the cash
collateral of the Debtors' secured lenders or, alternatively, for authority to
use cash collateral (the "Cash Collateral Motion"). Objections to the Cash
Collateral Motion were filed by the Ad Hoc Committee (with the Indenture Trustee
and Hyatt joining in the Ad Hoc Committee's objection), the FF&E Lender, and by
the City of Black Hawk (the City of Black Hawk and the FF&E Lender later
withdrew their objections). After a hearing on January 13, 2003, the Bankruptcy
Court determined that none of the Debtor's post-petition gaming revenues were
the cash collateral of the Debtor's secured lenders.

            3. RECEIVER'S PAYMENT OF CLAIMS.

            As of the Petition Date, the Receiver held cash of the Debtor in the
amount of $3,027,166. After the Petition Date, the Receiver estimated that it
would only need to reserve $2,042,171 for taxes and expenses, and returned
$984,995 to the Debtor.

            On November 14, 2002, the Receiver filed a motion with the
Bankruptcy Court seeking approval to pay certain pre-petition claims of the
Debtor's vendors. After discussion with the Debtor, the Receiver agreed to
significantly reduce the amount of cash that the Receiver held in reserve, and
the parties agreed on, and the Bankruptcy Court approved, payments to vendors
totaling $198,080. On February 28, 2003, the Receiver disbursed an additional
$75,000 in excess funds to the Debtor.

            On May 7, 2003, the Receiver submitted its final report and
accounting to the Bankruptcy Court for approval (which report was thereafter
amended). On June 23, 2003, the Bankruptcy Court entered its order approving the
Receiver's amended final report and accounting. The Bankruptcy Court also
authorized the payment of the Receiver's fees in the amount of

                                       17

<PAGE>

$35,190.32 and expenses in the amount of $2,265.41, and payment of the
Receiver's attorneys' fees in the amount of $23,173.50 and expenses in the
amount of $1,111.86.

            4. RETENTION OF PROFESSIONALS AND APPOINTMENT OF THE CREDITORS'
               COMMITTEE.

            Following the Petition Date, the Debtor obtained Bankruptcy Court
approval to retain the following professionals: (a) Irell & Manella LLP, as the
Debtor's reorganization counsel; (b) Rubner Padjen Plotkin and Laufer LLC, as
the Debtor's local reorganization counsel; (c) Alvarez & Marsal, as the Debtor's
financial advisors; (d) Holley, Albertson & Polk, as the Debtor's outside
general counsel; (e) Grant Thornton, as tax preparers and auditors to the
Debtor; (f) Dill and Dill, as special litigation counsel to the Debtor; (g)
Schlueter & Associates, as the Debtor's securities counsel; (h) Saul Leonard, as
litigation consultant in connection with the Hyatt matters, and (i) FTI
Consulting as litigation consultant and plan advisor to the Debtor.

            Pursuant to Code Section 1102, the U.S. Trustee also appointed the
Creditors' Committee, which currently consists of the following creditors:
Lombardi Brothers Meat Packers, Inc.; International Game Technology; Midwest
Chemical & Supply; Jet Lithocolor, Inc.; U.S. Foods Service Inc.; and Parker
Blake Inc. The Creditors' Committee thereafter obtained Bankruptcy Court
approval to employ Pachulski, Stang, Ziehl, Young, Jones and Weintraub P.C. as
its counsel and Connolly, Rosania and Lofstedt P.C. as its local counsel.

            5. TRANSFER OF THE DEBTOR'S ASSETS.

            On August 6, 2003, the Debtor filed a plan of reorganization and
disclosure statement that provided for an internal reorganization, which would
have resulted in the Debtor emerging from chapter 11 with approximately $150
million in liabilities (the "Original Plan"). Under the Original Plan, the
classes of holders of preferred stock and common stock Interests in the Debtor
were unimpaired, and the legal, equitable, or contractual rights of such holders
were not affected. Facing opposition to the Original Plan (and the first amended
plan and disclosure statement, filed on November 20, 2003) from several creditor
constituencies (including the Indenture Trustee and the Ad Hoc Committee), the
Debtor, in good faith, negotiated and worked with the Ad Hoc Committee and the
Debtor's other creditors with respect to potential alternatives to the Original
Plan, including a sale of the Debtor's assets to a third party.

                                       18

<PAGE>

                  a. EFFORTS TO MARKET AND SELL THE PROPERTY.

            At the time the Debtor filed the Original Plan, the Ad Hoc Committee
had already been exploring a possible sale of the Debtor's assets. To this end,
in September 2003, the Ad Hoc Committee directed CIBC World Markets ("CIBC"),
financial advisors to the Ad Hoc Committee, to develop a list of potential
purchasers of the Debtor's assets. Drawing on its comprehensive database of
companies with experience in the gaming industry, CIBC identified potential
purchasers based on such criteria as: (1) experience in the gaming industry, (2)
financial ability to purchase the Debtor's assets, and (3) ability to obtain a
gaming license. Based on its extensive experience in the gaming industry, CIBC
identified 16 potential qualified purchasers. CIBC thereafter developed an
information package regarding the Debtor and its operations and approached these
16 potential purchasers to discuss a potential sale. This effort resulted in a
series of face-to-face and telephonic meetings between CIBC and 10 potential
purchasers who expressed interest. In November and December of 2003, CIBC
received informal acquisition proposals from two of these parties. CIBC
negotiated certain terms of sale with these purchasers as well as continued to
discuss the sale of the Debtor's assets with other interested parties.

            In March 2004, after consulting with CIBC regarding its marketing
efforts and acquisition proposals, and after due consideration of the Debtor's
own efforts and inquiries to potential purchasers regarding the sale of its
assets, the Debtor, in the exercise of its business judgment, determined that
the best way to maximize value for the benefit of the Estate and its creditors
was to sell substantially all of its assets, and implement such sale under a
plan of reorganization.

            The Debtor, with the agreement of CIBC and the Ad Hoc Committee,
determined that the best way to both maximize value and to provide for a speedy
resolution of this Case was to focus on qualified purchasers who had previously
expressed an interest in purchasing the Debtor's assets and provide them with a
draft asset purchase agreement and access to an electronic data room that would
provide potential purchasers with 24 hour unfettered access to relevant
documents and data. In order to protect the Debtor's confidential and
proprietary information, access to the electronic data room was restricted to
parties who executed a non-disclosure agreement. Five potential purchasers
executed the non-disclosure agreement and began their due diligence. The
deadline for the

                                       19

<PAGE>

submission of purchase offers was set for April 30, 2004.

            On April 30, 2004, three bidders submitted asset purchase
agreements. One of the bids was markedly lower than the bids submitted by the
other two bidders. CIBC informed the lowest bidder that it would have to
increase its bid to participate further. The lowest bidder indicated that it
would not increase its bid and was removed from consideration.

            The Debtor, the Ad Hoc Committee and CIBC then engaged in
comprehensive negotiations with the two remaining bidders in an effort to
improve the terms of the bids and thereby maximize value for the Debtor's
creditors and the Estate. After approximately one month of negotiations with
these two bidders, the Debtor, the Ad Hoc Committee and CIBC determined that the
bid submitted by Ameristar was the most favorable. The Debtor and Ameristar
thereafter executed the Asset Purchase Agreement, a copy of which is attached as
Exhibit "A" to the Plan. This agreement, before it was amended, included a
contingent purchase price element, a portion of which was expected to be
distributed to holders of Class 9A and Class 9B Interests. The Asset Purchase
Agreement was thereafter amended by that "Amendment to Asset Purchase
Agreement," dated as of August 3, 2004, a copy of which is attached as Exhibit
"B" to the Plan. Under the amended Asset Purchase Agreement, the cash portion of
the consideration from Ameristar was increased and the contingent element that
was expected to be paid to the holders of Class 9A and Class 9B Interests became
fixed at an amount that is less than the maximum contingent amounts, but greater
than the minimum contingent amounts, that were payable prior to the amendment.

            Given the extensive marketing process conducted by the parties, and
the quality of Ameristar's bid for the Debtor's assets, the Debtor, with the
input of major constituencies in the Case, has determined that the transfer of
the Acquired Assets pursuant to the terms of the Asset Purchase Agreement is the
best way to maximize value for the benefit of the Debtor's creditors and
shareholders and the Estate.

                  b. THE ASSET PURCHASE AGREEMENT.

            The Asset Purchase Agreement provides for the transfer of the
Acquired Assets (which includes the Casino and substantially all of the
remaining assets of the Debtor) to Ameristar (or its assignee). Subject to the
terms of the Asset Purchase Agreement, Ameristar agreed to

                                       20

<PAGE>

provide, among other things, the following consideration for the Acquired
Assets: (a) cash in the amount of $117,000,000 (subject to adjustment as
provided for in the Asset Purchase Agreement); $2.5 million in Ameristar Stock;
and (c) the assumption of certain liabilities including, but not limited to, all
liabilities and obligations of the Debtor arising under and related to municipal
bonds issued by the Black Hawk BID, all casino liabilities to the Debtor's
gaming patrons and all liabilities of the Debtor for unused vacation, sick pay,
holiday pay and paid time off as of the Closing Date for all employees hired by
Ameristar.

            Among the conditions to consummating the Asset Purchase Agreement
was the entry of an order approving certain buyer protections (including,
without limitation, a break-up fee and overbid protections) in favor of
Ameristar. On June 1, 2004, the Debtor filed and served its Motion for Order
Approving Certain Buyer Protections in Connection with the Sale of the Debtor's
Assets through a Plan of Reorganization (the "Buyer Protection Motion"). The
Buyer Protection Motion was heard by the Court on June 18, 2004. The Order
Granting the Buyer Protection Motion was entered on June 18, 2004. Consummation
of the Asset Purchase Agreement is also conditioned on confirmation of the Plan.

                  c. THE AMERISTAR STOCK ISSUANCE.

            The Ameristar Stock will be issued to the holders of Class 9A and
Class 9B Interests in accordance with the terms and conditions of the Asset
Purchase Agreement. The parties expect that the issuance of the Ameristar Stock
under the Plan will be exempt from registration under the Securities Act
pursuant to Section 1145(a) of the Bankruptcy Code, based on the fact that the
Ameristar Stock will be issued under the Plan, once approved by the Court; the
stock will be offered in exchange for Interests in the Debtor; and Ameristar
will be a "successor" to the Debtor, for purposes of Section 1145 of the
Bankruptcy Code, in that it is purchasing substantially all of the Debtor's
assets and assuming various post-closing liabilities and obligations with
respect to the assets purchased. Alternatively, the Ameristar Stock may be
issued to the holders of Class 9A and Class 9B Interests pursuant to another
available exemption from registration, and Ameristar may elect to register the
Ameristar Stock pursuant to a resale registration statement under Rule 415 of
the Securities Act.

                                       21

<PAGE>

                  d. INFORMATION ABOUT AMERISTAR.

            Ameristar is a publicly traded company (NASDAQ: ASCA) that is
headquartered in Las Vegas, Nevada. Ameristar is a leading developer, owner, and
operator of casinos and related entertainment facilities in local and regional
markets. Ameristar, through its wholly owned subsidiaries, owns and operates six
casino properties in five markets. The company's portfolio of casinos consists
of: Ameristar St. Charles (serving the greater St. Louis, Missouri area);
Ameristar Kansas City (serving the Kansas City, Missouri metropolitan area);
Ameristar Council Bluffs (serving Omaha, Nebraska and southwestern Iowa);
Ameristar Vicksburg (serving Jackson, Mississippi, and Monroe, Louisiana); and
Cactus Petes and The Horseshu in Jackpot, Nevada (serving Idaho and the Pacific
Northwest). Ameristar's properties exemplify high-quality design and
construction and offer outstanding dining, lodging, and entertainment options
along with the most current gaming technology. As of March 1, 2004, Ameristar
employed approximately 7,050 employees.

            Ameristar's consolidated net revenues for the year ended December
31, 2003, were $782.0 million compared to $698.0 million for 2002, an increase
of 12.0% over the prior year. Additionally, in 2003 Ameristar achieved the
highest market share in each of the markets in which it operates. Ameristar's
net income increased to $47.6 million for the year ended December 31, 2003,
compared to $40.5 million in 2002.

            For the six months ended June 30, 2004, Ameristar's consolidated net
revenues were $424.4 million, up $41.0 million, or 10.7%, from the corresponding
2003 period. Ameristar's consolidated net income for the six months ended June
30, 2004 increased to $30.9 million from $26.2 million in the same period in
2003.

            Ameristar's consolidated net revenues for the quarter ended June 30,
2004, were $210.0 million, representing an increase of $15.2 million, or 7.8%,
over the second quarter in 2003. Ameristar's consolidated net income increased
to $15.0 million in the 2004 second quarter from $14.5 million in the second
quarter of 2003.

            In the first and second quarters of 2004, each of Ameristar's
properties continued to be ranked number one in market share in its respective
market.

            Ameristar historically has funded its daily operations through net
cash provided by

                                       22

<PAGE>

operating activities and its significant capital expenditures primarily through
operating cash flows, bank debt, and other debt financing. Ameristar believes
that its cash flows from operations, cash, and cash equivalents and availability
under its senior credit facilities will support its operations and liquidity
requirements, including current capital expenditure plans, for the foreseeable
future. As of June 30, 2004, in addition to the $68.9 million available for
borrowing under the company's senior credit facilities, Ameristar had
approximately $89.7 million of cash and cash equivalents, approximately $45
million of which were required for daily operations. Ameristar plans to finance
the transaction with the Debtor from a combination of available cash and an
increase in the borrowing capacity under its senior credit facilities. Ameristar
believes that its financial condition is such that it has provided adequate
assurance of its future performance of the obligations that it will assume under
the Plan and Asset Purchase Agreement.

            Additional information about Ameristar can be found in the Form 10-Q
(for the quarterly period ended June 30, 2004) and Form 10-K (for the fiscal
year ended December 31, 2003) filed by Ameristar with the U.S. Securities and
Exchange Commission, copies of which are attached hereto as Exhibits "4" and
"5," respectively.

      6. OTHER SIGNIFICANT EVENTS IN THE CASE.

                  a. THE HYATT SETTLEMENT AGREEMENT.

            As of the date of the Original Hyatt Settlement Agreement, Hyatt had
in its possession funds in the amount of approximately $788,000 (the "Funds") in
which Hyatt purported to hold an ownership interest pursuant to the terms of the
Hyatt management agreement and applicable law. Hyatt agreed to turn over the
Funds to the Debtor under the terms and conditions of the Original Hyatt
Settlement Agreement. However, by virtue of the Debtor's alleged material
breaches of the Original Hyatt Settlement Agreement and the amounts allegedly
remaining outstanding under the Original Hyatt Settlement Agreement, the Funds
were never turned over.

            On July 23, 2004, the Debtor, the Ad Hoc Committee (and its members)
and Hyatt entered into the Hyatt Settlement Agreement, which provides for the
compromise and resolution of all of the disputes between the Debtor and Hyatt
and the treatment of Hyatt's Claims under the Plan. In short, pursuant to the
Hyatt Settlement Agreement, and in full satisfaction of all Claims, demands

                                       23

<PAGE>

or obligations arising under or related to Hyatt's Claims in the Case, Hyatt
shall, among other things, (i) be entitled to retain the Funds and certain
management fees to which the Debtor previously objected (the "Disputed
Management Fee"), and (ii) be paid an additional $778,530 in cash within 10 days
after the Effective Date of the Plan. For the complete terms of the Hyatt
Settlement Agreement, please refer to Exhibit "E" of the Plan.

                  b. THE FF&E SETTLEMENT AGREEMENT.

            On or about February 19, 2003, the Debtor and the FF&E Lender
entered into an agreement pursuant to which all issues between the Debtor and
the FF&E Lender concerning the amount and priority of the FF&E Lender's Claim
and the treatment of such Claim under a plan were resolved. On February 19,
2003, the Debtor filed its Motion to Approve Stipulation Regarding (1) Allowance
and Payment of Secured Claim of David R. Belding; and (2) Mutual Release of
Claims Relating to Disputes Over Funds in Wells Fargo Bank Account (the "FF&E
Stipulation").

            Objections to the FF&E Stipulation were filed by the Ad Hoc
Committee and PCL, and the Indenture Trustee and the Creditors' Committee filed
joinders to the objection filed by the Ad Hoc Committee (PCL later withdrew its
objection to the FF&E Stipulation). The objections asserted, among other things,
that the initiation of an adversary proceeding may be required to obtain the
relief sought in the FF&E Stipulation. The Debtor, the FF&E Lender, and the
objecting parties agreed to proceed with the matter by way of an adversary
proceeding and the matter was converted to an adversary proceeding.

            Thereafter, the parties reached an agreement whereby the adversary
proceeding on the FF&E Stipulation was held in abeyance and the issues relating
to the FF&E Stipulation were resolved or reserved for a later date. On June 24,
2003, the Debtor filed an Amended Stipulation Regarding (1) Allowance and
Payment of Secured Claim of David R. Belding; and (2) Mutual Release of Claims
Relating to Disputes Over Funds in Wells Fargo Bank Account (the "Belding
Agreement"), which was approved by the Bankruptcy Court by order entered June
30, 2003. The Belding Agreement provided, among other things, that the FF&E
Lender would receive payments of up to $500,000 per month during the Case and
would be paid certain amounts in connection with confirmation of a plan.
Pursuant to the terms of the Belding Agreement, commencing in July 2003,

                                       24

<PAGE>

the FF&E Lender has received payments of $500,000 per month for total payments
during the Case, as of May 1, 2004, in the amount of $5,000,000.

            After the approval of the Belding Agreement, the Debtor and the FF&E
Lender entered into the FF&E Settlement Agreement, dated as of May 28, 2004,
which has been incorporated into the Plan. Pursuant to the FF&E Settlement
Agreement, the FF&E Lender shall continue to be paid the amount of $500,000 per
month until the Effective Date of the Plan and shall be paid, on the Effective
Date, an amount equal to $11,000,000 less any monthly payments made to the FF&E
Lender during the Case in excess of the $5,000,000 already paid to the FF&E
Lender as of May 1, 2004.(8) The FF&E Agreement also provides for the mutual
release of claims, the dismissal of the FF&E Lender's Liens on assets of the
Estate, and the dismissal of the pending adversary proceeding relating to issues
covered by the FF&E Settlement Agreement. The FF&E Settlement Agreement is
conditioned on, among other things, confirmation of the Plan. The Debtor is
seeking Bankruptcy Court approval of the FF&E Settlement Agreement pursuant to
the Plan. The treatment of the FF&E Lender is reflected in the Plan and
described in Section II.C.6.b, above.

                  c. THE PCL SETTLEMENT AGREEMENT.

            PCL Construction Services, Inc. ("PCL") was the general contractor
in the construction of the Casino. Pursuant to its contract with the Debtor, PCL
was obligated to prepare construction schedules for completion of the Casino
within the time limits of the contract, to revise the schedules to the extent
required, to provide for timely completion of the contract, and to otherwise
perform and act in the capacity of general contractor.

            On May 29, 2002, the Debtor filed a complaint in Gilpin County
District Court, Colorado, seeking damages from PCL for (1) fraudulent
misrepresentation, (2) fraudulent concealment, (3) negligent misrepresentation,
(4) constructive fraud, and (5) breach of contract (the "Casino Action"). On
June 19, 2002, PCL filed an answer and filed its own complaint against the
Debtor and 20 other defendants (including numerous subcontractors) also in
Gilpin County District Court, Colorado (the "PCL Action"). On August 22, 2002,
the Debtor filed an answer to the

------------
(8)   Assuming a December 1, 2004 Effective Date, the Debtor estimates that the
FF&E Lender will be entitled to receive a lump-sum payment of $7,500,000 in full
satisfaction its Claims.

                                       25

<PAGE>

complaint in the PCL Action. Prior to the Petition Date, the Casino Action and
the PCL Action were consolidated into one case.

            The claims of PCL and its subcontractors against the Debtor
aggregated approximately $10,000,000 and the Debtor's claims against PCL were in
the approximate amount of $5,000,000. The claims on the part of both PCL and the
Debtor were contingent and unliquidated, however, PCL's claims included claims
for the foreclosure of mechanic's liens on the Casino property and PCL asserted
that the mechanic's liens were first priority liens on the Casino property,
superior in priority to the deed of trust of the Indenture Trustee on behalf of
the First Mortgage Noteholders.

            Following extensive settlement discussions, on May 15, 2003, PCL (on
behalf of itself and the PCL Subcontractors) and the Debtor entered into a
Settlement and Release Agreement (the "PCL Settlement Agreement"). Pursuant to
the PCL Settlement Agreement, the Debtor agreed to pay PCL a total of
$4,500,000, with a $2,300,000 down payment, a $1,400,000 payment on the first to
occur of January 15, 2004 or ten (10) days after the effective date, $400,000 on
October 15, 2004 and $400,000 on April 15, 2005. A motion for approval of the
PCL Settlement Agreement was filed with the Bankruptcy Court on May 16, 2003 and
was approved by order entered July 7, 2003.

            Subsequent to the order approving the PCL Settlement Agreement, PCL,
the PCL Subcontractors and Debtor have performed in accordance with the PCL
Settlement Agreement. Specifically, all required documents for the dismissal of
the Casino Action and the PCL Action and all required documents for the release
of the mechanic's liens on the Casino property, as well as required general
releases, have been placed in escrow with Clear Creek Gilpin Abstract & Title
Corp., the required $2,300,000 down payment was paid to PCL by the Debtor on
July 28, 2003, and the required $1,400,000 payment was paid to PCL by the Debtor
on January 15, 2004. Under the Plan, PCL will be treated as set forth in the PCL
Settlement Agreement.

                  d. THE STEELMAN ADR.

            Paul Steelman, Ltd. and Paul Steelman, an individual (together,
"Steelman") was the project architect for the Casino project. Steelman asserts
that it recorded a mechanic's lien in the amount of $223,473.92 for
architectural work performed at the Casino project. On or about April 5, 2002,
Steelman filed a mechanic's lien against the Casino relating to such amount.
Steelman further

                                       26

<PAGE>

asserts that, in addition to the base amount of its mechanic's lien Claim, it is
also entitled to interest and attorney's fees relating to such Claim. As a
result, Steelman asserts that, as of September 3, 2004, its mechanic's lien
Claim totals approximately $408,155.65 and that such lien is senior to all other
liens on the Acquired Assets, except for the Secured Claim of the Black Hawk
BID. The Debtor disputes that Steelman is owed any amounts and believes that
Steelman owes the Debtor $2,200,000 for Steelman's failure to properly prepare
and complete architectural plans and specifications for the Casino project in a
timely fashion. To the extent that Steelman is owed any amounts, the Debtor
disputes Steelman's entitlement to interest and attorney's fees and the lien
priority of any mechanic's lien.

            Prior to the Petition Date, on or about October 1, 2002, the Debtor
and Steelman entered into a dispute resolution agreement relating to their
disputes (the "Steelman ADR Agreement") that provided for mediation to be
followed by binding arbitration, if necessary (the "Steelman ADR"). The Steelman
ADR Agreement provided for the retention of a forensic architect by the Debtor
and established certain dates and deadlines relating to the submission of a
report by the Debtor's forensic architect, a rebuttal report by Steelman, and
the conclusion of the Steelman ADR. Prior to the Petition Date, the Debtor's
forensic architect, JMS Architect, completed its report. However, the balance of
the Steelman ADR process was stayed by the filing of the Case.

            On March 24, 2003, the Bankruptcy Court granted the Debtor's motion
seeking authority to retain and compensate JMS Architect in connection with the
Steelman ADR, and on May 14, 2003, the Bankruptcy Court granted the Debtor's and
Steelman's joint motion for relief from stay to proceed with Steelman ADR.

            Steelman and the Debtor retained David Rudy, Esq. of Just Accord,
Inc. to act as a mediator and established September 22 and 23, 2003 as dates for
the mediation. At the September mediation, the Debtor and Steelman agreed to
establish further deadlines for the submission of additional evidence to the
mediator and set a continued mediation for December 19, 2003. The mediation was
unsuccessful. Binding arbitration will be conducted by Murray Richtel, an
arbitrator at the Judicial Arbiter Group in Denver, Colorado. The arbitration is
currently scheduled for December 1 - 9, 2004.

                                       27

<PAGE>

                  e. FIRST PLACE LLC.

            On or about August 2, 2001, First Place LLC ("First Place") filed a
lawsuit in the Gilpin County District Court against the Debtor generally seeking
a declaratory judgment that certain deeds in the Debtor's chain of title with
respect to a certain strip of real property conveyed only an easement. First
Place claims fee title to the real property that is the subject of the foregoing
state court litigation (the "Disputed Property"). The Debtor timely referred the
issue to its title insurance company, First American Title, which advised the
Debtor that the claim was covered by the Debtor's title insurance and that First
American Title would defend the claim. After a trial in June 2002, the trial
court determined that First Place has an ownership interest in a portion of the
Disputed Property comprising approximately 2,632 square feet as to which title
was insured in favor of the Debtor. On or about October 18, 2002, the trial
court entered an order granting certain post-trial motions relating to the trial
court's decision. In that order, the trial court indicated that it could order
the conveyance of the Disputed Property to the Debtor and order that damages be
paid to First Place in connection therewith. Before a further hearing was held,
the Debtor filed the Case and the action was stayed.

            As of March 17, 2003, the date set by the Bankruptcy Court as the
claims bar date, First Place had not filed a proof of claim in the Case. On or
about April 10, 2003, pursuant to Bankruptcy Rule 3004, the Debtor, through
First American Title, filed a proof of claim on behalf of First Place. On May 5,
2003, First Place filed a notice of withdrawal of the proof of claim filed on
its behalf, taking the position that First Place does not hold a Claim against
the Estate.

            On or about June 11, 2003, the Debtor, through First American Title,
filed in the Case an adversary proceeding against First Place seeking a
determination that First Place is a creditor with a Claim against the Debtor's
Estate. On or about July 11, 2003, First Place filed a motion in the Case
seeking relief from stay. In addition, First Place filed a motion in the
adversary proceeding seeking abstention. On or about July 31, 2003, the Debtor,
through First American Title, filed its opposition to First Place's requests to
the extent they sought to avoid enforcing a Claim in the Case (the Debtor did
not oppose First Place's motions to the extent First Place simply sought to
liquidate the amount of the Claim in the state court (and, in fact, offered to
stipulate to such relief early in the Case)). The

                                       28

<PAGE>

hearing on the First Place relief from stay motion was scheduled for August 7,
2003, at which time the Court granted relief from stay to allow First Place to
proceed with the state court action. On November 14, 2003, the Court granted
First Place's abstention motion.

            Following the Court's modification of the automatic stay, the trial
court in the state court action ordered the conveyance of a portion of the
Disputed Property to the Debtor upon the condition that the Debtor pay $73,500
to First Place. First Place has appealed the trial court's order and the trial
court has issued a stay of the order pending First Place's appeal thereof.

            First Place takes the position that it does not hold a Claim against
the Estate. First Place further asserts that the Bankruptcy Court has on
separate occasions held that (i) First Place does not have a Claim, and (ii) the
Bankruptcy Court is required to abstain from determining that First Place has a
Claim. The Plan will not impact First Place's rights in connection with the
Disputed Property except as set forth in Section V.E of the Plan.

            The Debtor does not anticipate any financial exposure in connection
with the First Place matter and anticipates that First American Title will
resolve the First Place matter at its expense. The Debtor may assert affirmative
claims against First Place, and its principals, in connection with the actions
taken by First Place against the Debtor and its property and expressly reserves
the right to pursue such affirmative claims.

                  f. THE GF GAMING APPEAL.

            On October 22, 2001, GF Gaming, a gaming company operating a casino
in Central City, Colorado, filed an appeal with the Colorado Gaming Commission
challenging the issuance of licenses to the Debtor and Hyatt on the grounds that
the Colorado Gaming Commission failed to consider whether the Casino facility
met the historic architecture intent of the Colorado gaming laws. In December
2001, at the Debtor's and Hyatt's request, the Colorado Gaming Commission
dismissed GF Gaming's action based upon lack of standing and lack of
jurisdiction. In February 2002, GF Gaming filed a notice of appeal continuing
its challenge in the Colorado Court of Appeal. A decision by the Court of
Appeals was stayed by the filing of the Case. On March 26, 2003, all parties to
the GF Gaming matter filed a stipulated motion to lift the automatic stay to
allow the GF Gaming appeal to proceed to conclusion in its original forum.
Thereafter, the Court of Appeals

                                       29

<PAGE>

dismissed the GF Gaming appeal. Accordingly, the Debtor does not anticipate any
financial exposure in connection with the GF Gaming matter.

            7. CLAIMS.

                  a. THE BAR DATES FOR FILING PROOFS OF CLAIMS.

            The Bankruptcy Court set January 23, 2003, as the deadline for
Filing proofs of Claims against the Debtor. Subsequently, the Bankruptcy Court
set a supplemental bar date of March 17, 2003 for certain creditors and
interested parties who did not receive notice of the prior bar date.
Accordingly, with the exception of a general 30-day bar date for Claims arising
from the rejection of executory contracts and unexpired leases, the deadlines
for filing proofs of claim against the Debtor have passed.

                  b. PROOFS OF CLAIM FILED.

            The Claims Register maintained by the Bankruptcy Court in the Case
reflects 144 filed proofs of claim, representing a total in excess of $160
million in Claims against the Estate, including, among other things, disputed,
contingent, and unliquidated Claims, as well as Claims which have since been
paid or settled.

                  c. ESTIMATED AMOUNTS OF CLAIMS.

            Pursuant to the Debtor's Schedules, the Debtor estimated that, as of
the Petition Date, the total amount of the Claims (including disputed Claims)
that would be asserted against the Estate was $149,021,885. Secured Claims
accounted for $144,555,332 of this amount; Priority Claims accounted for $49,687
of this amount; and General Unsecured Claims accounted for approximately
$4,414,206 of this amount.

            Since the filing of the Schedules, the Debtor has entered into
settlements, accounted for the post-petition payments made (or to be made) by
the Debtor and the Receiver, and has otherwise reviewed its books and records
and the Proofs of Claims Filed in this Case, and estimates that, as of the
Effective Date, the following Claims will exist against the Debtor's Estate
(grouped by type of Claim):

                                       30

<PAGE>

<TABLE>
<CAPTION>
                   TYPE OF CLAIM                                            AMOUNT OF CLAIM(9)
                   -------------                                            ------------------
<S>                                                         <C>
Secured Claim of Black Hawk BID                                                  $2,332,031.98

Secured Claim of PCL (on behalf of itself and the PCL
subcontractors)                                                                   $400,000.00

Secured Claim of Steelman                                                             $0

Secured Claim of the FF&E Lender                                                $7,500,000(10)

Secured Claim of the First Mortgage Noteholders             $107,400,000 (plus interest and reasonable fees, costs
                                                            and charges to the extent permitted by Bankruptcy Code
                                                                                section 506(b))

Other Secured Claims                                                                  $0

Priority Tax Claims                                                               $27,960.00

Unsecured Priority Claims                                                         $21,727.40
Allowed Unsecured Claim of Hyatt (as described in the
Original Hyatt Settlement Agreement)                                          $18,413,243.68(11)

General Unsecured Claims (including estimated rejection
damage claims)                                                           $1,161,279.25 (estimated)(12)
</TABLE>

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

(9)   Assumes an Effective Date of December 1, 2004.

(10)  Pursuant to the FF&E Settlement Agreement, and in full satisfaction of all
of its Claims against the Debtor, the FF&E Lender shall be paid, on the
Effective Date, an amount equal to $11,000,000 less any monthly payments made to
the FF&E Lender during the Case in excess of the $5,000,000 already paid to the
FF&E Lender as of May 1, 2004.

(11)  Pursuant to the Hyatt Settlement Agreement, and in full satisfaction for
all of its Claims against the Debtor, Hyatt shall, among other things, be paid
$778,530 within 10 days after the Effective Date and shall be entitled to retain
the Funds and the Disputed Management Fee.

(12)  The Debtor believes that the Allowed General Unsecured Claims (without
accounting for rejection damage claims) will be approximately $961,279.25. The
Debtor also believes that, based on the currently contemplated rejections, the
rejection damage claims will not exceed the amount of $200,000. The Debtor has
estimated the amount of General Unsecured Claims based upon the Schedules, the
Debtor's books and records, including records relating to the post-petition
payments made by the Debtor and the Receiver, and the proofs of Claims Filed in
the Case, settlements reached with certain creditors, and certain assumptions
regarding Claims objections. While the Debtor believes that the Creditors'
Committee, the Post-Effective Date Committee or the Ad Hoc Committee will
prevail in any Filed Claims objections, the Debtor cannot give any assurance
that the Creditors' Committee, the Post-Effective Date Committee or the Ad Hoc
Committee will prevail on a sufficient number of Claim objections to reduce the
Claims to the amounts set forth in the foregoing chart.

                                       31

<PAGE>

<TABLE>
<CAPTION>
                   TYPE OF CLAIM                                            AMOUNT OF CLAIM(9)
                   -------------                                            ------------------
<S>                                                         <C>
Unpaid Administrative Claims (other than Ordinary Course
Administrative Claims paid in the ordinary course of
business)                                                                    $250,000 (estimated)

Substantial Contribution Claims of Ad Hoc Committee and
Indenture Trustee                                           To be submitted in accordance with the Plan(13)

Cure Amounts                                                                      $182,509.39
</TABLE>

            THE DEBTOR BEFORE THE EFFECTIVE DATE AND THE CONTINUING ESTATE
REPRESENTATIVE, THE POST-EFFECTIVE DATE COMMITTEE, AND THE AD HOC COMMITTEE
AFTER THE EFFECTIVE DATE RESERVE ANY AND ALL RIGHTS, EXCEPT AS EXPRESSLY STATED
IN THE PLAN, TO OBJECT TO OR DEFEND AGAINST ANY CLAIM ASSERTED AGAINST THE
DEBTOR.

                  d. CLAIM OBJECTIONS.

            Except as provided by the Plan, the Debtor before the Effective
Date, the Continuing Estate Representative and/or the Ad Hoc Committee (with
respect to non-Class 8A Claims) and the Post-Effective Date Committee (with
respect of Class 8A Claims) may file objections to Claims by the later of (a)
120 days after the Effective Date, unless extended by the Court, and (b) 120
days after the date on which a proof of Claim or Interest has been Filed, unless
extended by the Court. Subject to the Plan, the Debtor, the Continuing Estate
Representative, the Post-Effective Date Committee and the Ad Hoc Committee
reserve any and all rights they may have with respect to seeking the allowance
or disallowance of any and all Claims, including Claims not referenced in the
Disclosure Statement. In voting on the Plan, creditors may not rely on the
absence of an objection to their proofs of claim as any indication that the
Debtor or another party in interest ultimately will not object to the amount,
priority, security, or allowability of their Claims (unless the Claim is
specifically allowed under the Plan). Moreover, to the extent provided for above
and in the Plan, the Debtor, the Continuing Estate Representative, the
Post-Effective Date Committee and the Ad Hoc Committee reserve, and intend to
prosecute, all objections to Claims and counterclaims the Debtor

-----------------
(13)  See Section III.A.2.e for an explanation of the Substantial Contribution
Claims of the Ad Hoc Committee and Indenture Trustee

                                       32

<PAGE>

may have with respect to Claims asserted against the Debtor, and, except as
specifically set forth in the Plan, further reserve the right to prosecute
claims of the Debtor and the Estate.

            Attached hereto as Exhibit "2" is a list of the Unsecured Creditors
who were Scheduled by the Debtor and/or have filed proofs of claim in the Case
(Exhibit "2" does not include any Claims based upon the rejection of executory
contracts or unexpired leases, which the Debtor believes will not exceed the
total amount of $200,000). Exhibit "2" also sets forth whether the Debtor
believes each Claim is an Allowed Claim or is a Disputed Claim. IF THE DEBTOR
HAS LISTED YOUR CLAIM AS DISPUTED, YOU SHOULD EXPECT AN OBJECTION TO BE BROUGHT
TO YOUR CLAIM. Many objections to Claims will be that the amount set forth in
the proof of claim does not reflect the amount set forth in the Debtor's books
and records, or does not account for payments made by the Receiver or the Debtor
after the Petition Date. Other objections may be raised to such Claims.

            PLEASE NOTE THAT THE DEBTOR HAS MADE EVERY ATTEMPT TO LIST ON
EXHIBIT "2" ALL OF THE GENERAL UNSECURED CLAIMS NOTED ON THE CLAIMS DOCKET
MAINTAINED BY THE BANKRUPTCY COURT. THE DEBTOR, HOWEVER, RESERVES THE RIGHT TO
AMEND EXHIBIT "2" AT ANY TIME PRIOR TO THE HEARING ON THE APPROVAL OF THIS
DISCLOSURE STATEMENT. FURTHER, THE DEBTOR RESERVES THE RIGHT TO OBJECT TO ANY
AND ALL CLAIMS ASSERTED AGAINST THE DEBTOR IN THE CASE NOTWITHSTANDING A CLAIM'S
INCLUSION OR NON-INCLUSION ON EXHIBIT "2" OR A CLAIM'S DESIGNATION AS A DISPUTED
CLAIM OR AN UNDISPUTED CLAIM ON EXHIBIT "2."

            8. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

            On the Petition Date, the Debtor was party to certain unexpired
leases and executory contracts. The Debtor has engaged in negotiations regarding
many of these agreements, and where appropriate, has rejected certain
agreements.

            On the Effective Date, the Debtor intends to assume and assign to
Ameristar the unexpired leases and executory contracts designated for assumption
and assignment under the Asset Purchase Agreement and listed on the Schedule of
Assumed and Assigned Agreements. The initial Schedule of Assumed and Assigned
Agreements will be Filed on or before 21 days prior to  the

                                       33

<PAGE>

Confirmation Hearing. The Debtor reserves its right to amend this schedule at
any time prior to the Effective Date.

            On the Effective Date, the Debtor will reject all executory
contracts and unexpired leases - other than those designated for assumption and
assignment under the Asset Purchase Agreement and listed on the Schedule of
Assumed and Assigned Agreements - to the extent that these agreements constitute
executory contracts or unexpired leases under Bankruptcy Code section 365.

            9. AVOIDANCE ACTIONS.

            Payments made by the Debtor within 90 days and one-year of the
Petition Date may be recoverable under Bankruptcy Code section 547 as
preferential transfers. Also, the Debtor may have other potential avoidance
actions, including actions to set aside and/or recover fraudulent transfers
arising under Bankruptcy Code sections 544 and 548 and applicable state law,
which may apply to transfers preceding the Petition Date by four or more years.
The Debtor has not evaluated the character and nature of the aforementioned
payments, the potential that they may be recoverable as preferential transfers
or the potential that they (or other transactions) may be recoverable as
fraudulent transfers. THE DEBTOR AND CONTINUING ESTATE REPRESENTATIVE RESERVE
THE RIGHT TO PURSUE THE RECOVERY OF PREFERENCES AND/OR FRAUDULENT TRANSFERS
COMMENCED PRIOR TO NOVEMBER 7, 2004 (THE STATUTE OF LIMITATIONS FOR COMMENCING
SUCH ACTIONS) IN THEIR DISCRETION.

III. SUMMARY OF THE PLAN

            The following is a narrative description of certain provisions of
the Plan. The Plan is attached hereto as Exhibit "1." The following summary of
the Plan is qualified in its entirety by the actual terms of the Plan. In the
event of any conflict, the terms of the Plan will control over any summary set
forth in this Disclosure Statement.

      A. CLASSIFICATION OF CLAIMS AND INTERESTS UNDER THE PLAN.

            The Bankruptcy Code requires that a chapter 11 plan divide the
different claims against, and equity interests in, the debtor into separate
classes based upon their legal nature. Claims of a substantially similar legal
nature are usually classified together, as are equity interests of a

                                       34

<PAGE>

substantially similar legal nature. The Bankruptcy Code does not require the
classification of administrative claims and certain priority claims, and they
are typically denominated "unclassified claims."

            Under Bankruptcy Code section 1124, a class of claims is "impaired"
unless the plan (i) leaves unaltered the legal, equitable, and contractual
rights of the holders of claims in the class; or (ii) cures all defaults (other
than those arising from the debtor's insolvency, the commencement of the case,
or nonperformance of a nonmonetary obligation) that occurred before or after the
commencement of the case, reinstates the maturity of the claims in the class,
compensates the holders for their actual damages incurred as a result of their
reasonable reliance on any acceleration rights, and does not otherwise alter
their legal, equitable, and contractual rights. Except for any right to
accelerate the debtor's obligations, the holder of an unimpaired claim will be
placed in the position it would have been if the debtor's case had not been
commenced.

            A chapter 11 plan must designate each separate class of claims and
equity interests either as "impaired" (affected by the plan) or "unimpaired"
(unaffected by the plan). If a class of claims is "impaired," under the
Bankruptcy Code the holders of claims in that class are entitled to vote on the
plan (unless the plan provides for no distribution to the class, in which case
the class is deemed to reject the plan), and to the right to receive, under the
plan, property with a value at least equal to the value that the holder would
receive if the debtor were liquidated under chapter 7 of the Bankruptcy Code. If
a class of claims is unimpaired, the holders of claims in that class are deemed
to accept the plan.

            As required by the Bankruptcy Code, the Plan classifies Claims and
Interests into the following classes:

<TABLE>
<CAPTION>
                                                                 IMPAIRED/
  CLASS                       DESCRIPTION                        UNIMPAIRED            VOTING STATUS
  -----                       -----------                        ----------            -------------
<S>           <C>                                                <C>                <C>
  None        Administrative Claims and Priority Tax
              Claims                                             Unimpaired         Not Entitled to Vote

 Class 1      Secured Claim of Black Hawk BID                    Unimpaired         Not Entitled to Vote

 Class 2      Secured Claim of PCL                                 Impaired         Entitled to Vote
</TABLE>

                                       35

<PAGE>

<TABLE>
<S>           <C>                                                <C>                <C>
 Class 3      Secured Claim of Steelman                           Impaired          Entitled to Vote

 Class 4      Secured Claim of FF&E Lender                        Impaired          Entitled to Vote

 Class 5      Secured Claim of First Mortgage Noteholders         Impaired          Entitled to Vote

 Class 6      Other Secured Claims (including Secured
              Tax Claims)                                         Impaired          Entitled to Vote

 Class 7      Priority Claims (Other than Priority Tax
              Claims)                                             Impaired          Entitled to Vote

Class 8A      General Unsecured Claims                            Impaired          Entitled to Vote

Class 8B      Claims of Hyatt                                     Impaired          Entitled to Vote

Class 9A      Existing Preferred Stock (Series B)                 Impaired          Entitled To Vote

Class 9B      Existing Preferred Stock (Series A)                 Impaired          Entitled To Vote

Class 10      Existing Common Stock                               Impaired          Deemed to Reject - Vote
                                                                                    Not Solicited

</TABLE>

            1. UNCLASSIFIED CLAIMS.

            Holders of Administrative Claims and certain other Claims do not
vote on a plan of reorganization because they are entitled to certain treatment
provided for them in the Bankruptcy Code. Therefore, the Debtor has not
classified these Claims.

                  a. ADMINISTRATIVE CLAIMS.

            Administrative Claims are Claims under Bankruptcy Code section
503(b) for costs or expenses that are allowed under Bankruptcy Code section
507(a)(1). The Bankruptcy Code requires that all Administrative Claims be paid
on the Effective Date, unless a particular claimant agrees to a different
treatment. Administrative Claims include the actual and necessary costs and
expenses of the Case. Those expenses include post-petition salaries and benefits
owed to the employees, post-petition rent, amounts owed to vendors providing
goods and services to the Debtor during the Case, tax obligations incurred after
the Petition Date, and certain statutory fees and charges. Other Administrative
Claims include the actual, reasonable fees and expenses of the Debtor's
professionals and professionals retained by the Creditors' Committee. Entities
holding Administrative Claims

                                       36

<PAGE>

should take note: unless otherwise provided in the Plan, entities that hold
Administrative Claims other than Ordinary Course Administrative Claims, Cure
Payments and U.S. Trustee fees that do not timely file and serve a motion
seeking payment in accordance with Section II.B of the Plan, will forever be
barred from asserting those Administrative Claims against the Debtor, the
Estate, the Continuing Estate, or their respective property.

                  (1) ALLOWANCE OF ADMINISTRATIVE CLAIMS.

            ALLOWANCE OF ORDINARY COURSE ADMINISTRATIVE CLAIMS: An entity
holding an Ordinary Course Administrative Claim may, but need not, File a motion
or request for payment of its Claim. The Continuing Estate Representative, the
Ad Hoc Committee, or any other party in interest may File an objection to an
Ordinary Course Administrative Claim in their discretion. Unless the Continuing
Estate Representative, the Ad Hoc Committee or a party in interest object to an
Ordinary Course Administrative Claim, such Claim will be allowed in accordance
with the terms and conditions of the particular transaction that gave rise to
the Claim.

            ALLOWANCE OF PROFESSIONAL FEE CLAIMS: UNLESS OTHERWISE EXPRESSLY
PROVIDED IN THE PLAN, A PROFESSIONAL FEE CLAIM WILL BE ALLOWED ONLY IF:

            (i) On or before 60 days after the Effective Date, the entity
holding such Professional Fee Claim both Files with the Court a final fee
application or a motion requesting allowance of the fees and serves the
application or motion on the Continuing Estate Representative, the Ad Hoc
Committee, and each of their respective counsel, and the U.S. Trustee; and

            (ii) The Court allows the Claim.

            The Continuing Estate Representative, the Ad Hoc Committee, or any
other party in interest may File an objection to such application or motion
within the time provided by the Bankruptcy Rules or within any other period that
the Court establishes. ENTITIES HOLDING PROFESSIONAL FEE CLAIMS WHO DO NOT
TIMELY FILE AND SERVE A FEE APPLICATION OR MOTION FOR PAYMENT WILL BE FOREVER
BARRED FROM ASSERTING THOSE CLAIMS AGAINST THE DEBTOR, THE ESTATE, THE
CONTINUING ESTATE, OR THEIR RESPECTIVE PROPERTY.

            ALLOWANCE OF CURE PAYMENTS: Cure Payments shall be allowed in
accordance with the procedures set forth in Section III.A.2 of the Plan.

                                       37

<PAGE>

            ALLOWANCE OF NON-ORDINARY COURSE ADMINISTRATIVE CLAIMS: UNLESS
OTHERWISE EXPRESSLY PROVIDED IN THE PLAN, NON-ORDINARY COURSE ADMINISTRATIVE
CLAIMS WILL BE ALLOWED ONLY IF:

            (i) On or before 60 days after the Effective Date, the entity
holding such Non-Ordinary Course Administrative Fee Claim both Files with the
Court a motion requesting allowance of the Non-Ordinary Course Administrative
Claim and serves the motion on the Continuing Estate Representative, the Ad Hoc
Committee, and their respective counsel, and the U.S. Trustee; and

            (ii) The Court allows the Claim by Final Order.

            The Continuing Estate Representative, the Ad Hoc Committee, or any
other party in interest may File an objection to such motion within the time
provided by the Bankruptcy Rules or within any other period that the Court
establishes. ENTITIES HOLDING NON-ORDINARY COURSE ADMINISTRATIVE CLAIMS THAT DO
NOT TIMELY FILE AND SERVE A REQUEST FOR PAYMENT WILL BE FOREVER BARRED FROM
ASSERTING THOSE CLAIMS AGAINST THE DEBTOR, THE ESTATE, THE CONTINUING ESTATE, OR
THEIR RESPECTIVE PROPERTY.

                        (2) TREATMENT OF ADMINISTRATIVE CLAIMS.

            TREATMENT OF ALLOWED ORDINARY COURSE ADMINISTRATIVE CLAIMS: Unless
otherwise agreed, Allowed Ordinary Course Administrative Claims will be paid by
the Continuing Estate Representative in accordance with the terms and conditions
of the particular transaction that gave rise to the Claim.

            TREATMENT OF PROFESSIONAL FEE CLAIMS: Unless otherwise agreed, an
Allowed Professional Fee Claim will be paid by the Continuing Estate
Representative within ten (10) days after the date on which the Court allows
such Claim.

            TREATMENT OF CURE PAYMENTS: Cure Payments will be made to the
non-debtor parties to the executory contracts or unexpired leases, in accordance
with Section III.A.2 of the Plan.

            TREATMENT OF U.S. TRUSTEE FEES UNDER 28 U.S.C. SECTION 1930: The
Continuing Estate Representative will pay to the U.S. Trustee all fees due and
owing under 28 U.S.C. Section 1930 in cash within five (5) days after the
Effective Date.

            TREATMENT OF NON-ORDINARY COURSE ADMINISTRATIVE CLAIMS: Unless the
entity

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<PAGE>

holding a Non-Ordinary Course Administrative Claim allowed by the Court agrees
to different treatment, the Continuing Estate Representative will pay to that
entity cash in the full amount of such Allowed Non-Ordinary Course
Administrative Claim, without interest, on the later of: (i) five (5) days after
the Effective Date, or (ii) five (5) days after the date on which the order
allowing such Non-Ordinary Course Administrative Claim becomes a Final Order.

                        b. PRIORITY TAX CLAIMS.

            Unless otherwise agreed, the Continuing Estate Representative will
pay to the entity holding an Allowed Priority Tax Claim cash in the full amount
of the Allowed Priority Tax Claim, without interest, on or before the latest of:
(a) 10 days after the Effective Date; (b) 10 days after the date on which the
Priority Tax Claim becomes an Allowed Priority Tax Claim; and (c) the date on
which the Allowed Priority Tax Claim becomes due and payable in accordance with
its terms. To the extent that an Allowed Priority Tax Claim is not paid on the
Effective Date, the Allowed Priority Tax Claim will accrue interest at the
federal judgment interest rate from the Effective Date through the date of
payment of the Allowed Priority Tax Claim, which interest shall be paid at the
time the Allowed Priority Tax Claim is paid.

            2. CLASSIFIED CLAIMS AND INTERESTS.

            As determined by Bankruptcy Code section 506(a), a claim is a
secured claim only to the extent of the value of the claimholder's interest in
the estate's interest in the collateral securing the claim, or to the extent of
the amount subject to setoff. Unsecured claims include claims that are not
secured by a lien, claims that are secured by interests in property that have no
value, or claims for the deficiency by which a claim exceeds the value of a
claimholder's interest in the collateral securing that claim. Interest holders
are entities that hold ownership interests (i.e., equity interests) in a debtor.
Where, as here, the debtor is a corporation, persons holding stock in the debtor
are interest holders.

                        a. CLASS 1 (SECURED CLAIM OF BLACK HAWK BID).

            Class 1 is unimpaired under the Plan, and the legal, equitable, and
contractual rights of the holder of the Allowed Class 1 Claim are unaltered by
the Plan. Pursuant to the Asset Purchase Agreement, Ameristar shall assume all
liabilities and obligations of the Debtor arising under and

                                       39

<PAGE>

related to the municipal bonds issued by the Black Hawk BID. Unless the holder
of such Claim and Ameristar agree to a different treatment, the holder of the
Allowed Class 1 Claim shall receive the legal, equitable, and contractual rights
to which such Claim entitles the holder thereof.

                        b. CLASS 2 (SECURED CLAIM OF PCL).

            Class 2 is impaired under the Plan. In full satisfaction of the
Allowed Class 2 Claim, and pursuant to the terms of the PCL Settlement
Agreement, PCL (on behalf of itself and the PCL Subcontractors) shall be paid as
follows:

            (1) On the earlier of: (a) October 15, 2004 or (b) the Effective
Date, the Debtor or the Continuing Estate Representative, as the case may be,
shall pay PCL $400,000.

            (2) On the earlier of: (a) April 15, 2005 or (b) the Effective Date,
the Debtor or the Continuing Estate Representative, as the case may be, shall
pay PCL $400,000.

            Except with respect to the Liens of the Black Hawk BID as provided
in the Asset Purchase Agreement, the Acquired Assets are being transferred to
Ameristar free and clear of any Liens and encumbrances. PCL's Liens against
property of the Estate shall attach only to the cash proceeds received pursuant
to the Asset Purchase Agreement, subject to the provisions of the Plan.

            Pursuant to the terms of the PCL Settlement and the Plan, upon
payment to PCL of $800,000 as provided for above, PCL and the PCL
Subcontractors: (i) shall release (and be deemed to release) all Liens against
property of the Debtor's Estate (subject to the immediately preceding
paragraph), (ii) shall dismiss, with prejudice, any pending litigation against
the Debtor, and/or property of the Estate, and (iii) shall not be entitled to
any other Claim against the Debtor and/or the Estate.

                        c. CLASS 3 (SECURED CLAIM OF STEELMAN).

            Class 3 is impaired under the Plan. The amount of such Class 3
Claim, if any, will be determined in connection with the Steelman ADR. In full
satisfaction of the Allowed Class 3 Claim, Steelman shall receive the following
treatment:

            On the later of the Effective Date and the date on which the Class 3
Claim becomes an Allowed Claim, the Continuing Estate Representative shall pay
the Class 3 Claim in full.

            Except with respect to the Liens of the Black Hawk BID as provided
in the Asset Purchase Agreement, the Acquired Assets are being transferred to
Ameristar free and clear of any

                                       40

<PAGE>

Liens and encumbrances. Steelman's Liens against property of the Estate shall
attach only to the cash proceeds received pursuant to the Asset Purchase
Agreement, subject to the provisions of the Plan. The Debtor, the Ad Hoc
Committee, or Steelman may request that the Court estimate the amount of the
Class 3 Claim, in which case such estimated amount shall be reserved from the
cash portion of the Transfer Proceeds and deposited into a segregated bank
account administered by the Continuing Estate Representative until the amount of
the Class 3 Claim is fully and finally determined. In the event the Court has
not estimated the Class 3 Claim as of the Effective Date and the Class 3 Claim
has not been determined by the Steelman ADR, $500,000 of the Transfer Proceeds
shall be set aside in a segregated bank account in respect of the Class 3 Claim
until such Claim is fully and finally determined.

            On the Effective Date, Steelman shall release (and shall be deemed
to release) all Liens against property of the Estate (subject to the immediately
preceding paragraph).

                        d. CLASS 4 (SECURED CLAIM OF THE FF&E LENDER).

            Class 4 is impaired under the Plan. In full satisfaction of the
Allowed Class 4 Claim, and pursuant to the terms of the FF&E Settlement
Agreement, on the Effective Date, the Debtor shall pay the FF&E Lender cash in
the amount of $11,000,000, less any monthly payments made to the FF&E Lender
during the Case in excess of the $5,000,000 paid to the FF&E Lender during the
Case as of May 1, 2004.

            Except with respect to the Liens of the Black Hawk BID as provided
in the Asset Purchase Agreement, the Acquired Assets are being transferred to
Ameristar free and clear of any Liens and encumbrances. The FF&E Lender's Liens
against property of the Estate shall attach only to the cash proceeds received
pursuant to the Asset Purchase Agreement, subject to the provisions of the Plan.
Pursuant to the FF&E Settlement Agreement and the Plan, on the Effective Date,
the FF&E Lender shall be deemed to release its Liens, Claims and encumbrances
evidenced by the FF&E Loan Documents (subject to the immediately preceding
sentence).

                  e. CLASS 5 (SECURED CLAIM OF FIRST MORTGAGE NOTEHOLDERS).

            TREATMENT: Class 5 is impaired under the Plan. The Class 5 Claim
shall constitute an Allowed Claim in the amount of $107,400,000.00. In full
satisfaction of the Allowed Class 5

                                       41

<PAGE>

Claim, the First Mortgage Noteholders shall receive the following:

            (1) the Noteholder Cash, which amount the Debtor directs Ameristar
(and the Escrow Agent, as applicable) to pay to the Indenture Trustee in
accordance with Section 2.6(b) of the Asset Purchase Agreement;

            (2) the positive difference, if any, between the Effective Date Cash
and the Liquidation Fund Reserve, which amount shall be paid to the Indenture
Trustee by the Debtor on the Effective Date; and

            (3) the Residual Liquidation Proceeds as and when they become
available.

            To the extent the amounts set forth in (1) - (3) above are
sufficient to satisfy the Allowed Class 5 Claim in full, the First Mortgage
Noteholders shall be entitled to receive interest on their Allowed Class 5 Claim
at the rate set forth in the First Mortgage Notes or First Mortgage Indenture,
plus reasonable fees, costs, or charges provided for under the First Mortgage
Notes or First Mortgage Indenture.

            In short, pursuant to the Plan, the First Mortgage Noteholders shall
receive all of the cash proceeds generated from the liquidation of the Estate's
assets after all Administrative Claims, Priority Claims, Priority Tax Claims,
Claims in Classes 2, 3, 4, 6, 7, 8A and 8B, and Interests in Classes 9A and 9B
are paid in accordance with the Plan. (Pursuant to the Asset Purchase Agreement,
Ameristar shall assume all liabilities and obligations of the Debtor arising
under and related to the Class 1 Claim).

            Except with respect to the Liens of the Black Hawk BID as provided
in the Asset Purchase Agreement, the Acquired Assets are being transferred to
Ameristar free and clear of any Liens and encumbrances. The First Mortgage
Noteholders' Liens against property of the Estate shall attach to the Noteholder
Cash and the Liquidation Account, subject to the rights of the parties
hereunder.

            As of the Petition Date, the First Mortgage Noteholders Allowed
Claim equaled $107.4 million. The First Mortgage Notes accrue interest at the
contract (non-default) rate of 13% per annum. To the extent the value of the
Acquired Assets exceeds the Secured Claim of the First Mortgage Noteholders, the
First Mortgage Noteholders would be entitled to interest on their

                                       42

<PAGE>

Secured Claim at no less than the non-default contract rate. The Debtor filed
this Case on November 7, 2002. Assuming an Effective Date of December 1, 2004
and based on the Debtor's calculations, the postpetition interest accruing on
the First Mortgage Noteholders' Secured Claim as of the Effective Date would
equal approximately $29.7 million. Therefore, pursuant to Bankruptcy Code
section 506(b), in addition to their $107.4 million Allowed Claim, the First
Mortgage Noteholders would be entitled to approximately $29.7 million in
postpetition interest (plus any reasonable fees, costs or charges) from the
proceeds of the Acquired Assets before unsecured creditors and Interest holders
would receive any distribution. See 11 U.S.C. Section 506(b). Stated simply, the
First Mortgage Noteholders would be entitled to receive at least $137.1 million
($107.4 million + $29.7 million) from the proceeds of the Acquired Assets before
unsecured creditors and Interest holders would have any entitlement to receive
distributions on their Claims and/or Interests.

            Notwithstanding the foregoing rights of the First Mortgage
Noteholders, the Plan affords significant recoveries to both unsecured creditors
and Interest holders.

            SUBSTANTIAL CONTRIBUTION CLAIMS OF AD HOC COMMITTEE AND INDENTURE
TRUSTEE: In recognition the Ad Hoc Committee's and Indenture Trustee's
substantial contribution to the Case, and pursuant to Bankruptcy Code section
503(b)(3)(D), the reasonable fees and expenses incurred after the Petition Date
by the Ad Hoc Committee and Indenture Trustee (including attorney's fees and
financial advisor fees) shall be paid, without further application by or on
behalf of such professionals to the Court and without notice and a hearing
(other than the Confirmation Hearing), from the Noteholder Cash. The Ad Hoc
Committee and the Indenture Trustee will submit to the Debtor or the Continuing
Estate Representative, as the case may be, an invoice detailing such fees and
expenses incurred. The Indenture Trustee shall reserve such invoiced amounts
from the Noteholder Cash and shall pay such invoiced amounts, to the entity or
entities designated by the Ad Hoc Committee, out of the Noteholder Cash within
five (5) Business Days after the later of: (i) the Effective Date and (ii)
receipt of such invoices by the Indenture Trustee.

            The Debtor supports the Substantial Contribution Claims for a number
of reasons and believes that it should be approved. First, as explained in
Section II.C.5, above, the Asset Purchase Agreement is largely the result of the
marketing efforts initiated by the Ad Hoc

                                       43

<PAGE>

Committee's professionals, who not only identified potential buyers, but also
took a laboring oar in the negotiation and drafting of the Asset Purchase
Agreement. The Debtor believes that the consummation of the Asset Purchase
Agreement will result in substantially greater recoveries to virtually all
creditors and Interest holders than any other alternative explored or proposed
during the pendency of the Case. Second, the Ad Hoc Committee has been
intimately involved in negotiating and drafting the Plan and this Disclosure
Statement, as well as several other pleadings in this Case, including the Buyer
Protection Motion, which was approved by the Court on June 18, 2004 and was an
integral first step toward the consummation of the Asset Purchase Agreement and
the Plan. As a result of these efforts, the Debtor is now in a position to
emerge quickly from chapter 11. Third, the Ad Hoc Committee has devoted
significant effort to negotiations with other creditors in this Case regarding
the terms of a consensual Plan. To that end, the Debtor and/or Ad Hoc Committee
have executed agreements with: (i) the FF&E Lender, (ii) Hyatt, and (iii) the
Creditors' Committee regarding the treatment that these creditors will receive
under the Plan. As a result, the Debtor expects the Plan to be fully consensual.
Fourth, the Ad Hoc Committee has ensured, through additional negotiations, that,
in addition to creditors, the holders of Existing Preferred Stock will receive
significant recoveries in this Case. Fifth, because the Plan provides for fixed
payments to each Class of Claims and Interests that will receive distributions
under the Plan (other than Class 5 - Secured Claim of the First Mortgage
Noteholders), the Substantial Contribution Claims will be paid from the proceeds
otherwise available for First Mortgage Noteholders. This will have the effect of
ensuring that all First Mortgage Noteholders incur their Pro Rata share of the
fees and costs incurred by the Ad Hoc Committee. Stated differently, the Debtor
believes that the recoveries of creditors and Interest holders that are not
First Mortgage Noteholders will be unaffected by the payment of the Substantial
Contribution Claims.

            In sum, as a result of the efforts of the Ad Hoc Committee, the
Debtor submits that the great majority of the constituencies in this Case will
receive recoveries under the Plan vastly superior to the recoveries that would
have been realized had the Ad Hoc Committee not been involved. The fact that the
Ad Hoc Committee itself benefited from these actions should not diminish its
right to the Substantial Contribution Claims in light of the fact that the
Estate benefited

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<PAGE>

significantly as well (and at least to the same extent), especially since no
non-First Mortgage Noteholder will be affected by the allowance of the
Substantial Contribution Claims

            The Bankruptcy Court has not yet approved the Substantial
Contribution Claims and will consider such claims at the Confirmation Hearing.
Unless and until the Bankruptcy Court approves the Substantial Contribution
Claims, no First Mortgage Noteholder shall be responsible for the fees and
expenses of the Ad Hoc Committee (other than the members of the Ad Hoc Committee
or those who voluntarily agree to pay these fees and expenses), and no First
Mortgage Noteholder shall be responsible for the fees and expenses of the
Indenture Trustee (except as may be provided in the First Mortgage Notes or
First Mortgage Indenture). However, in the event the Court approves the
Substantial Contribution Claims, the recovery to First Mortgage Noteholders will
be reduced on a Pro Rata basis by the amount of the Substantial Contribution
Claims the Court ultimately allows.

                  f. CLASS 6 (OTHER SECURED CLAIMS).

            Class 6 is impaired under the Plan. Unless the holder of an Allowed
Class 6 Claim agrees to other treatment, on or as reasonably practicable after
the Effective Date, such holder shall receive, at the Continuing Estate's
option: (i) cash in the allowed amount of such holder's Allowed Class 6 Claim,
(ii) the return of the collateral securing such Class 6 Claim, or (iii) (a) the
cure of any default, other than a default of the kind specified in Bankruptcy
Code section 365(b)(2), with respect to such holder's Allowed Class 6 Claim,
without recognition of any default rate of interest or similar penalty or
charge, and upon such cure, no default shall exist, (b) the reinstatement the
maturity of such Allowed Class 6 Claim as the maturity existed before any
default, without recognition of any default rate of interest or similar penalty
or charge, and (c) its unaltered legal, equitable, and contractual rights with
respect to such Allowed Class 6 Claim. Any defenses, counterclaims, rights or
offset or recoupment of the Debtor or the Estate with respect to such Claims
shall vest in and inure to the benefit of the Continuing Estate.

            Except with respect to the Liens of the Black Hawk BID as provided
in the Asset Purchase Agreement, the Acquired Assets are being transferred to
Ameristar free and clear of any Liens and encumbrances. Any Lien of a holder of
an Allowed Class 6 Claim shall attach only to the cash

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<PAGE>

proceeds received pursuant to the Asset Purchase Agreement, subject to the
provisions of the Plan.

                  g. CLASS 7 (PRIORITY CLAIMS, OTHER THAN PRIORITY TAX CLAIMS).

            Class 7 is impaired under the Plan. Unless the entity holding an
Allowed Class 7 Claim agrees otherwise, the Continuing Estate Representative
shall pay to each holder of an Allowed Class 7 Claim, in full satisfaction of
such Claim, cash in the full amount of the Allowed Class 7 Claim, without
interest, on or before the latest of: (a) 10 days after the Effective Date; (b)
10 days after the date on which the Class 7 Claim becomes an Allowed Class 7
Claim; and (c) the date on which the Allowed Class 7 Claim becomes due and
payable in accordance with its terms. To the extent that an Allowed Priority
Claim is not paid on the Effective Date, the Allowed Priority Claim will accrue
interest at the federal judgment interest rate from the Effective Date through
the date of payment of the Allowed Priority Claim, which interest shall be paid
at the time the Allowed Priority Claim is paid.

                  h. CLASS 8A (GENERAL UNSECURED CLAIMS).

            Class 8A is impaired under the Plan. Pursuant to the Creditors'
Committee Settlement Agreement, holders of Allowed Class 8A Claims shall receive
a Pro Rata share of the General Unsecured Fund (i.e., $1,000,000). On the
Effective Date, the General Unsecured Fund shall be transferred to the
Creditors' Committee Counsel to be held in trust for distribution to holders of
Allowed Class 8A Claims.

            In accordance with the Creditors' Committee Settlement Agreement, on
the Effective Date, $100,000 shall be transferred to the Creditors' Committee
Counsel to fund attorneys' fees and expenses incurred by the Post-Effective Date
Committee in objecting to Class 8A Claims and in implementing the Plan. The
$100,000 to be provided to the Creditors' Committee Counsel in respect of claim
objections shall be in addition to the $1,000,000 that will be distributed to
holders of Class 8A Claims.

            The Debtor estimates that Class 8A Claims (including estimated
rejection damage claims) will total approximately $1,161,279.25. As a result,
the Debtor estimates that these creditors will receive recoveries of
approximately $0.86 on the dollar ($1,000,000 / $1,161,279.25 = $0.8611/$1.00).

                                       46

<PAGE>

                  i. CLASS 8B (CLAIMS OF HYATT).

            Class 8B is impaired under the Plan. In full satisfaction of the
Allowed Class 8B Claim, Hyatt shall receive the treatment set forth in the Hyatt
Settlement Agreement, attached as Exhibit "E" to the Plan. The Confirmation
Order shall constitute an order approving, authorizing and directing the Debtor
to enter into, and effectuating the Hyatt Settlement Agreement and each and
every term contained therein.

            Based on the Original Hyatt Settlement Agreement (discussed in
Section II.A.2.d and II.C.1), Hyatt holds an Allowed Unsecured Claim of
$18,413,243.68. Of this amount, $10,877,790.74 is subordinated to the Claims of
the First Mortgage Noteholders. Therefore, the non-subordinated portion of
Hyatt's Claim equals $7,535,452.94. Pursuant to the Plan and the Hyatt
Settlement Agreement, Hyatt shall receive approximately $1,567,203.36
($788,673.36 in Funds which Hyatt shall be entitled to retain plus $778,530 in
cash to be paid within 10 days after the Effective Date of the Plan). As a
result, the Debtor estimates that Hyatt will receive a recovery of approximately
$0.21 on the dollar ($1,567,203.36 / $7,535,452.94 = $0.2079/$1.00) on its
non-subordinated claim.

                  j. CLASS 9A (EXISTING PREFERRED STOCK - SERIES "B").

            Class 9A is impaired under the Plan. Pursuant to the terms of the
Asset Purchase Agreement and the Plan, the Debtor, or Ameristar on behalf of and
at the instruction of the Debtor pursuant to Section 2.12 of the Asset Purchase
Agreement, as the case may be, shall distribute to holders of Allowed Class 9A
Interests such holder's Pro Rata share of $1,271,186.44 in Ameristar Stock, as
calculated pursuant to Section 2.5(b) of the Asset Purchase Agreement. All Class
9A Interests shall constitute Allowed Interests.

            As noted in Section II.A.3.a, above, the Debtor has issued 30,000
shares of "Series B" preferred stock and 29,000 shares of "Series A" preferred
stock for a total of 59,000 shares of preferred stock. Pursuant to the Plan,
$2.5 million in Ameristar Stock will be distributed to the holders of Class 9A
and Class 9B Interests on a Pro Rata basis. As a result, holders of Class 9A
Interests (Existing Preferred Stock - Series "B") will receive 30/59 of $2.5
million in Ameristar Stock (30/59 x $2.5 million = $1,271,186.44) and holders of
Class 9B Interests (Existing Preferred Stock -

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<PAGE>

Series "A") will receive 29/59 of $2.5 million in Ameristar Stock (29/59 x $2.5
million = $1,228,813.56).

                  k. CLASS 9B (EXISTING PREFERRED STOCK - SERIES "A").

            Class 9B is impaired under the Plan. Pursuant to the terms of the
Asset Purchase Agreement and the Plan, the Debtor, or Ameristar on behalf of and
at the instruction of the Debtor pursuant to Section 2.12 of the Asset Purchase
Agreement, as the case may be, shall distribute to holders of Allowed Class 9B
Interests such holder's Pro Rata share of $1,228,813.56 in Ameristar Stock, as
calculated pursuant to Section 2.5(b) of the Asset Purchase Agreement. All Class
9B Interests shall constitute Allowed Interests.

            As noted in Section II.A.3.a, above, the Debtor has issued 30,000
shares of "Series B" preferred stock and 29,000 shares of "Series A" preferred
stock for a total of 59,000 shares of preferred stock. Pursuant to the Plan,
$2.5 million in Ameristar Stock will be distributed to the holders of Class 9A
and Class 9B Interests on a Pro Rata basis. As a result, holders of Class 9A
Interests (Existing Preferred Stock - Series "B") will receive 30/59 of $2.5
million in Ameristar Stock (30/59 x $2.5 million = $1,271,186.44) and holders of
Class 9B Interests (Existing Preferred Stock - Series "A") will receive 29/59 of
$2.5 million in Ameristar Stock (29/59 x $2.5 million = $1,228,813.56).

                  l. CLASS 10 (EXISTING COMMON STOCK).

            Class 10 is impaired under the Plan. Class 10 Interests will receive
and retain no value under the Plan, and Allowed Class 10 Interests will be
cancelled on the Effective Date without payment of any consideration.

      B. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

            Subject to approval of the Court, the Bankruptcy Code empowers
debtors in possession such as the Debtor to assume, assume and assign, or reject
executory contracts and unexpired leases. As a general matter, an "executory
contract" is a contract under which material performance other than the payment
of money is due by both parties. If an executory contract or unexpired lease is
rejected by the debtor in possession, the agreement will be treated as if the
debtor in possession breached its objections thereunder immediately prior to the
commencement of bankruptcy proceedings, and the

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<PAGE>

other party to the agreement may file a claim for damages incurred by reason of
the rejection. In the case of rejection of employment agreements and leases of
real property, such damage claims are subject to certain limitations imposed by
the Bankruptcy Code. If an executory contract or unexpired lease is assumed and
assigned, the assignee is required to perform the obligations under the assigned
agreements in accordance with the terms of such agreements.

            1.    ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED
                  LEASES.

                  a. SCHEDULE OF ASSUMED AND ASSIGNED AGREEMENTS.

            On the Effective Date, each of the executory contracts and unexpired
leases designated for assumption and assignment under the Asset Purchase
Agreement and listed on the Schedule of Assumed and Assigned Agreements shall be
assumed by the Debtor and assigned to Ameristar. On or before 21 days prior to
the Confirmation Hearing, the initial Schedule of Assumed and Assigned
Agreements will be filed and served on the parties to agreements listed on that
schedule.

            The Debtor reserves the right to amend the Schedule of Assumed and
Assigned Agreements at any time prior to the Effective Date to: (a) delete any
executory contract or unexpired lease and provide for its rejection under the
Plan or otherwise, or (b) add any executory contract or unexpired lease and
provide for its assumption and assignment to Ameristar. The Debtor will provide
notice of any amendment to the Schedule of Assumed and Assigned Agreements to
the party or parties to the agreement affected by the amendment.

            The Confirmation Order will constitute a Court order approving the
assumption and assignment, on the Effective Date, of the executory contracts and
unexpired leases identified on the Schedule of Assumed and Assigned Agreements.

                  b. CURE PAYMENTS.

            The Schedule of Assumed and Assigned Agreements also identifies the
Cure Payments that Bankruptcy Code sections 365(b)(1)(A) or (B) require be paid
in order to cure defaults under the executory contracts and unexpired leases to
be assumed and assigned under the Plan. The Debtor reserves the right to amend
the Schedule of Assumed and Assigned Agreements, including modifying the
proposed Cure Payments, up to the Effective Date.

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<PAGE>

            As required by Bankruptcy Code section 365(b)(1), any and all
monetary defaults under each executory contract and unexpired lease to be
assumed and assigned under this Plan will be satisfied as set forth in this
subsection.

            As required by Bankruptcy Code section 365(b)(1), any and all
monetary defaults under each executory contract and unexpired lease to be
assumed and assigned under this Plan will be satisfied in one of the following
two ways: (a) the Continuing Estate Representative will pay to the non-debtor
party to the executory contract or unexpired lease the Cure Payments, as set
forth on the Schedule of Assumed and Assigned Agreements, in cash within 10 days
following the Effective Date; or (b) the Continuing Estate Representative will
satisfy any other terms that are agreed to by the non-debtor party to an
executory contract or unexpired lease that will be assumed and assigned.

            If, however, a dispute arises regarding: (a) the amount of any
proposed Cure Payments; (b) whether adequate assurance of future performance
under an executory contract or unexpired lease to be assumed and assigned has
been provided, to the extent required under the Bankruptcy Code; or (c) any
other matter pertaining to a proposed assumption and assignment, the proposed
Cure Payments will be made within 10 days after entry of a Final Order resolving
the dispute and approving the assumption and assignment.

                  c.    OBJECTIONS TO ASSUMPTION AND ASSIGNMENT OR PROPOSED CURE
                        PAYMENTS.

            Any entity who is a party to an executory contract or unexpired
lease that will be assumed and assigned under the Plan and who either contends
that the proposed Cure Payment specified on the Schedule of Assumed and Assigned
Agreements is incorrect or otherwise objects to the contemplated assumption and
assignment must File with the Court and serve upon the Debtor and its counsel,
counsel to the Ad Hoc Committee, counsel to the Creditors' Committee and counsel
to Ameristar a written statement and supporting declaration stating the basis
for its objection. This statement and declaration must be Filed and served by no
later than 15 days after the filing of the Schedule of Assumed and Assigned
Agreements, or any amendments to the Schedule of Assumed and Assigned Agreements
(only with respect to an executory contract or unexpired lease added to the
Schedule of Assumed and Assigned Agreements by such an amendment, or with
respect to any

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<PAGE>

proposed Cure Payment that is reduced by such an amendment).

            Any entity that fails to timely File and serve such a statement and
declaration will be deemed to waive any and all objections to the proposed
assumption and assignment and the proposed Cure Payments.

                  d. RESOLUTION OF CLAIMS RELATING TO ASSUMED AND ASSIGNED
AGREEMENTS.

            In accordance with the procedures set forth in Section III.A.2 of
the Plan relating to the Cure Payments, payment of the Cure Payments with
respect to executory contracts or unexpired leases that will be assumed and
assigned under the Plan shall be deemed to satisfy, in full, any prepetition
arrearage or Rejection Damage Claim asserted in a Filed proof of Claim or listed
in the Schedules, irrespective of whether the Cure Payment is less than the
amount set forth in such proof of Claim or the Schedules. Upon the tendering of
the Cure Payment, such Claim shall be disallowed, without further order of the
Court or action by any party.

            2.    REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

                  a. REJECTED AGREEMENTS.

            On the Effective Date, the Debtor will reject all executory
contracts and unexpired leases -- except for any agreements that were previously
assumed or rejected or that will be assumed and assigned under the Plan -- to
the extent that these agreements constitute executory contracts or unexpired
leases under Bankruptcy Code section 365.

            The Confirmation Order will constitute a Court order approving the
rejection, on the Effective Date, of the executory contracts and unexpired
leases not assumed and assigned under the Plan.

                  b. BAR DATE FOR REJECTION DAMAGE CLAIMS.

            Any Rejection Damage Claim or other Claim for damages arising from
the rejection under the Plan of an executory contract or unexpired lease must be
Filed and served upon the Continuing Estate Representative, the Ad Hoc
Committee, the Post-Effective Date Committee, and their respective counsels,
within 30 days after the mailing of notice of the occurrence of the Effective
Date. Any such Claims that are not timely Filed and served will be forever
barred and unenforceable against the Debtor, the Estate, the Continuing Estate,
Ameristar and their respective

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property, and entities holding these Claims will be barred from receiving any
distributions under the Plan on account of such untimely Claims.

      C. MEANS OF EXECUTION AND IMPLEMENTATION OF THE PLAN.

            The Plan does not contemplate the continuation of the Debtor or the
Debtor's business (other than by Ameristar). The Plan provides for the transfer
of the Acquired Assets to Ameristar (or its assignee) free and clear of any and
all Liens, Claims and other encumbrances in accordance with the Asset Purchase
Agreement (except as otherwise provided in the Asset Purchase Agreement and the
Plan). The Plan provides that the Debtor's remaining assets (other than the
Ameristar Stock) will be liquidated or otherwise reduced to cash and that the
proceeds from the liquidation of assets of the Estate will be distributed by the
Continuing Estate Representative to the holders of various Claims and Interests
in the manner provided for in the Plan. The Plan also provides for the approval
of certain settlement agreements with holders of Allowed Claims (Class 4, Class
8A, and Class 8B).

            The Plan, together with the Asset Purchase Agreement and the
Confirmation Order, shall constitute a "plan of reorganization" as such term is
used in Sections 354 and 361 of the Tax Code. The transactions contemplated by
the Plan, the Asset Purchase Agreement, and the Confirmation Order together
shall constitute a "reorganization" within the meaning of Section 368 of the Tax
Code. Approval of the Plan by the Debtor and the confirmation of the Plan by the
Bankruptcy Court shall together constitute the adoption by the Debtor of a plan
of complete liquidation pursuant to which all of the Debtor's assets remaining
following transfer to Ameristar pursuant to the Asset Purchase Agreement shall
be distributed to holders of Allowed Claims and Allowed Interests as provided in
the Plan. Within thirty (30) days following the Effective Date, the Continuing
Estate Representative shall file with the Internal Revenue Service a completed
IRS Form 966.

            1. FUNDING OF THE PLAN.

            Obligations required to be satisfied in cash under the Plan on and
after the Effective Date will be satisfied from the cash portion of the Transfer
Proceeds paid by Ameristar on the Effective Date, the Effective Date Cash, and
amounts deposited into the Liquidation Account.

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<PAGE>

            2. TRANSFER OF THE ACQUIRED ASSETS TO AMERISTAR.

            In accordance with the Asset Purchase Agreement, which is
incorporated by reference as if fully set forth herein, Ameristar (or its
assignee) shall acquire the Acquired Assets for the consideration set forth in
section 2.5 of the Asset Purchase Agreement. The terms and conditions of the
transfer of the Acquired Assets to Ameristar shall be governed by the Asset
Purchase Agreement. To the extent that there is an inconsistency between the
Asset Purchase Agreement and the Plan regarding the transfer of the Acquired
Assets, the terms of the Asset Purchase Agreement shall control. Except as set
forth herein, the Acquired Assets shall be transferred to Ameristar free and
clear of any and all Liens, Claims, interests and encumbrances.

            The Confirmation Order shall constitute an order of the Bankruptcy
Court approving the transfer of the Acquired Assets to Ameristar, as provided
for in the Plan and the Asset Purchase Agreement, and all the transactions
contemplated by the Asset Purchase Agreement, pursuant to Bankruptcy Code
sections 363(b), (f) and (m), 1123(a)(5)(D) and (b)(4), and 1129.

            3. APPROVAL OF SETTLEMENT AGREEMENTS.

            The Confirmation Order shall constitute an order of the Bankruptcy
Court approving, authorizing and directing the Debtor to enter into, and
effectuating the terms of the FF&E Settlement Agreement and the Hyatt Settlement
Agreement. The FF&E Settlement Agreement and the Hyatt Settlement Agreement
provide for the compromise of claims, the release of certain liens, claims and
interests by the parties thereto, and the treatment of the FF&E Lender's Claims
and Hyatt's Claims as set forth in the Plan. The Confirmation Order shall also
constitute an order of the Bankruptcy Court approving the Creditors' Committee
Settlement Agreement.

            4. THE CONTINUING ESTATE.

                  a. CONTINUATION OF THE ESTATE.

            On and after the Effective Date, the Continuing Estate shall hold
title to all of the assets of the Estate, as well as any property acquired after
the Effective Date that otherwise would become property of the Estate under
Bankruptcy Code section 541, free and clear of all Claims, liens, encumbrances,
and other interests, except as otherwise provided in the Plan. The Continuing
Estate shall hold such assets for the benefit of the entities that are entitled
under the Plan to receive that

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<PAGE>

property or the net proceeds of that property. The Continuing Estate shall not
be authorized to operate any business, but shall have the rights, powers, and
duties conferred upon the Continuing Estate and the Continuing Estate
Representative pursuant to the Continuing Estate Agreement and the Plan. The
Continuing Estate shall be fully liquidated and cash shall be distributed to
holders of Allowed Claim and Interests as soon as is reasonably practicable
following the Effective Date.

                  b. APPOINTMENT OF THE CONTINUING ESTATE REPRESENTATIVE.

            The Confirmation Order shall appoint, effective on the Effective
Date, Michael Armstrong (or such other individual as designated by the Ad Hoc
Committee) to act as the Continuing Estate Representative to administer the
Continuing Estate pursuant to the Plan. The Continuing Estate Representative
shall serve without any bond and shall act in accordance with the Continuing
Estate Agreement and the Plan. The Continuing Estate Representative shall be
entitled to receive, on a monthly basis, payment of fees and reimbursement of
reasonable expenses, without further Court approval, from the assets of the
Continuing Estate, in accordance with the Continuing Estate Agreement. The
Continuing Estate Representative shall serve for the duration of the Continuing
Estate, subject to earlier death, resignation, incapacity or removal as
specifically provided in the Continuing Estate Agreement.

            The Continuing Estate Representative shall be authorized, without
further order of the Court, to employ such persons, including professionals, as
deemed necessary to enable the Continuing Estate Representative to perform its
functions under the Plan, and the costs of such employment and other
expenditures shall be paid solely from assets of the Continuing Estate; provided
however, that any and all fees and expenses incurred by the Continuing Estate
Representative (including professional fees) shall not exceed $250,000 unless
otherwise agreed to in writing by the Ad Hoc Committee. The Debtor expects that
the Continuing Estate Representative will retain Irell & Manella, LLP (counsel
to the Debtor during the Case) as its counsel.

                  c. POWERS AND DUTIES OF THE CONTINUING ESTATE REPRESENTATIVE.

            On and after the Effective Date, the Continuing Estate
Representative shall be the duly authorized representative of the Continuing
Estate for the purpose of implementing this Plan. Among other things, the
Continuing Estate Representative shall have the following rights, powers and
duties:

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<PAGE>

            1. Hold and distribute, in accordance with the Plan, all assets
transferred to the Continuing Estate. After the Effective Date, the affairs of
the Continuing Estate and all assets held or controlled by the Continuing Estate
Representative shall be managed under the direction of the Continuing Estate
Representative in accordance with the terms of the Continuing Estate Agreement.

            2. Object to Claims and Interests, except for Claims and Interests
classified in Class 1, Class 2, Class 4, Class 5, Class 8A Class 8B, Class 9A
and Class 9B and prosecute or settle such objections and defend claims and
counterclaims asserted in connection therewith (including by way of example the
Debtor's rights of recoupment, setoff or otherwise). Except as otherwise
provided in Section II.B.1 of the Plan (regarding allowance of Administrative
Claims) and Section IV.E.1 of the Plan (regarding objections to Class 8A Claims
which right shall be vested in the Post-Effective Date Committee), objections to
any Claims or Interests shall be Filed and served upon the holder of such Claim
or Interest no later than the date (the "Claims/Interests Objection Deadline")
that is the later of (a) 120 days after the Effective Date, unless extended by
the Court, and (b) 120 days after the date on which a proof of Claim or Interest
has been Filed, unless extended by the Court.

            3. Administer the collection, prosecution, settlement or abandonment
of Avoidance Actions; provided, however, that the Continuing Estate
Representative shall not commence an Avoidance Action without the written
consent of the Ad Hoc Committee.

            4. File all tax and regulatory forms, returns, reports and other
documents required with respect to the Continuing Estate. Any federal and state
income or franchise tax returns of the Debtor filed after the Effective Date
shall be submitted to Ameristar for its review and approval at least twenty (20)
days prior to the earlier of the filing or due date thereof, and the Continuing
Estate Representative shall make such changes to such tax returns as Ameristar
reasonably requests.

            5. As directed by the Ad Hoc Committee, file suit or any appropriate
motion for relief in the Court or in any other court of competent jurisdiction
to resolve any claim, disagreement, conflict or ambiguity in connection with the
implementation of the Asset Purchase Agreement and any other exercise of its
rights, powers or duties.

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<PAGE>

            6. As soon as practicable, but in no event later than 10 days after
the Effective Date, serve the notice of Effective Date on all holders of Claims
and Interests. The notice of Effective Date shall include a notice that the bar
date for filing Rejection Damage Claims (or other Claims for damages arising
from the rejection under the Plan of executory contracts or unexpired leases)
shall be 30 days after the mailing of notice of the Effective Date as set forth
in Section III.B.2 of the Plan.

            7. Take all steps necessary to wind up the affairs of the Debtor and
the Case and take all such action as is necessary to enable the Debtor to comply
with its obligations under the Asset Purchase Agreement and the Plan.

            8. Take all necessary actions and File all appropriate motions to
obtain an order closing the Case.

            9. Dissolve (or cause to be dissolved) the Debtor corporation
pursuant to the laws of the State of Colorado after the liquidation of the
Debtor's remaining assets and the distribution of all of the assets of the
Estate to the holders of various Claims and Interests in the manner provided for
in the Plan.

            10. Submit all required U.S. Trustee quarterly reports and pay all
required U.S. Trustee Fees until the Case is closed.

            11. Pursuant to Rule 12g-4 of the Securities Exchange Act of 1934,
as amended, file a Form 15, "Certification of termination of registration of a
class of securities under Section 12 or notice of suspension of duty to file
reports pursuant to Section 13 and 15(d) of the Act."

                  d. TERMINATION OF THE CONTINUING ESTATE.

            The Continuing Estate shall terminate when the Continuing Estate
Representative has performed all of its duties under the Plan and the Continuing
Estate Agreement, including the final distribution of all the property of the
Continuing Estate, which date shall not be more than 14 months after the
Effective Date; provided, however, that the Ad Hoc Committee may, in its sole
discretion, keep the Continuing Estate open so long as shall be necessary to
liquidate and distribute property and resolve any and all litigation relating to
the Plan, the Asset Purchase Agreement, or the Case.

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<PAGE>

                  e. ADDITIONAL PROVISIONS OF THE CONTINUING ESTATE AGREEMENT.

            In addition to the provisions in the Plan with respect to the
Continuing Estate Representative, the Continuing Estate Agreement will provide
for, among other things, other actions to be taken by the Continuing Estate
Representative, the removal of the Continuing Estate Representative or
appointment of a successor Continuing Estate Representative, and the effect of
actions by the Continuing Estate Representative. To the extent not set forth in
the Plan, the functions of the Continuing Estate, the powers and duties of the
Continuing Estate Representative, and the rights of the holders of property in
the Continuing Estate shall be governed by the provisions of the Continuing
Estate Agreement.

      5. THE POST-EFFECTIVE DATE COMMITTEE.

            a. MANAGEMENT AND POWERS OF THE POST-EFFECTIVE DATE COMMITTEE.

            The Post-Effective Date Committee shall be formed on the Effective
Date and shall consist of three (3) Persons to be selected by the Creditors'
Committee prior to the Effective Date. The Post-Effective Date Committee shall
have the ability and authority to: (a) object to any and all Class 8A Claims,
(b) prosecute or settle such objections and defend claims and counterclaims
asserted in connection therewith (including by way of asserting the Debtor's
rights of recoupment, setoff or otherwise), (c) commence or continue proceedings
to estimate the amount of any Class 8A Claim, and (d) take any other action
related to the foregoing; provided, however, that objections to any Class 8A
Claims shall be Filed and served upon the holder of such Claim no later than the
date that is the later of (a) 120 days after the Effective Date, unless extended
by the Court, and (b) 120 days after the date on which a proof of Claim or
Interest has been Filed, unless extended by the Court. After the Effective Date,
only the Post-Effective Date Committee shall have the authority to File, settle,
compromise, withdraw or litigate to judgment objections to Class 8A Claims.

            b. EMPLOYMENT AND COMPENSATION OF PROFESSIONALS.

            The Post-Effective Date Committee is authorized, without further
order of the Court, to employ such Persons, including professionals, as it may
deem necessary to enable it to perform its functions under the Plan. In
accordance with the Creditors' Committee Settlement Agreement, on the Effective
Date, $100,000 (the "Creditors' Fund") shall be transferred to the Creditors'
Committee

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<PAGE>

Counsel to fund all attorneys' fees and expenses incurred by the Post-Effective
Date Committee and its members in objecting to Class 8A Claims and in
implementing the Plan; provided, however, that the fees and expenses incurred by
the Post-Effective Date Committee shall not exceed $100,000 and no amounts in
excess of the Creditor's Fund shall be transferred to the Post-Effective Date
Committee for any reason whatsoever. The Debtor expects that the Post-Effective
Date Committee will retain Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP
(counsel to the Creditors' Committee during the Case) as its counsel.

                  c. DISSOLUTION OF THE POST-EFFECTIVE DATE COMMITTEE.

            The Post-Effective Date Committee shall be dissolved on the third
Business Day after the earlier of: (1) the resolution of all Class 8A Disputed
Claims and (2) the final distribution to holders of Allowed Class 8A Claims. To
the extent that, at the time of such dissolution, any portion of the Creditor's
Fund remains unspent, such amounts shall be immediately transferred to the
Continuing Estate Representative to be deposited into the Liquidation Account
for distribution in accordance with the Plan.

      6. THE AD HOC COMMITTEE.

                  a. POST-EFFECTIVE DATE POWERS.

            On and after the Effective Date, the Ad Hoc Committee shall be
authorized to: (1) object to Claims and Interests, except for Claims and
Interests classified in Class 1, Class 2, Class 4, Class 5, Class 8A and Class
8B, (2) enforce the rights of the Debtor and the Estate under the Asset Purchase
Agreement and (3) take all necessary actions to implement the Plan. Except as
otherwise provided in Section II.B.1 of the Plan (regarding allowance of
Administrative Claims) and Section IV.E.1 of the Plan (regarding objections to
Class 8A Claims which right shall be vested in the Post-Effective Date
Committee), the Ad Hoc Committee shall File and serve objections upon the holder
of such Claim or Interest no later than the Claims/Interests Objection Deadline,
unless extended by the Court.

                  b. PAYMENT OF AD HOC COMMITTEE AND INDENTURE TRUSTEE
                     SUBSTANTIAL CONTRIBUTION CLAIMS.

            Please see Section III.A.2.e, above, and Section IV.F.2 of the Plan
for a description

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<PAGE>

and explanation of the Substantial Contribution Claims.

            7. CANCELLATION OF INTERESTS.

            On the Effective Date, all Interests in the Debtor (including
Existing Common Stock and Existing Preferred Stock) will be cancelled, annulled,
and extinguished, and will be deemed to of no further force or effect without
any further action by any party. The holders of Class 9A and Class 9B Interests
shall receive in consideration for such cancellation, annulment, and
extinguishment the Ameristar Stock, as provided in the Asset Purchase Agreement
and the Plan.

            8. TERMINATION OF OFFICERS AND DIRECTORS.

            On and after the Effective Date, and without further action by any
party: (A) the Debtor shall have no right to operate a business; (B) the
Debtor's officers and directors automatically will be terminated; provided,
however, that notwithstanding the foregoing, the Continuing Estate
Representative, the Ad Hoc Committee and the Post-Effective Date Committee shall
have and retain such authority as set forth in the Plan to dispose of the assets
of the Continuing Estate and otherwise implement the Plan in accordance with its
terms. On the Effective Date, the Debtor shall be deemed liquidated and
dissolved as a corporate entity pursuant to applicable law, without further
action by any entity. The Continuing Estate Representative shall be authorized
to execute any documents that implement or are in aid of this Section.

      D. OTHER PLAN PROVISIONS.

            1. REVOCATION OF PLAN/NO ADMISSIONS.

            The Debtor, with the written consent of the Ad Hoc Committee,
reserves the right to revoke or withdraw the Plan prior to the Confirmation
Date. Notwithstanding anything to the contrary in the Plan, if the Plan is not
confirmed or the Effective Date does not occur, the Plan will be null and void,
and nothing contained in the Plan or the Disclosure Statement will: (a) be
deemed to be an admission by the Debtor with respect to any matter set forth in
the Plan, including liability on any Claim or the propriety of any Claim's
classification; (b) constitute a waiver, acknowledgment, or release of any
Claims against, or any Interests in, the Debtor, or of any claims of the Debtor;
or (c) prejudice in any manner the rights of the Debtor, the Estate, or any
creditors in

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any further proceedings.

            2. DISSOLUTION OF CREDITORS' COMMITTEE.

            On the Effective Date, the Creditors' Committee shall be released
and discharged from the rights and duties arising from or related to the Case,
except with respect to final applications for professionals' compensation. The
professionals retained by the Creditors' Committee and the members thereof shall
not be entitled to compensation or reimbursement of expenses for any services
rendered or expenses incurred after the Effective Date, except for services
rendered and expenses incurred in connection with any applications by such
professionals or Creditors' Committee members for allowance of compensation and
reimbursement of expenses pending on the Effective Date or timely Filed after
the Effective Date as provided in the Plan, as approved by the Court.

            3. EXEMPTION FROM CERTAIN TRANSFER TAXES.

            In accordance with Bankruptcy Code section 1146(c), the issuance,
transfer or exchange of a security, or the making or delivery of an instrument
of transfer under the Plan may not be taxed under any law imposing a stamp tax
or similar tax.The Confirmation Order shall direct all governmental officials
and agents to forego the assessment and collection of any such tax or
governmental assessment and to accept for filing and recordation any of the
foregoing instruments or other documents without payment of such tax or other
governmental assessment.

            4. MODIFICATIONS OF PLAN.

            Subject to the restrictions set forth in Bankruptcy Code section
1127, the Debtor, with the written consent of the Ad Hoc Committee, reserves the
right to alter, amend, or modify the Plan before its substantial consummation.

            5. PLAN SHALL NOT AFFECT RIGHTS OF FIRST PLACE LLC.

            Notwithstanding any other provision of the Plan or the Asset
Purchase Agreement, the rights and interests of First Place LLC in connection
with the real property subject to the state court litigation pending in the
District Court for Gilpin County, Colorado (the "Disputed Property") shall
remain unaffected; provided, however, that to the extent a court of competent
jurisdiction determines that the Debtor possesses any rights with respect to the
Disputed Property (including any ownership

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<PAGE>

rights and/or the Debtor's right to compel First Place to convey all or a
portion of the Disputed Property to the Debtor), such rights of the Debtor shall
be deemed part of the Acquired Assets.

      E. EFFECT OF CONFIRMATION OF THE PLAN.

            1. NON-DISCHARGE OF THE DEBTOR.

            Upon the Effective Date, Bankruptcy Code section 1141 shall become
applicable with respect to the Plan. In accordance with Bankruptcy Code section
1141(d)(A)(3), this Plan does not discharge the Debtor. Bankruptcy Code section
1141 nevertheless provides, among other things, that the property dealt with by
the Plan is free and clear of all Claims and Interests of creditors, equity
security holders, and of general partners of the Debtor. Accordingly, no entity
holding a Claim against or Interest in the Debtor may receive any payment from,
or seek recourse against, any assets that are to be distributed under this Plan
other than assets required to be distributed to that entity under the Plan. As
of the Effective Date, all parties are precluded from asserting against any
property that is to be distributed under this Plan any Claims, rights, causes of
action, liabilities, or Interests based upon any act, omission, transaction, or
other activity that occurred before the Effective Date except as expressly
provided in this Plan or the Confirmation Order.

            2. BINDING EFFECT OF PLAN AND INJUNCTIONS.

            Immediately upon the occurrence of the Effective Date, the terms of
the Plan (including, without limitation, the terms of the settlement agreements
attached to the Plan as exhibits "C," "D" and "E" and incorporated herein by
reference) and the Confirmation Order shall be deemed binding upon the Debtor,
any and all holders of Claims or Interests (including, without limitation, the
Indenture Trustee) (irrespective of whether such Claims or Interests are
impaired under the Plan or whether the holders of such Claims or Interests
accepted, rejected or are deemed to have accepted or rejected the Plan), any and
all non-Debtor parties to executory contracts and unexpired leases with the
Debtor, any and all non-Debtor parties who hold either a legal or equitable
interest in any of the Acquired Assets (including, without limitation, the
Indenture Trustee) and any and all entities who are parties to or are subject to
the settlements, compromises, releases, discharges and injunctions described in
the Plan and the respective heirs, executors, administrators, successors or
assigns, if any, of any of the foregoing.

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<PAGE>

            The Confirmation Order is and shall be (i) effective as a
determination that, on the Effective Date of the Plan, except as otherwise
provided in the Asset Purchase Agreement and the Plan, all Liens existing as to
the Acquired Assets prior to such date have been unconditionally released,
discharged, and terminated as to the Acquired Assets, and that the conveyance of
the Acquired Assets has been effected, and all parties asserting one or more
Liens are hereby permanently enjoined from asserting any such Lien against the
Acquired Assets or Ameristar (or its assignee), except for Liens which are
otherwise provided for in the Plan and Asset Purchase Agreement, and (ii)
binding upon and govern the acts of all entities including without limitation,
all filing agents, filing officers, title agents, title companies, recorders of
mortgages, recorders of deeds, registrars of deeds, registrars of patents,
trademarks or other intellectual property, administrative agencies, governmental
departments, secretaries of state, federal, state, and local officials, and all
other persons and entities who may be required by operation of law, the duties
of their office, or contract, to accept, file, register or otherwise record or
release any documents or instruments, or who may be required to report any title
or state of title in or to any of the Acquired Assets.

            As of the Effective Date, all entities that have held, currently
hold or may hold a Claim or other debt or liability against the Debtor or its
property or an Interest or any other right related to an Interest of the Debtor
are permanently enjoined from taking any of the following actions on account of
any such discharged Claims, debts or liabilities or terminated Interest or
rights: (i) commencing or continuing in any manner any action or other
proceeding against Ameristar (or its assignee) and its property, including the
Acquired Assets; (ii) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order against Ameristar (or its assignee)
and its property, including the Acquired Assets; (iii) creating, perfecting or
enforcing any Lien or encumbrance against Ameristar (or its assignee) and its
property, including the Acquired Assets; and (iv) commencing or continuing any
action, in any manner or any place, that does not comply with or is inconsistent
with the provisions of the Plan or the Bankruptcy Code.

            3. PAYMENT OF U.S. TRUSTEE FEES.

            The Continuing Estate Representative shall pay all U.S. Trustee Fees
in accordance with Sections II.B.1 and IV.D.3 of the Plan.

            4. RETENTION OF JURISDICTION.

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<PAGE>

            Notwithstanding the entry of the Confirmation Order or the
occurrence of the Effective Date, the Court shall retain jurisdiction over the
Case after the Effective Date to the fullest extent provided by law as more
particularly set forth in Section VI.D of the Plan.

      F. CONSULTING AGREEMENTS.

            As part of the transactions contemplated by the Asset Purchase
Agreement and the Plan, Ameristar anticipates entering into the following
consulting agreements with the following officers of the Debtor in order to
effect a smooth transition to new ownership: (1) Michael Armstrong (CFO), 2 year
consulting agreement for Mr. Armstrong's current salary of $151,800 per year
(with a 2-year Colorado gaming industry non-compete provision); (2) Timothy Rose
(President), 2 year consulting agreement for Mr. Rose's current salary of
$230,230 per year (with a 2-year Colorado gaming industry non-compete
provision); and (3) Jerry Dauderman (CEO), 1 year consulting agreement for Mr.
Dauderman's current salary of $240,000 per year (with a 2-year Colorado gaming
industry non-compete provision).

IV. CONFIRMATION PROCEDURES

            BECAUSE THE LAW WITH RESPECT TO CONFIRMATION OF A PLAN OF
REORGANIZATION IS VERY COMPLEX, CREDITORS CONCERNED WITH ISSUES REGARDING
CONFIRMATION OF THE PLAN SHOULD CONSULT WITH THEIR OWN ATTORNEYS. The following
discussion is intended solely for the purpose of providing basic information
concerning certain confirmation issues. The Debtor cannot and does not represent
that the discussion contained below is a complete summary of the law on this
topic.

            Many requirements must be met before the Bankruptcy Court may
confirm the Plan. Some of the requirements discussed in this Disclosure
Statement include acceptance of the Plan by the requisite number of holders of
Claims and Interests, whether the Plan pays such holders at least as much as
they would receive in a liquidation of the Debtor under chapter 7 of the Code,
and whether confirmation of the Plan is likely to be followed by the need for
further financial reorganization. These requirements, however, are not the only
requirements for confirmation, and the Bankruptcy Court will not confirm the
Plan unless and until it determines that the Plan satisfies all applicable
requirements, including requirements not referenced in this Disclosure
Statement.

      A. VOTING AND RIGHT TO BE HEARD AT CONFIRMATION.

            1. WHO MAY SUPPORT OR OBJECT TO CONFIRMATION OF THE PLAN.

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<PAGE>

            Any party in interest with standing may support or object to the
confirmation of the Plan. Even entities that may not have a right to vote may
still have a right to support or object to Confirmation of the Plan.

            2. WHO MAY VOTE TO ACCEPT OR REJECT THE PLAN.

            A holder of a Claim or Interest generally has a right to vote for or
against the Plan if its Claim or Interest is both "allowed" for purposes of
voting and classified in an impaired Class (the Debtor believes that Classes 2,
3, 4, 5, 6, 7, 8A, 8B, 9A, 9B and 10 are impaired under the Plan).

            3. WHAT IS AN ALLOWED CLAIM OR INTEREST FOR VOTING PURPOSES.

            As noted above, a creditor's Claim must be "allowed" for purposes of
voting in order for such creditor to have the right to vote on the Plan.
Generally, for voting purposes, a Claim is deemed "allowed" if: (i) a proof of
Claim or Interest was timely filed; or (ii) if no proof of Claim or Interest was
filed, the Claim or Interest is identified in the Schedules as other than
"disputed," "contingent," or "unliquidated." In any case, when an objection to a
Claim or Interest has been filed, the Claim or Interest holder cannot vote
unless the Bankruptcy Court, after notice and hearing, either overrules the
objection or allows the Claim or Interest for voting purposes.

            Under the Plan, the Class 1 Secured Claim of Black Hawk BID, the
Class 2 Secured Claim of PCL, the Class 4 Secured Claim of the FF&E Lender, the
Class 5 Secured Claim of the First Mortgage Noteholders and the Class 8B
Unsecured Claim of Hyatt are Allowed Claims.

            4. WHAT IS AN IMPAIRED CLAIM.

            As noted above, a Claim which is allowed for voting purposes only
has the right to vote on the Plan if it is in a Class that is impaired under the
Plan and if it will receive or retain any consideration under the Plan. A Class
is impaired if the Plan alters the legal, equitable, or contractual rights of
the members of that Class. The Debtor believes that the following Classes are
impaired under the Plan and entitled to vote: Classes 2, 3, 4, 5, 6, 7, 8A, 8B,
9A and 9B.

            5. WHO IS NOT ENTITLED TO VOTE.

            The holders of the following types of Claims or Interests are not
entitled to vote on the Plan: (a) Claims or Interests that have been disallowed;
(b) Claims or Interests that are subject to a pending objection and which have
not been allowed for voting purposes; (c) Claims entitled to

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priority pursuant to Code sections 507(a)(1), (a)(2), and (a)(7); (d) Secured
Claim of Black Hawk BID (Class 1); and (e) Existing Common Stock (Class 10).
Holders of Claims entitled to priority pursuant to Code sections 507(a)(1),
(a)(2), and (a)(7) are not entitled to vote because such Claims are required to
receive certain treatment specified by the Code and are thus not classified
under the Plan. Holders of Existing Common Stock Interests are not entitled to
vote because they will receive nothing under the Plan and are presumed to have
rejected the Plan. The other Claims and Interests are not entitled to vote on
the Plan because such Claims and Interests are not impaired.

            6. VOTES NECESSARY TO CONFIRM THE PLAN.

            The Bankruptcy Court cannot confirm the Plan unless, among other
things: (a) at least one impaired Class has accepted the Plan without counting
the votes of any insiders within that Class; and (b) either all impaired Classes
have voted to accept the Plan, or the Plan is eligible to be confirmed by
Cramdown with respect to any dissenting impaired Class as discussed in Section
IV.A.7 and IV.D hereof.

            7. REQUEST FOR CONFIRMATION DESPITE NONACCEPTANCE BY IMPAIRED
               CLASSES.

            As noted above, Class 10 (Existing Common Stock) is deemed to have
rejected the Plan. Even though one Class of Interests under the Plan is deemed
to have rejected the Plan, the Bankruptcy Court nevertheless may confirm the
Plan under the "cram down" provisions of Section 1129(b) of the Bankruptcy Code
if all of the other provisions of Section 1129(a) of the Bankruptcy Code are
met. Thus, the Debtor presently intends to undertake to have the Bankruptcy
Court confirm the Plan under the "cram down" provisions of section 1129(b) of
the Bankruptcy Code.

      B. "BEST INTERESTS TEST."

            Another confirmation requirement is the "Best Interests Test"
incorporated in Bankruptcy Code section 1129(a)(7). Under the best interests of
creditors test, the Plan is confirmable if, with respect to each impaired Class
of Claims or Interests, each holder of an Allowed Claim or Allowed Interest in
such Class has either (i) accepted the Plan, or (ii) receives or retains under
the Plan, on account of its Claim or Interest, property of a value, as of the
Effective Date, that is not less than the amount such holder would receive or
retain if the Debtor was to be liquidated under chapter 7 of the Bankruptcy
Code.

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            Each holder of an Allowed Claim in Classes 4, 5 and 8B is expected
to accept the Plan. Each holder of a Claim in Class 8A and each holder of an
Interest in Classes 9A and 9B will receive far more under the Plan than such
creditor or Interest holder would receive if the Debtor was to be liquidated
under chapter 7 of the Bankruptcy Code. Holders of Interests in Class 10 would
not receive any consideration under a chapter 7 liquidation.

            In a chapter 7 case, a chapter 7 trustee with no familiarity with
the Case would be appointed to complete the liquidation and distribution
process. The trustee would need to retain new professionals, who would be
unfamiliar with the Case, to assist with the liquidation of the Debtor's assets,
the pursuit of claims and causes of action, and the objection to Disputed Claims
and Interests. The trustee and the trustee's professionals would have to expend
considerable time and effort to understand the issues in the converted
bankruptcy case. In addition, because the chapter 7 trustee would likely be
unwilling and unable to give the representations and warranties currently
contained in the Asset Purchase Agreement, it is extremely likely that the
Ameristar transaction would be jeopardized or that the consideration paid by
Ameristar would be greatly reduced. Moreover, section 7.1(b) of the Asset
Purchase Agreement permits Ameristar to terminate the Asset Purchase Agreement
in the event the Debtor's Case is converted to chapter 7. Furthermore, section
326 of the Bankruptcy Code provides that the chapter 7 trustee is entitled to
assert administrative expense priority in the form of its statutory fees. In
addition, costs of liquidation would include any obligations and unpaid expenses
incurred by the chapter 7 trustee as part of the administration of the Debtor's
assets (including professional fees and costs and other trade payables and
liabilities), and the obligations and unpaid expenses incurred by the Debtor
during its Chapter 11 Case, including obligations trade creditors, the fees and
costs of professionals employed in the Case and amounts owed to the members of
the Creditors' Committee.

            Even assuming the Ameristar transaction were to close and that the
chapter 7 trustee did not incur any fees and expenses, the Debtor believes that
in a chapter 7 liquidation, the holders of Class 8A Claims would receive a
significantly smaller distribution on account of their Claims and that holders
of Interests in Classes 9A, 9B and 10 would receive no distribution on account
of their Interests by virtue of (i) the size of the First Mortgage Noteholders'
and the FF&E Lender's Secured

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Claims which encumber almost all of the Debtors' assets, (ii) the Administrative
Claims and Priority Claims that are senior to Class 8A Claims, (iii) the
unsecured deficiency Claims that would be held by the holders of Secured Claims,
and (iv) the substantial Allowed Unsecured Claim of Hyatt ($18,413,243.68). In a
chapter 7 liquidation, the holders of Secured Claims, Administrative Claims and
Priority Claims (including Priority Tax Claims) must be paid in full before the
holders of Unsecured Claims could be paid, and the holders of Unsecured Claims
must be paid in full before the holders of Interests may receive any
consideration on account of their Interests.

            Based on the Debtor's Schedules, the Debtor made transfers in the
aggregate amount of approximately $13,000,000 during the 90-day period (and,
with respect to insiders, 1-year period) prior to the Petition Date.(14) The
Debtor has not conducted a detailed analysis of potential avoidance actions, but
believes that virtually all of these payments were made in the ordinary course
of business and are not recoverable. In any event, the Debtor believes that even
if it were to institute avoidance actions, the recoveries from these actions
would yield little to holders of Unsecured Claims in a chapter-7 liquidation and
certainly far less than the recoveries such creditors will receive under the
Plan. As explained above, if the Case were converted to chapter 7, it is
extremely likely that the Ameristar transaction would be jeopardized or that the
consideration paid by Ameristar would be greatly reduced. As a result, any
recoveries to unsecured creditors derived from successful avoidance actions
would be diluted by at least the following Claims: (i) the Administrative Claims
and Priority Claims that are senior to Unsecured Claims (including the fees and
expenses incurred by a chapter 7 trustee in prosecuting the avoidance actions),
(ii) the large unsecured deficiency Claims that would be held by the First
Mortgage Noteholders and the FF&E Lender, which deficiency claims would likely
be tens of millions of dollars based on the depressed value of the Debtor's
assets in a chapter 7 case, and (iii) the $18,413,243.68 Claim of Hyatt, which
Claim is being resolved under the Plan pursuant to the Hyatt Settlement
Agreement.(15)

----------
(14)  This amount excludes transfers less than $600 because the Debtor does not
believe it would be practical or cost effective to commence avoidance actions
seeking to recover less than this amount.

(15)  As explained below, the Debtor estimates that holders of General Unsecured
Claims will receive recoveries of approximately $0.86 / $1.00. Therefore, even
if the chapter 7 trustee were somehow able to recover all of the payments made
within the 90-day period prior to the Petition Date, the dilutive effect of
Administrative Claims, Priority Claims, unsecured deficiency claims, and Hyatt's

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            In contrast, under the Plan, which incorporates the terms of the
Asset Purchase Agreement, the Hyatt Settlement Agreement, the FF&E Settlement
Agreement, and the Creditors' Committee Settlement Agreement, holders of Allowed
Unsecured Claims in Class 8A will receive their Pro Rata share of $1,000,000
(which based on the Debtor's estimates will yield recoveries to unsecured
creditors of approximately $0.86 on the dollar)(16) and holders of Allowed
Interests in Classes 9A and 9B will receive their Pro Rata share of $2.5 million
in Ameristar Stock, subject to the terms of the Plan.

      C. FEASIBILITY.

            The Bankruptcy Code requires that, in order for the Plan to be
confirmed by the Bankruptcy Court, it must be demonstrated that consummation of
the Plan is not likely to followed by the liquidation or the need for further
financial reorganization of the Debtor, unless such liquidation or
reorganization is proposed in the Plan. See 11 U.S.C. Section 1129(a)(11). The
Plan provides for the liquidation of the Debtor's assets and the distribution of
the proceeds from the transfer of the Debtor's assets to holders of Allowed
Claims and Interests. As a result, the Plan satisfies the feasibility
requirement set forth in Bankruptcy Code section 1129.

      D. CRAMDOWN.

            Even if all classes do not consent to the proposed treatment of
their claims and interests under a plan, the plan nonetheless may be confirmed
if the dissenting classes are treated in the manner prescribed by the Bankruptcy
Code. The process by which dissenting classes are forced to abide by the terms
of a plan is commonly referred to as "cramdown." The Bankruptcy Code allows
dissenting classes to be crammed down if the plan does not "discriminate
unfairly" and is "fair and equitable." The Bankruptcy Code does not define
unfair discrimination, but it does set forth certain minimum requirements for
"fair and equitable" treatment. For a class of secured claims, "fair and
equitable" can mean that the secured claimants retain their liens and receive
deferred cash payments the present value

------------
Claims, as noted above, would result in a distribution significantly less than
the estimated distribution under the Plan.

(16)  As noted in section II.c.7.c, above, the Debtor estimates that General
Unsecured Claims (including estimated rejection damage claims) will total
approximately $1,161,279.25. Under the Plan, these creditors will receive their
Pro Rata share $1,000,000 in respect of their Allowed Claims. ($1,000,000 /
$1,161,279.25 = $0.8611/$1.00). 2 These are complex statutory provisions

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of which equals the value of their interest in collateral. For a class of
unsecured claims, a plan is fair and equitable if the claims in that class
receive value equal to the allowed amount of the claims, or, if the unsecured
claims are not fully satisfied, no claim or interest that is junior to such
claims receives or retains anything under the plan. Accordingly, if a class of
unsecured claims rejects a plan under which a junior class (e.g., a class of
interest holders) will receive or retain any property under the plan, the plan
cannot be confirmed unless the plan provides that the class of unsecured
creditors receives value equal to the allowed amount of the claims in that
class. (17)

      E. RISKS.

            You should carefully consider the following risks, together with all
other information included in this Disclosure Statement. The realization of any
of the risks described below could have a material adverse effect on the
Debtor's ability to confirm the Plan. The principal risks are (1) the failure to
satisfy the conditions triggering Ameristar or the Debtor's obligations under
the Asset Purchase Agreement, and (2) the termination of the Asset Purchase
Agreement by either the Debtor or Ameristar.

            Article VI of the Asset Purchase Agreement sets forth the conditions
to Ameristar's and the Debtor's obligations to close the transaction and Article
VII of the Asset Purchase Agreement sets forth the provisions under which the
Debtor and/or Ameristar have the right to terminate the agreement. You are
encouraged to review these sections of the Asset Purchase Agreement.

            In addition, consummation of the Plan and Asset Purchase Agreement
will have significant tax consequences that may adversely affect the value of
distributions made to creditors under the Plan. See Exhibit "3" hereto for a
detailed discussion of the tax consequences of the Plan.

      F. EFFECTIVE DATE.

            The Plan shall not become binding until the Effective Date occurs.
The Effective Date is the first Business Day (a) that is at least ten days after
the Confirmation Date; (b) on which no stay of the Confirmation Order is in
effect; and (c) on which the Closing Date has occurred.

--------
(17)  These are complex statutory provisions. The preceding paragraph does not
purport to state or explain fully the applicable statutes or case law.

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V. CERTAIN TAX CONSEQUENCES OF THE PLAN

            The discussion of the federal income tax consequences of the
implementation of the Plan to the Debtor and holders of Claims and Interests is
contained in Exhibit "3" hereto.

VI. RECOMMENDATION AND CONCLUSION

            The Debtor believes that the Plan provides the greatest possible
recovery to holders of Claims and Interests, that acceptance of the Plan is in
the best interests of all parties, and that any alternative would result in a
significantly reduced recovery to holders of Claims and Interests, as well as
delay, uncertainty, and expense. ACCORDINGLY, THE DEBTOR URGES HOLDERS OF
IMPAIRED CLAIMS AND INTERESTS TO VOTE TO ACCEPT THE PLAN, BY SO INDICATING ON
THEIR BALLOTS, AND RETURNING THEM AS SPECIFIED IN THIS DISCLOSURE STATEMENT AND
ON THEIR BALLOTS.

PLAN PROPOSED BY:

WINDSOR WOODMONT BLACK HAWK
RESORT CORPORATION:

By: _______________________________________
    Michael Armstrong
    Chief Financial Officer

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