Fitzgeralds Gaming Corp., Exhibit 10.5



Table of Contents


EXHIBIT 10.5


GORDON & SILVER, LTD.

GERALD M. GORDON, ESQ.

Nevada Bar No. 229

WILLIAM M. NOALL, ESQ.

Nevada Bar No. 3549

THOMAS H. FELL, ESQ.

Nevada Bar No. 3717

3960 Howard Hughes Pkwy, 9th Fl.

Las Vegas, Nevada 89109

Telephone (702) 796-5555

Facsimile (702) 369-2666


Attorneys
 for Debtors


UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEVADA



	In re
	 
	 
	Case
 No. BK-N-00-33467-GWZ  Chapter 11

	 
	 
	 
	Joint
 Administration With:

	FITZGERALDS GAMING
	 
	 
	BK-N-00-33468
	 
	(Fitzgeralds South, Inc.)

	CORPORATION, a
 Nevada corporation,
	 
	 
	BK-N-00-33469
	 
	(Fitzgeralds Reno, Inc.)

	 
	 
	 
	BK-N-00-33470
	 
	(Fitzgeralds, Inc.)

	Debtor.
	 
	 
	BK-N-00-33471
	 
	(Fitzgeralds
 Las Vegas, Inc.)

	 
	 
	 
	BK-N-00-33472
	 
	(Fitzgeralds
 Mississippi, Inc.)

	o

 Affects this Debtor.
	/
	 
	BK-N-00-33473
	 
	(Fitzgeralds
 Black Hawk, Inc.)

	
	 
	 
	BK-N-00-33474
	 
	(Fitzgeralds
 Black Hawk II, Inc.)

	 
	 
	 
	BK-N-00-33475
	 
	(101 Main
 Street LLC)

	x

 Affects all Debtors.
	/
	 
	BK-N-00-33476
	 
	(Fitzgeralds
 Fremont Experience

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS SOUTH, INC.,
	 
	 
	 
	 
	 

	a Nevada corporation,
	/
	 
	DISCLOSURE
 STATEMENT TO

	
	 
	 
	ACCOMPANY
 DEBTORS FIRST AMENDED
	 
	 
	 
	PLAN
 OF REORGANIZATION

	o

 Affects FITZGERALDS RENO, INC.,
	 
	 
	 
	a Nevada corporation,
	/
	 
	 

	
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS INCORPORATED,
	 
	 
	 
	 
	 

	a Nevada corporation,
	/
	 
	 
	 
	 

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS LAS VEGAS, INC.,
	 
	 
	 
	 
	 

	a Nevada corporation,
	/
	 
	 
	 
	 

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS MISSISSIPPI, INC.,
	 
	 
	 
	 
	 

	a Mississippi corporation,
	/
	 
	 
	 
	 

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS BLACK HAWK,
	 
	 
	 
	 
	 

	INC., a Nevada corporation,
	/
	 
	 
	 
	 

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS BLACK HAWK II,
	 
	 
	Date:
 February 10, 2003

	INC., a
 Colorado corporation,
	/
	 
	Time:
 2:00 p.m.

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects 101 MAIN STREET LIMITED
	 
	 
	 
	 
	 

	LIABILITY
 COMPANY, a Colorado limited
	/
	 
	 
	 
	 

	liability company,
	 
	 
	 
	 
	 

	
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	o

 Affects FITZGERALDS FREMONT
	 
	 
	 
	 
	 

	EXPERIENCE
 CORPORATION,
	 
	 
	 
	 
	 

	a Nevada
 corporation,
	/
	 
	 
	 
	 

	
	 
	 
	 
	 
	 










TABLE OF CONTENTS




									
		A. Introduction
	I. INTRODUCTION
	II. INFORMATION REGARDING THE PLAN AND DISCLOSURE STATEMENT
	III. REPRESENTATIONS
	IV. GENERAL OVERVIEW OF THE PLAN
	V. SUMMARY OF VOTING PROCESS
		A. Who May Vote to Accept or Reject the Plan
		B. Summary of Voting Requirements
	VI. DESCRIPTION OF THE DEBTORS
		A. General Corporate Structure
			1. Fitzgeralds Gaming Corporation
			2. Fitzgeralds South, Inc
			3. Fitzgeralds Reno, Inc
			4. Fitzgeralds, Inc
			5. Fitzgeralds Las Vegas, Inc
			6. Fitzgeralds Mississippi, Inc
			7. Fitzgeralds Black Hawk, Inc
			8. Fitzgeralds Black Hawk II, Inc
			 9. 101 Main Street Limited Liability Company
			10. Fitzgeralds Fremont Experience Corporation
			11. Current Ownership of Subsidiary Equity Securities
		B. Description Of The Operating Properties
			1. Fitzgeralds Las Vegas
			2. Fitzgeralds Reno
			3. Fitzgeralds Tunica
			4. Fitzgeralds Black Hawk
	VII. OFFICERS AND DIRECTORS OF THE DEBTORS
		A. Philip D. Griffith
		B. Michael E. McPherson
		C. Max L. Page
		D. Patricia A. Becker
		E. Philip P. Hannifin
		F. Paul H. Manske
	VIII. EVENTS LEADING UP TO THE FILING OF THE BANKRUPTCY CASES
		A. Prepetition Default
		B. The Workout and Bankruptcy Filing
		C. Debtors’ Pre-Bankruptcy Operating Results
	IX. SIGNIFICANT EVENTS DURING THE REORGANIZED CASES
		A. First Day Motions
			1. General Ex Parte Applications
		B. Other Pleadings
			1. Assumption of Reno Parking Garage Ground Lease
			2. Assumption of Real Property Leases
	X. DETAILED DESCRIPTION OF THE PLAN
		A. Treatment of Unclassified Claims Under the Plan
			1. Treatment of Administrative Claims
			2. Treatment of Preserved Ordinary Course Administrative Claims
			3. Retention and Severance
			4. Cash Distribution Incentive
			5. Treatment of Priority Tax Claims
		B. Classification of Treatment of Claims and Equity Interests Under the Plan.
			1. Treatment of Class 1 (Priority Wage Claims)
			2. Treatment of Class 2 (Priority Benefit Plan Contribution Claims)
			3. Treatment of Class 3 (Priority Customer Deposit Claims)
			4. Treatment of Class 4 (Secured Tax Claims)
			5. Treatment of Class 5 (Miscellaneous Secured Claims)
			6. Treatment of Class 6 (Noteholders Secured Claims)
			7. Treatment of Class 7 (General Unsecured Claims)
			8. Treatment of Class 8 (Noteholder Deficiency Claims)
			9. Noteholder Deficiency Claims
			10. Treatment of Class 9 (Intercompany Claims)
			11. Treatment of Class 10 (Subsidiary Equity Securities)
			12. Treatment of Class 11 (Old FGC Preferred Stock)
			13. Treatment of Class 12 (FSI Warrant Claims)
			 14. Treatment of Class 13 (Old FGC Common Stock)
		C. Means of Implementation of the Plan
			1. Plan Implementation Steps Occurring on Effective Date
			2. Distribution of Plan Distribution Cash
			3. Notice of Effectiveness
			4. Surrender of Securities or Debt Instruments
			5. Ratification of Liquidation Trust
			6. No Corporate Action Required
			7. Informal Committee
			8. Duties of Indenture Trustee
			9. Executory Contracts and Unexpired Leases
			10. Indemnification Obligations
		D. Conditions to Confirmation of Plan
			1. Conditions To Confirmation
			2. Conditions To Effectiveness
			3. Waiver of Conditions
	XI. RISK FACTORS
	XII. POST EFFECTIVE DATE OPERATIONS AND PROJECTIONS
		A. Summary of Title to Property and Dischargeability
			1. Revesting of Assets
			2. Preservation of Litigation Claims
			3. Discharge
			4. Injunction
		B. Exculpation and Limitation of Liability
		C. Post Confirmation Reporting and Quarterly Fees to the United States Trustee
	XIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
		A. Introduction
		B. Tax Consequences To The Debtors
			1. Sale of Business Assets
			2. Cancellation of Debt
			3. Distribution of Liquidation Trust Shares
		C. Taxation of the Liquidation Trust
			1. General
			2. Holders of Liquidation Trust Shares
		D. Tax Consequences to Creditors
			1. General
			2. Receipt of Liquidating Trust Shares
			3. Treatment of Accrued Interest
			4. Character of Gain or Loss Recognized
			5. Long-term vs. Short-term Gains and Losses
			6. Withholding
		E. Tax Consequences To Holders Of FGC Equity Securities
			1. Old FGC Common Stock
			2. Old FGC Preferred Stock
			3. Subsidiary Equity Securities
			4. FSI Warrant Claims
	XIV. SECURITIES LAW CONSIDERATION
		A. Exemptions from Registration
			1. Securities Act of 1933, As Amended (the “1933 Act”)
			2. Securities Exchange Act of 1934, As Amended (the “1934 Act”)
			3. Trust Indenture Act of 1939, As Amended (the “TIA”)
			4. Investment Company Act of 1940, As Amended (the “1940 Act”)
		B. Restrictions on Transfer
	XV. GAMING REGULATION AND LICENSING
	XVI. CONFIRMATION OF THE PLAN
		A. Confirmation of the Plan
		B. Objections to Confirmation of the Plan
			1. Best Interest of Creditors and Liquidation Analysis
			2. Feasibility
			3. Accepting Impaired Class
			4. Acceptance of Plan
			5. Confirmation over Dissenting Class (“Cram Down”)
			6. Allowed Claims
			7. Impaired Claims and Equity Securities
			8. Voting Procedures
	XVII. ALTERNATIVE TO THE PLAN
		A. Alternative Plans of Reorganization
		B. Liquidation Under Chapter 7
		C. Preference and Other Avoidance Actions
	XVIII. RECOMMENDATION AND CONCLUSION
	EXHIBIT 10.2
	EXHIBIT 10.3
	EXHIBIT 10.4
	EXHIBIT 10.5








Table of Contents



	 

	 

	 


	
TABLE OF CONTENTS


	
 

	
 

	
Page


	I.

	
INTRODUCTION

	
1


	
II.

	

INFORMATION REGARDING THE PLAN AND DISCLOSURE STATEMENT

	
2


	
III.

	
REPRESENTATIONS

	
3


	
IV.

	
GENERAL OVERVIEW OF THE PLAN

	
3


	
V.

	
SUMMARY OF VOTING PROCESS

	
8


	
 

	

A.   Who May Vote to Accept or Reject the Plan



	
8


	
 

	

B.   Summary of Voting Requirements



	
9


	
VI.

	
DESCRIPTION OF THE DEBTORS

	
10


	
 

	
A.   General Corporate Structure



	
10


	
 

	
1.   Fitzgeralds Gaming Corporation



	
10


	
 

	
2.   Fitzgeralds South, Inc



	
11


	
 

	
3.   Fitzgeralds Reno, Inc



	
11


	
 

	
4.   Fitzgeralds, Inc



	
11


	
 

	
5.   Fitzgeralds Las Vegas, Inc



	
11


	
 

	
6.   Fitzgeralds Mississippi, Inc



	
11


	
 

	
7.   Fitzgeralds Black Hawk, Inc



	
11


	
 

	
8.   Fitzgeralds Black Hawk II, Inc



	
11


	
 

	
9.   
101Main Street Limited Liability Company



	
12


	
 

	
10.  
Fitzgeralds Fremont Experience Corporation



	
12


	
 

	
11.  
Current Ownership of Subsidiary Equity Securities



	
12


	
 

	
B.   
Description Of The Operating Properties



	
13


	
 

	
1.   Fitzgeralds Las Vegas



	
13


	
 

	
2.   Fitzgeralds Reno



	
14


	
 

	
3.   Fitzgeralds Tunica



	
19


	
 

	
4.   Fitzgeralds Black Hawk



	
19


	
VII.

	
OFFICERS AND DIRECTORS OF THE DEBTORS



	
20


	
 

	
A.   Philip D. Griffith



	
20


	
 

	
B.   Michael E. McPherson



	
20


	
 

	
C.   Max L. Page



	
20


	
 

	
D.   Patricia A. Becker



	
20


	
 

	
E.   Philip P. Hannifin



	
20


	
 

	
F.   Paul H. Manske



	
20


	
VIII.

	

EVENTS LEADING UP TO THE FILING OF THE BANKRUPTCY CASES



	
20


	
 

	
A.   Prepetition Default



	
20






i







Table of Contents



	
 

	
B.   The Workout and Bankruptcy Filing



	
22


	
 

	
C.   
Debtors' Pre-Bankruptcy Operating Results



	
24


	
IX.

	
SIGNIFICANT EVENTS DURING THE REORGANIZED CASES



	
25


	
 

	
A.   First Day Motions



	
25


	
 

	
1.   General Ex Parte Applications



	
25


	
 

	
B.   Other Pleadings



	
27


	
 

	
1.   
Assumption of Reno Parking Garage Ground Lease



	
27


	
 

	
2.   
Assumption of Real Property Leases



	
27


	
X.

	
DETAILED DESCRIPTION OF THE PLAN



	
28


	
 

	
A.   
Treatment of Unclassified Claims Under the Plan



	
28


	
 

	
1.   
Treatment of Administrative Claims



	
28


	
 

	
2.   
Treatment of Preserved Ordinary Course Administrative Claims



	
28


	
 

	
3.   Retention and Severance



	
28


	
 

	
4.   Cash Distribution Incentive



	
29


	
 

	
5.   Treatment of Priority Tax Claims



	
30


	
 

	
B.   
Classification of Treatment of Claims and Equity Interests Under the Plan



	
30


	
 

	
1.   
Treatment of Class 1 (Priority Wage Claims)



	
30


	
 

	
2.   
Treatment of Class 2 (Priority Benefit Plan Contribution Claims)



	
30


	
 

	
3.   
Treatment of Class 3 (Priority Customer Deposit Claims)



	
31


	
 

	
4.   
Treatment of Class 4 (Secured Tax Claims)



	
31


	
 

	
5.   
Treatment of Class 5 (Miscellaneous Secured Claims)



	
31


	
 

	
6.   
Treatment of Class 6 (Noteholders Secured Claims)



	
32


	
 

	
7.   
Treatment of Class 7 (General Unsecured Claims)



	
32


	
 

	
8.   
Treatment of Class 8 (Noteholder Deficiency Claims)



	
33


	
 

	
9.   Noteholder Deficiency Claims



	
33


	
 

	
10.   
Treatment of Class 9 (Intercompany Claims)



	
35


	
 

	
11.  Treatment of Class 10 (Subsidiary Equity Securities)



	
35


	
 

	
12.  Treatment of Class 11 (Old FGC Preferred Stock)



	
35


	
 

	
13.  Treatment of Class 12 (FSI Warrant Claims)



	
35


	
 

	
14.  Treatment of Class 13 (Old FGC Common Stock)



	
36


	
 

	
C.   
Means of Implementation of the Plan



	
36


	
 

	
1.   
Plan Implementation Steps Occurring on Effective Date.



	
36


	
 

	
2.   
Distribution of Plan Distribution Cash



	
38


	
 

	
3.   Notice of Effectiveness



	
38


	
 

	
4.   
Surrender of Securities or Debt Instruments



	
38


	
 

	
5.   Ratification of Liquidation Trust



	
39


	
 

	
6.   No Corporate Action Required



	
39


	
 

	
7.   Informal Committee



	
39


	
 

	
8.   Duties of Indenture Trustee



	
40


	
 

	
9.   
Executory Contracts and Unexpired Leases



	
40


	
 

	
10.  Indemnification Obligations



	
42


	
 

	
D.   
Conditions to Confirmation of Plan



	
42


	
 

	
1.   Conditions To Confirmation



	
42


	
 

	
2.   Conditions To Effectiveness



	
43


	
 

	
3.   Waiver of Conditions



	
44






ii







Table of Contents



	
XI.

	
RISK FACTORS



	
44


	
XII. 

	
POST EFFECTIVE DATE OPERATIONS AND PROJECTIONS



	
45


	
 

	
A.   
Summary of Title to Property and Dischargeability



	
45


	
 

	
1.   Revesting of Assets



	
45


	
 

	
2.   Preservation of Litigation Claims



	
45


	
 

	
3.   Discharge



	
45


	
 

	
4.   Injunction



	
46


	
 

	
B.   
Exculpation and Limitation of Liability



	
46


	
 

	
C.   
Post Confirmation Reporting and Quarterly fees to the United States Trustee



	
47


	
XIII. 

	
CERTAIN FEDERAL INCOME TAX CONSEQUENCES



	
48


	
 

	




A.   Introduction



	
48


	
 

	
B.   Tax Consequences To The Debtors



	
49


	
 

	
1.   Sale of Business Assets



	
49


	
 

	
2.   Cancellation of Debt



	
51


	
 

	
3.   
Distribution of Liquidation Trust Shares



	
52


	
 

	
C.   
Taxation of the Liquidation Trust



	
53


	
 

	
1.   General.



	
53


	
 

	
2.   
Holders of Liquidation Trust Shares.



	
53


	
 

	
D.   Tax Consequences to Creditors



	
54


	
 

	
1.   General.



	
54


	
 

	
2.   
Receipt of Liquidating Trust Shares.



	
54


	
 

	
3.   Treatment of Accrued Interest.



	
54


	
 

	
4.   
Character of Gain or Loss Recognized.



	
55


	
 

	
5.   
Long-term vs. Short-term Gains and Losses



	
56


	
 

	
6.   Withholding



	
56


	
 

	
E.   
TAX CONSEQUENCES TO HOLDERS OF FGC EQUITY SECURITIES



	
56


	
 

	
1.   Old FGC Common Stock



	
56


	
 

	
2.   Old FGC Preferred Stock



	
56


	
 

	
3.   Subsidiary Equity Securities



	
57


	
 

	
4.   FSI Warrant Claims



	
57


	
XIV. 

	
SECURITIES LAW CONSIDERATION



	
57


	
 

	
A.   Exemptions from Registration



	
57


	
 

	
1.   
Securities Act of 1933, As Amended (the “1933 Act”)



	
57


	
 

	
2.   
Securities Exchange Act of 1934, As Amended (the “1934 Act”)



	
58


	
 

	
3.   
Trust Indenture Act of 1939, As Amended (the “TIA”)



	
59


	
 

	
4.   
Investment Company Act of 1940, as amended (the “1940 Act”)



	
59


	
 

	
B.   Restrictions on Transfer



	
59


	
XV. 

	
GAMING REGULATION AND LICENSING



	
63


	
 

	
1.   Nevada Gaming Regulation



	
63


	
XVI. 

	
CONFIRMATION OF THE PLAN



	
71


	
 

	
A.   Confirmation of the Plan



	
71


	
 

	
B.   
Objections to Confirmation of the Plan



	
71






iii







Table of Contents



	
 

	
1.   
Best Interest of Creditors and Liquidation Analysis



	
72


	
 

	
2.   Feasibility



	
75


	
 

	
3.   Accepting Impaired Class



	
75


	
 

	
4.   Acceptance of Plan



	
75


	
 

	
5.   
Confirmation over Dissenting Class (“Cram Down”)



	
76


	
 

	
6.   Allowed Claims



	
76


	
 

	
7.   
Impaired Claims and Equity Securities



	
77


	
 

	
8.   Voting Procedures



	
77


	
XVII. 

	
 ALTERNATIVE TO THE PLAN



	
78


	
 

	
A.   
Alternative Plans of Reorganization



	
79


	
 

	
B.   Liquidation Under Chapter 7



	
79


	
 

	
C.   
Preference and Other Avoidance Actions



	
80


	
XVIII.

	
RECOMMENDATION AND CONCLUSION



	
82






iv







Table of Contents


APPENDIX




	EXHIBIT “A”

	 	FIRST AMENDED PLAN OF REORGANIZATION


	
EXHIBIT “B”

	 

	
LIQUIDATION ANALYSIS


	EXHIBIT “C”

	 

	
RESTRUCTURING AGREEMENT


	EXHIBIT “D”

	 

	
LIQUIDATING TRUST AGREEMENT






v







Table of Contents







	I.

	 

	
INTRODUCTION




     
On
December 5, 2000 (the“Petition Date”), Fitzgeralds Gaming Corporation,
a Nevada corporation (“FGC”), Fitzgeralds South, Inc., a Nevada corporation
(“FSI”), Fitzgeralds Reno, Inc., a Nevada corporation (“FRI”), Fitzgeralds
Incorporated, a Nevada corporation (“FI”), Fitzgeralds Las Vegas, Inc., a
Nevada corporation (“FLVI”), Fitzgeralds Mississippi, Inc., a Mississippi
corporation (“FMI”), Fitzgeralds Black Hawk, Inc., a Nevada corporation
(“FBHI”), Fitzgeralds Black Hawk II, Inc., a Colorado corporation (“FBHII”),
101 Main Street Limited Liability Company, a Colorado limited liability company
(“101Main”) and Fitzgeralds Fremont Experience Corporation, a Nevada
corporation (“FFEC” and together with FGC, FSI, FRI, FI, FLVI, FMI, FBHI, FBHII
and 101Main, the “Debtors”), filed petitions for relief (the “Petitions”) under
Title 11, Chapter 11 of the United States Code (the “Bankruptcy Code”).
Concurrent with the filing of the Petitions, the Debtors jointly filed a Motion
for Joint Administration, which was granted by order entered on December 5,
2000.


     
The Debtors have prepared
 this Disclosure Statement (“Disclosure
Statement”) in connection with the solicitation of votes on the First Amended
Plan of Reorganization (‘the “Plan”) dated December 5, 2002, proposed by the
Debtors to treat the Claims of Creditors of Debtors and the Persons holding
Equity Securities in Debtors. Capitalized terms not otherwise defined herein
will have the same meanings as are ascribed to such terms in the Plan.


     
The various exhibits to
 this Disclosure Statement included
in the Appendix are incorporated into and are a part of this Disclosure Statement. The Plan is
included as Exhibit “A” in the Appendix. Any interested party desiring further
information should contact:



	 
	Gordon & Silver, Ltd.

3960 Howard Hughes Parkway, 9th Floor

Las Vegas, Nevada 89109

Telephone Number: (702) 796-5555

Facsimile Number: (702) 369-2666

Attn: Thomas H. Fell, Esq





1







Table of Contents


     
Interested parties may also obtain further
information from the United States Bankruptcy Court for the District of Nevada at its website:
http://www.nvb.uscourts.gov.







	II.

	 

	INFORMATION REGARDING THE PLAN AND DISCLOSURE STATEMENT




     
The objective of
 a Chapter 11 case is the
confirmation (i.e., approval by the bankruptcy court) of a plan of reorganization. A plan describes in detail
(and in language appropriate for a legal contract) the means for satisfying the
claims against, and equity interests in, a debtor. After a plan has been
filed, the holders of such claims and equity securities that are impaired (as
defined in Bankruptcy Code Section 1124) are permitted to vote to accept or
reject the plan. Before a debtor or other plan proponent can solicit
acceptances of a plan, Bankruptcy Code Section 1125 requires the debtor or
other plan proponent to prepare a disclosure statement containing adequate
information of a kind, and in sufficient detail, to enable those parties
entitled to vote on the plan to make an informed judgment about the plan and
whether they should accept or reject the plan.


     
The purpose of this Disclosure Statement is to provide sufficient
information about the Debtors and the Plan to enable Creditors and holders of
Equity Securities to make an informed decision in exercising their rights to
accept or reject the Plan. This Disclosure Statement will be used to solicit
acceptances of the Plan only after the Bankruptcy Court has found that this
Disclosure Statement provides adequate information in accordance with
Bankruptcy Code Section 1125 and has entered an order approving this Disclosure
Statement. Approval by the Bankruptcy Court is not an opinion or ruling on the
merits of this Disclosure Statement and it does not mean that the Plan itself
has been or will be approved by the Bankruptcy Court.



     After this Disclosure Statement has been approved by
the Bankruptcy Court and the appropriate Persons have voted on whether to accept or reject the Plan,
there will be a hearing on the Plan to determine whether it should be
confirmed. At the Confirmation Hearing, the

2







Table of Contents




Bankruptcy Court will consider whether the Plan satisfies the various requirements
of the Bankruptcy Code. The Bankruptcy Court will also receive and consider a
Ballot summary which will present a tally of the votes of Classes accepting or
rejecting the Plan cast by those entitled to vote. Once confirmed, the Plan
will be treated essentially as a contract binding on all Creditors, holders of
Equity Securities and other parties-in-interest in the Chapter 11 Cases.



     THIS DISCLOSURE STATEMENT IS NOT THE PLAN. FOR THE
CONVENIENCE OF CREDITORS AND HOLDERS OF EQUITY SECURITIES, THE PLAN IS SUMMARIZED IN THIS
DISCLOSURE STATEMENT. ALL SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE
PLAN ITSELF. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THIS DISCLOSURE
STATEMENT AND THE PLAN, THE PLAN WILL CONTROL.







	III.

	 

	REPRESENTATIONS




     
Unless otherwise specifically noted, the financial
information in this Disclosure Statement has not been subject to audit. Instead, this Disclosure
Statement was prepared from information compiled from records maintained in the
ordinary course of the Debtors’ businesses. The Debtors have attempted to be
accurate in the preparation of this Disclosure Statement.



     Other than as stated in this Disclosure Statement,
the Debtors have not authorized any representations or assurances concerning the Debtors and their
operations or the value of their respective assets. Therefore, in deciding
whether to accept or reject the Plan, you should not rely on any information
relating to the Debtors or the Plan other than that contained in this
Disclosure Statement or in the Plan itself.







	IV.

	 

	GENERAL OVERVIEW OF THE PLAN




     
The following is a general overview of the provisions
of the Plan. This overview is qualified in its entirety by reference to the provisions of the
Plan. For a more detailed description of the terms and provisions of the Plan,
see Article X hereof and the Plan. Pursuant to Section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims, Preserved Ordinary Course
Administrative Claims, Allowed Priority Tax Claims and Allowed Executive
Incentive Claims


3







Table of Contents


are not designated as Classes. The holders of such
unclassified Claims shall be paid in full under the Plan consistent with the requirements of Section 1129(a)(9)(A) of the
Bankruptcy Code and are not entitled to vote on the Plan. The distributions
under the Plan to each Class are summarized in the following table:



	 	 	 	 	 	 	 	 	 
	Class

	 

	
Description

	 

	Treatment

	 

	Estimated amount of
Claim


	
	 

	
	 

	
	 

	


	Class 1:

	 

	
Priority Wage Claims

	 

	Unimpaired. Paid in
full in Cash.

	 

	$

	0

	 


	 


	Class 2:

	 

	
Priority Benefit

Plan Contribution

Claims

	 

	Unimpaired. Paid in
full in Cash.

	 

	$

	0

	 


	 


	Class 3:

	 

	
Priority Customer

Deposit

Claims

	 

	Unimpaired. Paid in
full in Cash

	 

	$

	0

	 


	 


	Class 4:

	 

	
Secured Tax Claims

	 

	Unimpaired. Cured
or paid in full in
Cash. See X.B.5.

	 

	$

	0

	 


	 


	Class 5:

	 

	
Miscellaneous

Secured Claims

	 

	Unimpaired. Cured
or paid in full in
Cash. See X.B.5.

	 

	$

	0

	 


	 


	Class 6:

	 

	
Noteholder Secured

Claims

	 

	Impaired. Pro rata
share of the
proceeds of their
collateral.

	 

	$

	123,025,000.00

	 


	 


	Class 7:

	 

	
General Unsecured

Claims

	 

	Unimpaired. Paid in
full in Cash.

	 

	 

	Extimated
not to exceed


	 

	 

	 

	 

	 

	 

	$

	4,000,000.00

	 


	 


	Class 8:

	 

	
Noteholder

Deficiency Claims

	 

	Impaired. Pro rata
share of the shares
of the Liquidation
Trust.

	 

	$

	138,210,000.00

	 


	 


	Class 9:

	 

	
Intercompany Claims

	 

	Impaired. No
distribution.

	 

	$

	242,712,320.00

	 


	 


	Class 10:

	 

	
Subsidiary Equity

Securities

	 

	Impaired.
No Distribution.

	 

	$

	0

	 


	 


	Class 11:

	 

	
Old FGC Preferred

Stock

	 

	Impaired. No
distribution.

	 

	$

	0

	 


	 


	Class 12:

	 

	
FSI Warrant Claims

	 

	Impaired.
No distribution.

	 

	$

	0

	 


	 


	Class 13:

	 

	
Old FGC Common Stock

	 

	Impaired.
No distribution.

	 

	$

	0

	 






     As fully set forth
 in Section VIII below, in 1999,
the Debtors entered into negotiations with
 an informal committee (the “Informal Committee”)
comprised of beneficial owners of over


4







Table of Contents


two-thirds principal amount of the
12.25% Senior Secured Notes due 2004 issued by FGC (the “Notes,” and such owners of the
 Notes, together with
any of the transferees or their assignees, the “Consenting Noteholders”). The Debtors and
the Informal Committee reached an agreement concerning the sale of Debtors’
assets, including going concern sales of its three hotel/casinos, Fitzgeralds
Las Vegas Hotel and Casino (“Fitzgeralds Las Vegas”), Fitzgeralds Reno Hotel
and Casino (“Fitzgeralds Reno”) and Fitzgeralds Tunica Hotel and Casino
(“Fitzgeralds Tunica”), and one casino, Fitzgeralds Black Hawk Casino
(“Fitzgeralds Black Hawk,” and together with Fitzgeralds Las Vegas, Fitzgeralds
Reno and Fitzgerald Tunica, the “Operating Companies”) operated by certain of
the Debtors, substantially all of which are collateral for the Notes. The
terms of such agreement are embodied in that certain Agreement Regarding
Pre-Negotiated Restructuring and documents referred to and incorporated
therein, dated December 1, 2000 (as amended from time to time, the“Restructuring
 Agreement”), among the Debtors, Senior Management1 and the
Consenting Noteholders. A copy of the Restructuring Agreement is included as
Exhibit “C” in the Appendix.


     
The primary objective of the restructuring is to maximize
returns to Creditors including the value of Noteholders’ recoveries inasmuch as the
obligations owed by the Debtors to the Noteholders constitutes in excess of
ninety (90) percent of the Debtors’ liabilities, and it is the Debtors’ desire
to obtain this objective through an expeditious and orderly sale of the
Operating Companies as going concerns by asset and/or stock sales and the
distribution of the net proceeds therefrom. The Debtors have filed the Plan in
order to conclude the Chapter 11 Cases and effectuate the remaining terms of
the Restructuring Agreement.



     The Restructuring Agreement requires the closing of the
sales of the Operating Companies prior
 to the consummation of the Plan. In order to achieve this
objective, on the






	1 Senior Management is defined collectively
 as Philip D. Griffith, Michael E.
McPherson, Paul H. Manske and Max L. Page.




5







Table of Contents


Petition Date, the Debtors filed a Motion for Order Approving Procedures
for Sale of Assets Free and Clear of Liens, Claims and Interest and Assumption
and Assignment of Certain Executory Contracts and Unexpired Leases (the“Protocol
 Motion”) regarding the proposed sales of the assets of the Operating
Companies. The Protocol Motion requested (a) authority to sell the Operating
Companies free and clear of Liens pursuant to Section 363 of the Bankruptcy
Code; and (b) that procedures be established by which such sales and
assignments are documented, advertised and brought before the Court for
approval. By establishing these procedures in advance of any motion to approve
such sales and assignments, uncertainty respecting the sales’ process is
diminished, and the sales’ process has been expedited and costs significantly
reduced. The motion was heard on December 21, 2000, and an order granting the
Protocol Motion was entered December 21, 2000 (the “Protocol Order”).



     On the Petition Date, the Debtors filed a Motion for
Order Approving (i) The Sale of Assets Free and Clear of Liens, Claims and Interests Pursuant to
Bankruptcy Code Section 363(f); and (ii) Assumption and Assignment of Certain
Executory Contracts and Unexpired Leases Pursuant to Section 365 of the
Bankruptcy Code (the “363 Motion”) regarding the proposed sale of substantially
all of the assets of Fitzgeralds Las Vegas, Fitzgeralds Tunica and Fitzgeralds
Black Hawk, and the transfer of FFEC’s membership interest in The Fremont
Street Experience Limited Liability Company to Majestic Investor, LLC
(“Majestic Investor”). The 363 Motion (as amended) was approved on March 19,
2001. The Purchase and Sale Agreement is dated as of November 22, 2000 (as
amended) and is by and between Majestic Investor, as purchaser, FLVI, 101Main,
FMI, and FFEC, as sellers, and FGC, as parent, (the “Purchase Agreement”)2.
The closing took place on December 6, 2001. The Debtors are actively seeking a






	2 On
 October 5, 2001, the Debtors filed a Motion to Approve Assignment,
Assumption and Consent Agreement wherein a wholly-owned subsidiary of Majestic
Investor, LLC was assigned the Purchase Agreement. An order approving the
motion was entered on November 1, 2001.




6







Table of Contents



purchaser for the assets of Fitzgeralds Reno. There is no deadline to conclude
such a sale, but as discussed below this final sale is a condition to the
Effective Date of the Plan.


     
Section 4.3 of the Restructuring Agreement,
Distribution of Sale Proceeds, provides that upon the sale of assets or stock of a given Operating Company, a
portion of the proceeds would be reserved for Tail Liabilities in an amount
determined by Debtors and the Informal Committee. Pursuant to the Court’s
Stipulation and Order Re: Amount of Net Sale Proceeds from Sale of Assets to
Majestic Investor Holdings, LLC Reserved for Amounts Due in Connection with the
Senior Management Incentive Program and Amount of “Reasonable Reserve” for Tail
Liabilities, docketed on December 14, 2001, an additional eight million five
hundred thousand dollars ($8,500,000.00) was added to cash reserves already
retained by Debtors. Pursuant to the Amended and Restated Restructuring
Agreement, therefore, Debtor reserved sixteen million five hundred thousand
dollars ($16,500,000.00) for payment of ongoing operational costs and cash
sufficient to fund Tail Liabilities.



     The claims of the Noteholders are bifurcated into
two classes, Class 6 representing the Noteholder Secured Claims, and Class 8 representing the
Noteholder Deficiency Claims. In accordance with the Restructuring Agreement
and as provided for in the Protocol Order as well as the 363 Motion Order, the
Indenture Trustee is to receive on behalf of the Noteholders the proceeds from
the sale of the Collateral for the Notes. As such, regarding the Noteholder
Secured Claims, each Noteholder shall receive in consideration for the Allowed
Secured Claim portion of their Allowed Claim, the balance of the proceeds of
Collateral for the Notes to the extent that such proceeds are not distributed
to the Indenture Trustee prior to the Effective Date of the Plan. Such
proceeds shall be distributed to the Indenture Trustee for the benefit of and
distribution to the Noteholders in accordance with the Indenture. The Allowed
Noteholder Deficiency Claims shall be satisfied by the distribution to the
Indenture Trustee on the


7







Table of Contents


Distribution Date
 its proportionate share of the Liquidation Trust Shares to be
distributed to the Noteholders. The Liquidation Trust shall be created on the
Effective Date of the Plan for the purpose of holding, liquidating and
distributing the assets of the Liquidation Trust pursuant to the Liquidation
Trust Agreement with no objective to engage in the conduct of a trade of
business. The name of the Liquidation Trust shall be the “Fitzgeralds Gaming
Corporation Liquidation Trust.” All the Residual Assets3 shall be transferred
to the Liquidation Trust and the Tail Liabilities4 assumed by the Liquidation Trust.


     
General Unsecured Claims are provided for in Class 7.
Holders of Class 7 Claims are unimpaired. Each holder of an Allowed General Unsecured Claim shall
receive Plan Distribution Cash equivalent to its Allowed General Unsecured
Claim plus interest at the Federal Judgment Rate from the Petition Date until
paid.


     All Priority Wage Claims, Priority
Contribution Claims, Priority Benefit Plan Contribution Claims, Priority Customer Deposit, Secured Tax Claims, and
Miscellaneous Secured Claims, are unimpaired pursuant to the Plan and shall be
paid in full in cash. Intercompany Claims shall receive no distribution, and
all Equity Securities will be cancelled and terminated.







	V.

	 

	SUMMARY OF VOTING PROCESS









	 

	A.

	 

	Who May Vote to Accept or Reject the Plan.




     
Generally, holders of allowed claims or equity interests
that are “impaired” under a plan are permitted to vote on the plan. A claim is defined
by the Bankruptcy Code and the Plan to include a right to payment from a
debtor; an equity security represents an ownership stake in a






	
3 Residual Assets is defined in the Restructuring Agreement as all tangible and
intangible assets belonging to the Debtors and to the Liquidation Trust which,
as of the Liquidation Date (as defined therein) are not a Purchase Note,
Nevada Purchase Note, or operating assets (or stock) of any Operating Company
that has not been sold.


	4 Tail Liabilities is defined in the Plan as any and all pre-Effective Date
Allowed Claims (excluding the Notes) and Allowed Unclassified Claims of any of
the Debtors not assumed in connection with the purchase of the assets or the
stock of the Operating Companies.




8







Table of Contents


debtor. In order
to vote, a creditor must first have an allowed claim. The solicitation of
votes on the Plan will be sought only from those holders of Allowed Claims whose
Claims are impaired and which will receive property or rights under the Plan.
As explained more fully below, to be entitled to vote, a Claim must be both“
Allowed” and “Impaired.”







	B.

	 

	Summary of Voting Requirements.




     
In order for the Plan to be confirmed, the Plan must be
accepted by at least one non-insider, impaired Class of Claims. A class of claims is deemed to have
accepted a plan when allowed votes representing at least two-thirds (2/3) in amount and a
majority in number of the claims of the class actually voting cast votes in
favor of a plan. A class of equity securities has accepted a plan when votes
representing at least two-thirds (2/3) in amount of the outstanding equity
securities of the class actually voting cast votes in favor of a plan. The
Debtors are soliciting votes from holders of Allowed Claims in the following
Classes which are impaired under the Plan:



	 	 	 
	Class

	 

	
Description


	
	 

	




	Class 6

	 

	
Noteholder Secured Claims


	Class 8

	 

	
Noteholder Deficiency Claims





     
The Debtors will have the right to supplement this
Disclosure Statement as to additional impaired Classes, if any. The treatment of each Class is
described in the Plan and is summarized generally in Articles IV and X of this
Disclosure Statement.


     
A VOTE FOR ACCEPTANCE OF THE PLAN BY THOSE HOLDERS OF
CLAIMS WHO ARE ENTITLED TO VOTE IS MOST IMPORTANT. THE DEBTORS ASSERT THAT THE TREATMENT OF
CREDITORS UNDER THE PLAN IS THE BEST ALTERNATIVE FOR CREDITORS AND THE DEBTORS
RECOMMEND THAT THE HOLDERS OF ALLOWED CLAIMS VOTE IN FAVOR OF THE PLAN.


9







Table of Contents







	VI.

	 

	DESCRIPTION OF THE DEBTORS









	 

	A.

	 

	General Corporate Structure.







     
          1. Fitzgeralds
Gaming Corporation. FGC is a diversified multi-jurisdictional gaming holding company that until December 6, 2001 owned
and operated three Fitzgeralds-brand casino-hotels, namely: Fitzgeralds Las
Vegas in downtown Las Vegas, Nevada, Fitzgeralds Reno in Reno, Nevada and
Fitzgeralds Tunica in Tunica, Mississippi; and one casino: Fitzgeralds Black
Hawk in Black Hawk, Colorado. On December 6, 2001, the Company sold
substantially all of the assets and related liabilities of its Fitzgeralds Las
Vegas, Fitzgeralds Tunica and Fitzgeralds Black Hawk properties to Majestic
Investor. As of December 31, 2001, the Company operated only its Fitzgeralds
Reno property, which has a total of 868 slot machines, 25 table games and
approximately 351 hotel rooms. FGC currently conducts substantially all of its
business through wholly-owned subsidiaries: FRI, FSI and FI. FRI directly
owns and operates Fitzgeralds Reno; FSI owns the residual assets and
liabilities of Fitzgeralds Las Vegas and Fitzgeralds Tunica through
wholly-owned subsidiaries; and FI owns the residual assets and liabilities of
Fitzgeralds Black Hawk through wholly-owned subsidiaries, including 101Main.
FGC, a Nevada corporation, was formed on November 10, 1994. Directly and
through several intermediate corporations, FGC owns one hundred percent (100%)
of the other Debtors. Prior to FGC’s formation, two of the casino-hotels,
Fitzgeralds Reno and Fitzgeralds Las Vegas, which began operations in 1985 and
1987, respectively, were separate and independently owned and controlled by
Jerome H. Turk (“Turk”) and Philip D. Griffith (“Griffith”).


     
Subsequent to FGC’s formation, between
December 1994 and February 1995, a business combination was effected, resulting in the existing single ownership
structure for the companies operating Fitzgeralds-brand casinos.


10







Table of Contents





     
          2.
Fitzgeralds South, Inc. FSI, a Nevada corporation, was formed on
December 3, 1993. It is the parent of FLVI and FMI, which two entities
wholly-owned and operated Fitzgeralds Las Vegas and Fitzgeralds Tunica,
respectively. FSI is a wholly-owned subsidiary of FGC. FSI, formally known as
Fitzgeralds Gaming Corporation (the “Old FGC”), was a different entity from
FSI’s current parent company. The Old FGC was wholly-owned by Turk and
Griffith, who later changed the corporation’s name to FSI.





     
          
3. Fitzgeralds Reno, Inc. FRI, a Nevada corporation, was formed on
October 23, 1984 and is a wholly-owned subsidiary of FGC. It owns the
Fitzgeralds Reno hotel/casino in Reno, Nevada.





     
          
4. Fitzgeralds, Inc. FI, a Nevada corporation, was formed on December 17,
1992 and is a wholly-owned subsidiary of FGC. It is the successor entity to
Griffith Gaming, Inc. FI holds one hundred percent (100%) of the equity
interests in FBHI and eighty-five percent (85%) of the equity interests in
Fitzgeralds Arizona Management, Inc.





     
          
5. Fitzgeralds Las Vegas, Inc. FLVI, a Nevada corporation, was formed on
December 6, 1990. It is a wholly-owned subsidiary of FSI.





     
          
6. Fitzgeralds Mississippi, Inc. FMI, a Mississippi corporation, formerly
known as Polk Landing Entertainment Corporation (“PLEC”), was formed in April
1993. PLEC became FMI after FSI acquired a one hundred percent (100%) interest
in PLEC.





     
          
7. Fitzgeralds Black Hawk, Inc. FBHI, a Nevada corporation, was formed on
March 3, 1994, and is a wholly-owned subsidiary of FI. It, in turn, is a one
hundred percent (100%) equity interest holder in FBHII, a Colorado corporation.





     
          
8. Fitzgeralds Black Hawk II, Inc. FBHII, a Colorado corporation, was
formed on July 31, 1997, by FBHI for the purpose of acquiring an interest in
101Main. The corporation is the parent company of 101Main, a Colorado limited
liability company.

11







Table of Contents





     
          
 9. 101 Main Street Limited Liability Company. 101Main, a Colorado limited
liability company, was formed on March 12, 1993 and is a wholly-owned
subsidiary of FBHII.





     
          
10. Fitzgeralds Fremont Experience Corporation. FFEC, a Nevada
corporation, was formed on July 8, 1993 and is a wholly-owned subsidiary of
FLVI.





     
          
11. Current Ownership of Subsidiary Equity Securities. The following
chart illustrates the flow of Subsidiary Equity Securities up to FGC:


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


/ / /


12







Table of Contents




	*

	Entities that are debtors in the above-captioned
 Chapter 11 cases


	**

	Other shareholders: Michael Luzich (11.25%);
 Martin Cohen (3.75%)










	 

	B.

	 

	Description Of The Operating Properties.







     
          
1. Fitzgeralds Las Vegas. Fitzgeralds Las Vegas is located on the city
block bounded by Fremont, Carson, Third and Fourth Streets at the Fremont
Street Experience in downtown Las Vegas. The 34-story building recently
underwent an approximately $18.0 million

13







Table of Contents


refurbishment of the hotel and remodeling and expansion of the casino
which was substantially completed in December 1996. The facility now contains
a 638-room hotel (including 14 suites) and a casino currently offering 1,108
slot machines, 27 table games, a 48-seat keno lounge and a sports book
(operated by a third party). Fitzgeralds Las Vegas’ amenities include four
restaurants, three bars, an ice cream parlor, a special events center, a gift
shop and an entertainment area. Also part of Fitzgeralds Las Vegas is a
323-space parking structure and an adjacent surface parking area with an
additional 76 spaces.


     
In September 1995, Fitzgeralds Las Vegas entered into a
13-year franchise license agreement with Holiday Hospitality Franchising, Inc. (“Holiday Inn”) to
operate Fitzgeralds Las Vegas as a Holiday Inn commencing in July 1996.
Subject to the terms and conditions of the agreement, Fitzgeralds Las Vegas was
included in the Holiday Inn Worldwide Reservation System and had use of Holiday
Inn copyrights, trademarks and similar proprietary rights used by other Holiday
Inn licensees. Fitzgeralds Las Vegas was the exclusive licensee of Holiday
Inn-branded hotels within the defined territory encompassing downtown Las
Vegas. Fitzgeralds Las Vegas paid a monthly royalty based on a percentage of
Fitzgeralds Las Vegas’ revenues from room rentals after deduction of sales and
room taxes and a portion of complimentary rooms. Fitzgeralds Las Vegas also
paid marketing reservations and similar fees based on such revenues or the
number of guestrooms. The franchise license agreement was not assumed and
assigned as part of the sale to Majestic Investor. As such, it is anticipated
that Holiday Inn will file a General Unsecured Claim in the approximate amount
of $1,650,000.00, which claim Debtors will dispute.





          
     
2. Fitzgeralds Reno. Fitzgeralds Reno is located in downtown Reno on the
corner of Virginia Street and Commercial Row next to the landmark Reno Arch.
Fitzgeralds Reno consists of a 16-story 351-room hotel and a casino currently
offering 868 slot machines, 25 table games, an 89-seat keno lounge and a sports
book (operated by a third party). Amenities include


14







Table of Contents



three restaurants, four bars, an entertainment lounge, and a gift shop. During
the period from 1998-2001, the Company renovated portions of Fitzgeralds Reno
at a cost of approximately One Hundred Eight Million Dollars ($108,000,000.00).
Historically, Fitzgeralds Reno leased parking spaces in an adjacent 834-space
parking garage on an annual basis with no certainty that the lease would be
renewed from year to year. Since available parking in downtown Reno is
limited, losing access to these spaces would substantially impair the
performance of Fitzgeralds Reno unless an alternative site became available.
Therefore, on February 1, 2000, Fitzgeralds Reno acquired ownership of the
garage for Three Million Dollars ($3,000,000.00) as well as an assignment of
the underlying ground lease on which the garage is located. The original term
of the ground lease expires on February 28, 2013, and may be extended for one
additional period of ten years.


     
In October 1998, the Reno City Council approved a
special assessment district to finance a portion of the costs to lower the railroad tracks that
run through downtown Reno, Nevada (the “ReTRAC Project”). Plans for the ReTRAC
Project provide for the construction of a temporary rail bypass that will be
used to divert rail traffic around the main railroad during construction. The
City of Reno (the “City”) estimates that a period of more than three years will
be required to complete the ReTRAC Project. The southern boundary of the
bypass will extend out into the middle of Commercial Row, the street where
Fitzgeralds Reno hotel entrance, valet parking area and hotel loading zone are
situated.


     
Based on plans prepared by the City, Fitzgeralds Reno would
expect to lose permanently approximately 3,802 square feet of land and temporarily 22,979
square feet of land through eminent domain, several parking spaces, the current
valet parking area, an outdoor billboard structure advertising available rooms
and a building used to house administrative offices, and would during
construction of the ReTRAC Project experience up to a 70 percent reduction in
ingress and egress for the hotel entrance currently on Commercial Row. The
City has also


15







Table of Contents


 indicated that the ReTRAC Project might require the demolition of the
Fitzgeralds Reno Rainbow Skyway if the structure cannot be preserved by
underpinnings during construction of the ReTRAC Project. Implementation of the
ReTRAC Project under these circumstances would cause the Company to suffer
significant and permanent loss in business revenue and income; certain
operating inefficiencies from demolished or impaired physical structures; and a
portion of its existing customer base as a result of the construction and
operation of the proposed rail bypass.


     
On November 30, 1998, the Company filed a lawsuit
against the City to challenge the method by which the special assessment to be levied against the
Company was determined. The City of Reno filed an answer to the Company’s
lawsuit on January 19, 1999. Subsequent thereto, George Kradanis and Robert
Maloff d/b/a Sundowner Hotel and Casino (the “Sundowner”) were permitted by
court order to file a complaint in intervention. Notwithstanding that
intervention, on December 22, 1999, the Court granted the City’s Motion for
Summary Judgment against the Sundowner, which motion was joined in by
Fitzgeralds Reno’s. After hearing oral arguments and considering the parties’
briefs, the Nevada District Court concluded that there was insufficient
evidence before the Reno City Council to support a finding that the ReTRAC
Project confers a special benefit on Fitzgeralds Reno as is required by statute
before a special assessment may be imposed. The Nevada District Court remanded
the matter to the Reno City Council and directed the Council to conduct a new
hearing to consider evidence as to whether Fitzgeralds Reno would receive a
special benefit from the proposed project.


     
On June 20, 2001, the Reno City Council commenced a
public hearing in compliance with the remand order of the Court. That public hearing was
recessed and continued to November 29, 2001. After resuming the hearing on
November 29, 2001, the Reno City Council again recessed and continued the
proceedings to January 4, 2002, at which time the hearing was


16







Table of Contents


completed
 and the matter was submitted for decision of the Reno City Council. On
February 19, 2002, the Reno City Council voted on the matter. By a 4-3
decision, the Reno City Council concluded that the ReTRAC Project would confer
a special benefit on Fitzgeralds Reno. On a 5-2 decision, however, the Reno
City Council determined that the value of the special benefit in light of the
evidence presented was $1.00. The decisions of the Reno City Council are
subject to judicial review, a petition for which must be filed within thirty
days of the decisions. No judicial review petition was filed within the
required period.


     
On February 27, 2001, the Reno City Council voted
to continue the process of determining the actual cost of construction of the ReTRAC Project, which the
City has recently estimated to be $282 million. On May 24, 2001, Fitzgeralds
Reno commenced an action, CV-N-01-0329-PMP-RAM, in the United States District
Court for the District of Nevada, against the Federal Highway Administration
(“FHWA”), the Nevada Department of Transportation (“NDOT”), and the City of
Reno (collectively, the “Defendants”) for violations of the National
Environmental Policy Act (“NEPA”), codified at 42 U.S.C. §§ 4321-4327. The
claims against all Defendants allege a violation of 42 U.S.C. § 4332 (Violation
of NEPA: Failure to Consider Reasonable Alternatives & Failure to Consider and
Provide Adequate Mitigation Measures). Specifically, Fitzgeralds Reno asserts
the Defendants failed to consider the Partial Cover and Cut Tunnel Alternative
and the use of the Feather River Route on a temporary basis, and failed to
include a plan for mitigating the adverse environmental impacts, including
construction disruption, loss of operating facilities, noise and vibration
impacts, that will be caused by the ReTRAC Project and incurred by Fitzgeralds
Reno and others.


     
On or about June 12, 2001, NDOT filed a motion
to dismiss the Company’s NEPA complaint based on a claim of sovereign immunity and the Company moved to
amend its complaint to substitute as a defendant the Director of NDOT, Thomas
E. Stephens, for the


17







Table of Contents



Defendant NDOT, in lieu of considering NDOT’s Eleventh Amendment immunity
claim. The Court granted this unopposed motion on August 17, 2001, and the
Company filed its amended complaint on August 23, 2001. Defendant FHWA filed
its answer to the Complaint on September 6, 2001, and Defendant Stephens filed
his answer on October 3, 2001. The City filed a motion to dismiss the amended
complaint so far as it named the City as defendant on September 6, 2001. The
Company filed an opposition to that motion on October 24, 2001, and the City
filed a reply in support of its motion to dismiss on or about November 12,
2001. On February 15, 2002, the United States District Court held a hearing to
consider the City’s motion to dismiss. The City’s motion to dismiss was fully
argued and submitted to the Court for a ruling. On March 11, 2002, the Court
issued an order dismissing all of the Company’s claims against the City. The
Court ruled the ReTRAC Project must comply with NEPA but the specific federal
aid statute under which the City is receiving funding for the ReTRAC Project
does not explicitly require the local government body to consent to suit under
NEPA. Accordingly, the Court found the City is not a proper party in the case.
The Court, however, denied the motions to dismiss by FHWA and NDOT stating the
Company is entitled to proceed on the claims against those agencies for a
violation of NEPA. The Company, FHWA and NDOT have agreed to a procedural
schedule that provides for the parties to submit legal briefs on the remaining
NEPA claims against FHWA and NDOT. This schedule calls for the parties to file
opening briefs by December 23, 2002, and answering briefs by February 7, 2003.


     
The City completed its construction cost analysis in July 2002.
Construction contracts for the ReTRAC Project were awarded by the City Council
on July 16, 2002. Preliminary construction activities have commenced and the
Company has been informed by the City that eminent domain proceedings will be
commenced at some time in the future to acquire from the Company fee title to
approximately 3,802 square feet of land and a 4,524 square foot


18







Table of Contents


administrative office building owned and used by the Company, as well as
temporary easements for another approximately 22, 979 square feet of land to
facilitate construction of the ReTRAC Project.


     
The Debtors believe that Fitzgeralds Reno will suffer
a significant loss in business revenue and income while the ReTRAC Project is under construction.
Once completed, the impact of the ReTRAC Project on Fitzgeralds Reno’s business
revenue and income is uncertain; however, the Debtors believe the impact will
be detrimental as a result of the impairment of the physical structures. With
the current uncertainty surrounding the ReTRAC Project, the Debtors are unable
to determine its effect on the value and ultimate sales price for the
Fitzgeralds Reno.





     
          
3. Fitzgeralds Tunica. Fitzgeralds Tunica, which opened in June 1994, is
located in north Tunica County, Mississippi, approximately 30 miles from
downtown Memphis, Tennessee. The actual facility is designed as an Irish
castle and is the focal point of a heavily wooded 121-acre company-owned site
situated by the Mississippi River. The facility was expanded in 1996 and costs
approximately $34,000,000.00. At December 31, 2000, the facility included a
507-room hotel, special events center and indoor swimming pool and a casino
offering 1,336 slot machines, 34 table games, two bars, three restaurants and a
gift shop. In June 2000, construction was completed on a 411 space, covered
parking garage and 170 spaces of surface parking at a cost of $5,600,000.00.





     
          
4. Fitzgeralds Black Hawk. Fitzgeralds Black Hawk is located adjacent to
the entrance to the gaming area of Black Hawk, Colorado, next to the Gilpin
Casino and across the street from Bullwhackers. Fitzgeralds Black Hawk consists
of a casino currently offering 506 slot machines, 12 table games, a restaurant,
a bar and an entertainment area. Fitzgeralds Black Hawk also has a parking
garage (which provides 400 valet parking spaces) adjacent to the casino, which
is currently the only covered parking at a Black Hawk casino and differentiates
Fitzgeralds Black


19







Table of Contents


Hawk from its competitors. The garage foundation was
designed to accommodate a 70 to 80-room hotel and was completed in late Spring 1998. In August 2000, Fitzgeralds Black Hawk
acquired an adjoining parcel of land as part of its plan to expand.







	VII.

	 

	OFFICERS AND DIRECTORS OF THE DEBTORS







     
          
A. Philip D. Griffith (“Griffith”) is the chairman, president and chief
executive officer of FGC and holds similar positions at FSI, FRI, FMI, FLVI,
FI, FFEC, FBHI, FBHII and is president and chief executive officer of 101Main.
Griffith holds a sixty-two percent (62.0%) equity interest in FGC.





     
          
B. Michael E. McPherson (“McPherson”) serves as the executive
vice-president, treasurer, secretary, and chief financial officer for all the
Debtors. McPherson is not a director of any of the Fitzgeralds’ entities.





     
          
C. Max L. Page (“Page”) is a member of the board of directors of FGC and
FRI, with a two point two percent (2.2%) equity ownership interest in FGC. He
currently serves as the executive vice president of FRI and general manager of
Fitzgeralds Reno.





     
          
D. Patricia A. Becker (“Becker”) is a member of the board of directors of
FGC.





     
          
E. Philip P. Hannifin (“Hannifin”) is a member of the board of directors
of FGC.





     
          
F. Paul H. Manske is Executive Vice President of Marketing of FGC.







	VIII.

	 

	EVENTS LEADING UP TO THE FILING OF THE BANKRUPTCY CASES









	 

	A.

	 

	Prepetition Default.




     
FGC issued Two Hundred Five Million Dollars ($205,000,000)
of Notes (the “Notes”) pursuant to the Indenture (the “Indenture”) dated December 30, 1997,
by and among FGC, as issuer, FSI, FRI, FI, FMI, FLVI, FBHI, FBHII, 101Main and
FFEC, as guarantors, and Bank of New York, a New York banking corporation, as
Trustee (“Indenture Trustee”). Of the Two Hundred Two Million Six Hundred
Thousand Dollars ($202,600,000) net proceeds, FGC used One


20







Table of Contents


Hundred Twenty-Three
Million Dollars ($123,000,000) to retire its 13% Senior Secured Notes due 2002,
Five Million Four Hundred Thousand Dollars ($5,400,000) to retire its 13%
Priority Secured Notes due 1998, Thirty-Nine Million Seven Hundred Thousand Dollars ($39,700,000) to retire the
101Main Notes and approximately Twenty Million One Hundred Thousand Dollars
($20,100,000) to retire other secured indebtedness (primarily related to
Fitzgeralds Reno). Of the remaining proceeds, Eight Million Seven Hundred
Thousand Dollars ($8,700,000) was used for expenses of the offering and Five
Million Seven Hundred Thousand Dollars ($5,700,000) was applied to accrued
interest on the retired obligations totaling approximately Ten Million Six
Hundred Thousand Dollars ($10,600,000) on December 30, 1997.


     
The Notes are guaranteed by FSI, FRI, FI, FLVI, FMI,
FBHI, FBHII, 101Main and FFEC. Pursuant to the Security and Pledge Agreement dated December 30,
1997, granted by the Debtors to the Bank of New York as Collateral Agent, a
security interest was taken in each of the Debtors’ inventory, accounts,
pledged securities, distributions, collateral accounts, collateral records,
documents, chattel paper, general intangibles, interments, receivables,
receivables records, intellectual property collateral, contracts, equipment,
fixtures, hedging agreements, insurance policies, motor vehicles, and all
assessions and additions to, all substitutions and replacements for, and all
proceeds or products of any or all of the foregoing (collectively, the“Collateral”).
 The assets excluded from the Collateral are: cash, deposit
accounts, and other cash equivalents, furniture, fixtures and equipment
securing non-recourse indebtedness permitted to be incurred under the
Indenture, assets securing purchase money obligations or capital lease
obligations permitted under the Indenture and any contracts, permits and
licenses which cannot be subjected to a lien without the consent of the parties
(collectively, the “Excluded Assets”). Additionally, on December 30, 1997, the
Debtors executed in favor of the Bank of New York three (3) Security Agreements
in their trademarks, copyrights and patents.


21







Table of Contents


     
The obligation of FGC and the guarantees of FSI, FRI, FI,
FMI, FLVI, FBHI, FBHII, 101Main and FFEC to the Bank of New York are further secured by: (1) the
common stock of FI, FSI, FRI, FMI, FLVI, FBHI and FBHII; (2) a pledge of FBHII’s membership
interest in 101Main; (3) a deed of trust, assignment of leases and security
interest in all of the real and personal property assets (excluding the
Excluded Assets) of Fitzgeralds Las Vegas; (4) a deed of trust, assignment of
leases and security interest in all of the real and personal property assets
(excluding the Excluded Assets) of Fitzgeralds Reno; (5) a deed of trust,
assignment of leases and security interest and ship mortgage in all of the real
and personal property assets (excluding the Excluded Assets) of Fitzgeralds
Tunica5; (6) a deed of trust, assignment of leases and security interest in all
of the real and personal property assets (excluding the Excluded Assets) of
Fitzgeralds Black Hawk; and (7) assignments of leases and rents for FMI and
101Main.


     
On May 13, 1999, FGC board of directors determined
that, pending a restructuring of its indebtedness, it would not be in the best interests of FGC
or the Debtors to make the regularly scheduled interest payments on the Notes.
As a result, FGC is currently in default of certain of its obligations with
respect to the Notes including, among other things, its failure to make
interest payments due thereunder prior to the Petition Date on June 15, 1999,
December 15, 1999 and June 15, 2000, which failures constitute prepetition“
 events of default” under the Indenture.







	 

	B.

	 

	The Workout and Bankruptcy Filing.




     
In 1999, the Debtors entered into negotiations
with the Informal Committee. The Debtors and the Consenting Noteholders reached an agreement
concerning the sale of Debtors’ assets, including going concern sales of the
Operating Companies, most of which is Collateral for the Notes. The terms of
such agreement are embodied in the Restructuring Agreement.






	
5 The Debtors believe that the Fitzgeralds Tunica riverboat is not the proper
subject of a preferred ship mortgage, and that the Indenture Trustee does not
have a perfected lien in the furniture and equipment located at Fitzgerald
Tunica as a result of the Indenture Trustee#s failure to file a UCC-1 financing
statement with the Mississippi Secretary of State.




22







Table of Contents


     
In order to maintain the stability of the operations
and gaming licensing during the process of selling the Operating Companies, the Restructuring
Agreement provides that each of the four executives (“Executive”) comprising of
Senior Management are to remain with FGC through the Liquidation Date to
maximize the value of the Noteholders recoveries. In conjunction therewith,
and although existing employment agreements with each of the Executives are not
to be assumed by FGC, each of the Executives agreed to continue to perform
their duties and carry out their responsibilities as more particularly
described in their existing employment agreements and to continue to be
compensated thereunder. As consideration therefor, the Restructuring Agreement
provided for the Senior Management Incentive Program, which was comprised of
four (4) components, compensation in the same form as contained in their
pre-petition employment agreements while employed during the Chapter 11 Cases,
the Cash Distribution Incentive, the Retention Payment and the non-compete
component. The Cash Distribution Incentive is a percentage of the
Distributable Cash to be disbursed to Senior Management from the Debtors or the
trustee of the Liquidation Trust, as applicable, pursuant to the formula set
forth in the Restructuring Agreement. The Retention Payment is a retention and
severance fund established by the Debtors in the aggregate amount of
$2,400,000.00 to be apportioned among the Executives to be paid on the earlier
of (i) the Effective Date of the Plan, (ii) the Liquidation Date, or (iii) the
date on which such Executive is terminated without cause by the Debtors. The
Retention Payment and the Cash Distribution Incentive Payment are subject to
certain non-compete provisions as more fully described in the Restructuring
Agreement. Finally, Senior Management is to receive Two Million Dollars
($2,000,000.00) in the aggregate for the agreement to execute non-compete
agreements that may be necessary to sell the Operating Companies. Further
details with regard to the four (4) components of the Senior Management
Incentive Program are set forth in detail in Section 5.5 of the Restructuring
Agreement.


23







Table of Contents


     
Concurrent with the negotiations with the Consenting
Noteholders, and in furtherance of the intent of the Restructuring Agreement, the Debtors commenced negotiations
with Majestic Investor for the sale of substantially all of the assets of
Fitzgeralds Tunica, Fitzgeralds Las Vegas, Fitzgeralds Black Hawk and the
membership interest in the Fremont Street Experience Limited Liability Company
owned by FFEC (the “FSELLC Membership Interest” and, collectively, the “Subject
Properties”). The negotiations culminated with the Purchase Agreement.


     
The financial pressure experienced by the Debtors
which necessitated the filing of their respective Petitions is primarily attributable to insufficient
EBITDA to service the Notes interest accruals, maintain the Debtors’ properties
and meet capital expenditure needs as a result of increased gaming competition
both within the Debtors’ various gaming venues and from outside venues.







	 

	C.

	 

	Debtors’ Pre-Bankruptcy Operating Results.




     
As of the Petition Date, the Debtors had on hand
and in their various bank accounts cash and cash equivalents of approximately Eighteen Million Four
Hundred Twenty-Three Thousand Dollars ($18,423,000). This included their
restricted casino bankroll of approximately Seven Million Eight Hundred
Thousand Dollars ($7,800,000). In addition, the Debtors had One Million Seven
Hundred Eighty Thousand Dollars ($1,780,000) of restricted cash serving as
collateral for One Million Seven Hundred Eighty Thousand Dollars ($1,780,000)
of letters of credit and One Million Dollars ($1,000,000) as collateral for
land lease obligations related to Fitzgeralds Las Vegas.


     
For calendar year ending December 31, 2000, the
Debtors reported an Adjusted EBITDA6






	6 “EBITDA” is defined generally as earnings before
interest, taxes on income, depreciation and amortization and is a supplemental financial measurement used
by many gaming business industry analysts in the valuation of gaming
businesses. EBITDA is calculated by adding depreciation and amortization
expenses to income from operations. Adjustments to EBITDA for 1998 and the
first quarter of 1999 included generally extraordinary or non-recurring income
and expenses unrelated to operational income, restructuring expenses and
expenses of FRI, FMI, FLVI and 101Main (#Adjusted EBITDA#).




24







Table of Contents


of Thirty-One Million Eight Hundred Sixty Thousand Dollars ($31,860,000).
For the calendar year ending December 31, 2001, the Debtors reported an
Adjusted EBITDA of Twenty-Nine Million Four Hundred Thirty-Four Thousand
Dollars ($29,434,000). The Debtors estimate that they will continue to report
positive EBITDA for 2002 in amounts generally commensurate with those reported
for 2000 and 2001. Total revenues for the Debtors were Two Hundred Thirty-One
Million One Hundred Eighty-Nine Thousand and Seventy-Eight Dollars
($231,189,078) and net operating revenues were One Hundred Ninety-Six Million
Thirty-One Thousand Dollars ($196,031,000) for 2001, representing decreases of
1.3% and 2.0%, respectively, over total revenues for the Debtors of Two Hundred
Thirty-Four Million One Hundred Forty-Three Two Hundred Twenty-Nine Dollars
($234,143,229) and net operating revenues of Two Hundred Million One Hundred
Two Thousand Dollars ($200,102,000) for 2000.







	IX.

	 

	SIGNIFICANT EVENTS DURING THE REORGANIZED CASES




     
The Debtors are currently operating their businesses as
debtors-in-possession. The Bankruptcy Court has certain supervisory powers
over the operations of the Debtors during the pendency of the Chapter 11 Cases.
These powers are generally limited to reviewing and ruling upon any objections
raised by a party-in-interest to business operations or proposed transactions
of the Debtors. Except as otherwise authorized by the Bankruptcy Court, the
Debtors are required to give notice of any transactions not in the ordinary
course of business and of the compromise of any controversy to
parties-in-interest who request such notice. In addition, the Bankruptcy Court
supervises the employment of attorneys, accountants and other professionals.







	 

	A.

	 

	First Day Motions.







     
          
General Ex Parte Applications. Concurrent with the filing of the
Petitions, the Debtors presented to the Bankruptcy Court various motions
designed to assist the Debtors in making a smooth transition into Chapter 11,
which “first day motions” included:

25







Table of Contents



     
          
1. Ex Parte Application for Order directing Joint Administration of Cases
Pursuant to Fed. R. Bankr. P. 1015(b).


     
          
2. (i) Ex Parte Application for Order Approving Employment of Gordon &
Silver, Ltd., as Attorneys for Debtors; (ii) an Ex Parte Application for Order
Approving Employment of Restructuring/Reorganization Advisor; (iii) an Ex Parte
Application for Order Approving Employment of Arthur Andersen LLP as Valuation
Advisors; (iv) Ex Parte Application for Order Approving Employment of Deloitte&
 Touche, LLP as Debtors’ Independent Auditors and Accountants; (v) Ex Parte
Application for Order Approving Employment of Eaton and Cottrell, P.A. as
Mississippi Gaming Counsel; (vi) Ex Parte Application for Order Approving
Employment of Hughes Hubbard & Reed LLP as Special Counsel; and (vii) Ex Parte
Application For Order Approving Employment of Lohf Shaiman P.C. as Colorado
Gaming Counsel.


     
          
3. Ex Parte Application for Order Authorizing Debtor-in-Possession to Pay
Pre-Petition Wages, Benefits and Reimbursable Employee Expenses.


     
          
4. Ex Parte Application for Order Permitting Debtor-in-Possession to Honor
Casino Chips, Tokens and Other Gaming Liabilities.


     
          
5. Ex Parte Application For Order Permitting Debtor to Honor Hotel Room
and Other Customer Deposits and to Honor Travel Agent Commissions.


     
          
6. Ex Parte Application For Order Authorizing Debtors-in-Possession to
Maintain and Use Existing Bank Accounts, Credit Card Merchant Numbers and
Depository Bank Accounts and Waiver of 11 U.S.C. §345(b).


     
          
7. Ex Parte Motion For Order Fixing Time Within Which Proofs of Claim Must
be Filed and Establishing Notice Procedures.


     
          
8. Ex Parte Application For Order Limiting Notice Pursuant To Bankruptcy
Rule 2002.

26







Table of Contents


     
          
 9. Ex Parte Application for Order Authorizing Debtors-in-possession to
Employ and Compensate Certain Attorneys in the Ordinary Course of Business.


     
These first day motions were approved and first day orders
entered by the Bankruptcy Court.







	 

	B.

	 

	Other Pleadings.







     
          
1. Assumption of Reno Parking Garage Ground Lease. On December 22, 2000,
the Debtors filed a Motion for Approval of Assumption of Reno Parking Garage
Ground Lease (“Lease”). The Debtors’ motion requested the approval of the
assumption of the Lease which provides Fitzgeralds Reno the land upon which the
Fitzgeralds Reno parking garage is situated. An interim order treating the
motion as requesting an extension of the deadline to assume the Lease was
entered and the matter has now been continued pending confirmation of the Plan.
All obligations due under the Lease are current. Prior to the consummation of
the sale of Fitzgeralds Reno, the Debtors will determine whether or not to
assume and assign the Lease. The non-debtor parties to the Lease have the
right to object to assumption and assignment of the Lease. All available
rights under the Bankruptcy Code and, except as limited by the Bankruptcy Code,
all available rights under state law, shall be preserved for the benefit of
non-debtor parties to the Lease and related agreements. Any claims arising
from the rejection of the Lease shall be a Class 7 Claim to the extent it is
determined to be an Allowed Claim by the Bankruptcy Court and shall be paid in
the same manner as other Class 7 Claims. Scout Development Corporation
(“Scout”) contends the Lease and its related obligations must be assumed or
rejected as an entire package by the buyer, unless agreed to in writing by the
non-debtor party to the Lease.





     
          
2. Assumption of Real Property Leases. On December 22, 2000, Debtors
filed a Motion for Order to Authorize Assumption of Leases of Nonresidential
Real Property. Debtors’ motion requested the approval of the assumption of
various non-residential leases, including ground

27







Table of Contents



leases upon which Fitzgeralds
Las Vegas is situated. The ground leases upon which Fitzgeralds Las
 Vegas is situated were assumed and assigned pursuant to the sale to
Majestic Investor. For all real property leases in the Reno area, the time to
assume or reject the leases was extended pending the sale of Fitzgeralds
Reno. All obligations due on these leases are current.







	X.

	 

	DETAILED DESCRIPTION OF THE PLAN









	 

	A.

	 

	Treatment of Unclassified Claims Under the Plan.







     
          
1. Treatment of Administrative Claims. Each Allowed Administrative Claim,
other than Preserved Ordinary Course Administrative Claims treated below, shall
be paid in full from Plan Distribution Cash (or otherwise satisfied in
accordance with its terms) upon the latest of: (i) the Distribution Date; (ii)
such date as may be fixed by the Bankruptcy Court, or as soon thereafter as
practicable; (iii) the tenth (10th) Business Day after such Claim is Allowed,
or as soon thereafter as practicable; and (iv) such date as the holder of such
Claim and the Debtors shall agree upon.





     
          
2. Treatment of Preserved Ordinary Course Administrative Claims. Each
Allowed Preserved Ordinary Course Administrative Claim not paid by a Debtor
prior to the Effective Date shall be paid, performed or settled by the
Liquidation Trust pursuant to the terms and conditions under which such Claim
arose.





     
          
3. Retention and Severance. Pursuant to that certain Order re: Motion for
Order (1) Confirming Fitzgeralds Gaming Corporations’ Authority to Use Debtor’s
Available Cash to Compensate, in the Ordinary Course of Business, Senior
Management; (2) Approving Implementation and Funding of (i) Senior Management
Retention and Severance Program and (ii) Distribution Incentive Program; and
(3) Approving Payments to Senior Management For Certain Non-competition
Agreements entered by the Court on December 21, 2000, Two Million Four Hundred
Thousand Dollars ($2,400,000.00) was earmarked for payment of the Retention
Payment

28







Table of Contents


and was placed in escrow established pursuant to that certain Escrow
Agreement dated December 1, 2000. Provided each of the Executives is paid his
Retention Payment from the escrowed funds, each of the Executives shall have no Administrative Claim in respect of
severance from any of their pre-petition employment agreements against Debtors’ estates or the
Liquidation Trust. Each Executive shall receive payment of his Retention
Payment from the escrowed funds in full in Cash on the earlier to occur of (i)
the Effective Date of a plan that effectuates the sale of the assets (or stock)
of the last Operating Company (to the extent not previously disposed of
pursuant to Bankruptcy Code Section 363) and transfers all Residual Assets and
Tail liabilities to a Liquidating Trust or (ii) the liquidation date or (iii)
the date on which such Executive is terminated without cause by the Debtors
(with consent of the Informal Committee ). To date, none of the Executives
have received any of the Retention Payment.





     
          
4. Cash Distribution Incentive. Each of the Executives shall have (in
addition to their rights in the Distributable Cash) an Allowed Administrative
Claim (the “Cash Incentive Claims”) in respect of amounts owing but unpaid to
them pursuant to Section 5.2 of the Restructuring Agreement which shall be paid
to the Executives on the Effective Date pursuant to Section 6.1.4 of the Plan.
Each of the Executives shall also receive, as distribution in respect of the
Cash Incentive Claims, beneficial interests in the Liquidating Trust with
regard to that Pro Rata Share of Net Residual Assets as provided for in the
Restructuring Agreement. Such beneficial interests shall entitle the
Executives pari passu to payments due to them with respect to any Cash
distributed to the Noteholders in respect of their beneficial interests in the
Liquidating Trust. To date, the Executives have received an aggregate of
$6,611,216.00 in respect of the Cash Distribution Incentive provisions in the
Restructuring Agreement. It is anticipated that the Executives will receive in
aggregate 8.5% of the Distributable Cash (as defined in the Restructurings
Agreement) once the Fitzgeralds Reno sale is concluded, and the Executives in
the

29







Table of Contents


aggregate will also receive 8.5 % of the Net Residual Assets distributed
from the Liquidating Trust.





     
          
5. Treatment of Priority Tax Claims. Each Allowed Priority Tax Claim, if
any, will be paid in full from Plan Distribution Cash the later of (i) the
Distribution Date; (ii) the tenth
 (10th) Business Day after the date on which an order allowing such Claim
becomes a Final Order; or (iii) such other time as is agreed upon by the holder
of such Claim and the Debtors prior to the Effective Date and after the
Effective Date, the Liquidation Trust.







	 

	B.

	 

	Classification of Treatment of Claims and Equity Interests Under the
Plan.







     
          
1. Treatment of Class 1 (Priority Wage Claims). Each Allowed Priority Wage
Claim, if any, shall be paid in full in Plan Distribution Cash upon the latest
of: (i) the Distribution Date; (ii) such date as may be fixed by the Bankruptcy
Court; (iii) the tenth (10th) Business Day after such Claim is Allowed, or as
soon thereafter as practicable; and (iv) such date as the holder of such Claim
and the Debtors, and after the Effective Date, the Liquidation Trust, shall
agree. All Allowed Priority Wage Claims shall be paid contemporaneous with
payment of the Allowed Claims, including interest from the Petition Date at the
Federal Judgment Rate. Class 1 is unimpaired under the Plan. Holders of
Claims in Class 1 are not entitled to vote on the Plan. The Debtors are
unaware of any Priority Wage Claims that were not paid pursuant to a first day
order.





     
          
2. Treatment of Class 2 (Priority Benefit Plan Contribution Claims). Each
Allowed Priority Benefit Plan Contribution Claim, if any, shall be paid in full
in Plan Distribution Cash upon the latest of: (i) the Distribution Date; (ii)
such date as may be fixed by the Bankruptcy Court; (iii) the tenth (10th)
Business Day after such Claim is Allowed, or as soon thereafter as practicable;
and (iv) such date as the holder of such Claim and the Debtors, and after the
Effective Date, the Liquidation Trust, shall agree. All Allowed Priority
Benefit Plan Contribution Claims shall be paid contemporaneous with payment of
the Allowed Claims, including interest from the Petition Date at the Federal
Judgment Rate. Class 2 is unimpaired under the Plan. Holders of

30







Table of Contents



 Claims in Class 2 are not entitled to vote on the Plan. Debtors are unaware of any
Priority Benefit Plan Contribution Claims that were not paid pursuant to a
first day order.





     
          
3. Treatment of Class 3 (Priority Customer Deposit Claims). Each Allowed
Priority Customer Deposit Claim, if any, shall be paid in full in Plan
Distribution Cash upon the latest of: (i) the Distribution Date; (ii) such date
as may be fixed by the Bankruptcy Court; (iii) the tenth (10th) Business Day
after such Claim is Allowed, or as soon thereafter as practicable; (iv) such
date as the holder of such Claim and the Debtors, and after the Effective Date,
the Liquidation Trust, shall agree; and (v) a date when such Priority Customer
Deposit Claim becomes due and owing. All Priority Customer Deposit Claims shall
be paid contemporaneous with payment of the Allowed Claims, including interest
from the Petition Date at the Federal Judgment Rate. Class 3 is unimpaired
under the Plan. Holders of Claims in Class 3 are not entitled to vote on the
Plan. The Debtors are unaware of any Priority Customer Deposit Claims that
were not honored pursuant to a first day order.





     
          
4. Treatment of Class 4 (Secured Tax Claims). Each Allowed Secured Tax
Claim shall be paid in full in Plan Distribution Cash upon the latest of: (i)
the Distribution Date; (ii) such date as may be fixed by the Bankruptcy Court;
(iii) the tenth (10th) Business Day after such Claim is Allowed, or as soon
thereafter as practicable; (iv) such date as the holder of such Claim and the
Debtors, and after the Effective Date, the Liquidation Trust, shall agree; and
(v) such date as the holder of such Claim and the Debtors, and after the
Effective Date, the Liquidation Trust, shall agree. Class 4 is unimpaired
under the Plan. Holders of Claims in Class 4 are not entitled to vote on the
Plan. The Debtors are unaware of any Secured Tax Claims.





     
          
5. Treatment of Class 5 (Miscellaneous Secured Claims). At the option of
the Informal Committee, the holder of any Allowed Secured Claim in Class 5
shall receive one (1) of the following alternative treatments:

31







Table of Contents


     
          
      a) on the Distribution Date, or on such other date thereafter as may be
agreed to by the holder of such Claim and the Debtors or the Liquidation Trust,
as the case may be, shall abandon the collateral securing such Claim to the
holder thereof in full satisfaction and release of such Claim; or


          
     
     b) on the Distribution Date, the holder of such Claim shall receive, on
account of such Claim, Plan Distribution Cash equal to its Allowed Secured
Claim or such lesser amount to which the holder of such Allowed Secured Claim
shall agree, in full satisfaction and release of such Allowed Secured Claim.


     
          
Class 5 is unimpaired under the Plan. Holders of Allowed Claims in Class
5 are not entitled to vote on the Plan.





     
          
6. Treatment of Class 6 (Noteholders Secured Claims).


     
          
     a) Distributions. From and after the Effective Date, each Noteholder as
of the Distribution Record Date shall be deemed to have received in
consideration for the Allowed Secured Claim portion of its Allowed Claim its
pro rata share of the balance of the proceeds of Collateral to the extent such
proceeds are not distributed to the Indenture Trustee prior to the Effective
Date. Such proceeds shall be distributed to the Indenture Trustee for the
benefit of and distribution to the Noteholders in accordance with the
Indenture. The Indenture Trustee shall release and discharge any remaining
Liens of the Notes Security Documents as required to receive related proceeds.


     
          
     b) Reserves. All distributions under the Plan to Noteholders and the
Indenture Trustee and under subsection 5.2 of the Plan are subject to the
requirements of subsection 9.2(d) of the Plan regarding Plan Distribution Cash.





     
          
7. Treatment of Class 7 (General Unsecured Claims). Each holder of an
Allowed General Unsecured Claim shall receive Plan Distribution Cash equivalent
to its Allowed

32







Table of Contents


General Unsecured Claim plus interest at the Federal Judgment
Rate from the Petition Date until paid upon the latest of: (i) the
Distribution Date; (ii) the tenth (10th) Business Day after such Claim is
Allowed, or as soon thereafter as practicable; and (iii) such date as the
holder of such Claim and the Debtors have agreed or shall agree. Class 7 is
unimpaired under the Plan. Holders of General Unsecured Claims in Class 7 are
not entitled to vote on the Plan.





     
          
8. Treatment of Class 8 (Noteholder Deficiency Claims).





     
          
     a) Noteholder Deficiency Claims. The Allowed Noteholder Deficiency Claims
shall be satisfied by the distribution to the Indenture Trustee on the
Distribution Date of its proportionate share of the Liquidation Trust Shares to
be distributed to the Noteholders. In order to qualify for a distribution,
Noteholders shall have complied with the following:


     
               
     i) Surrender of Securities or Debt Instruments. On or before the
Distribution Date, or as soon as practicable thereafter, each Noteholder shall
surrender the Notes evidencing its Allowed Noteholder Deficiency Claim to the
Indenture Trustee as the Disbursing Agent for the Class 8 Claims. No
distribution of property hereunder shall be made to or on behalf of any such
Noteholder unless and until the Notes are delivered to the Indenture Trustee,
or the unavailability of such Notes is reasonably established to the
satisfaction of the Liquidation Trust Board of Managers. In the event any
Noteholder seeks to establish the unavailability of the Note evidencing such
Allowed Noteholder Deficiency Claim, the Liquidation Trust Board of Managers
shall, within thirty (30) Business Days after receipt of the Noteholder’s
evidence of unavailability and statement of indemnity of the Liquidation Trust
Board of Managers, (i) provide the Noteholder, in writing, with a detailed
description regarding the rejection of such evidence and statement of
indemnity; or (ii) deliver to the Indenture Trustee a notice of compliance and
distribute to such Noteholder its Pro-Rata Share of Liquidation Trust Shares.
Any such Noteholder who fails to surrender or cause to be surrendered such
Notes or fails to execute and deliver an affidavit of loss


33







Table of Contents


and indemnity
reasonably satisfactory to the Liquidation Trust Board of Managers prior to the
second anniversary of the Effective Date, shall be deemed to have forfeited
all rights and claims in respect of such Notes and shall not participate in any
distribution hereunder, and all property in respect of such forfeited
distribution, including interest accrued thereon, shall revert to the
Liquidation Trust notwithstanding any federal or state escheat laws to the
contrary.


     
               
    ii) Distribution Record Date. At the close of business on the
Distribution Record Date, the transfer ledgers of the Indenture Trustee shall
be closed, and there shall be no further changes to the record of Noteholders.
The Liquidation Trust Board of Managers and the Indenture Trustee shall have no
obligation to recognize any transfer of such Notes occurring after the
Distribution Record Date. The Indenture Trustee and Liquidation Trust Board of
Managers shall be entitled instead to recognize and deal for all purposes
hereunder with only those Noteholders stated on the transfer ledgers as of the
close of business on the Distribution Record Date.


     
              
    iii) Delivery of Distributions. Distribution of property shall be made by
the Indenture Trustee to Noteholders at the addresses contained in the official
records of the Indenture Trustee. If any Noteholder’s distribution is returned
as undeliverable, no further distributions to such Noteholder shall be made
unless and until the Indenture Trustee and Liquidation Trust are notified of
such Noteholder’s then current address, at which time all missed distributions
shall be made to such holder without interest. Undeliverable distributions
shall be returned to the Indenture Trustee until such distributions are
claimed. All claims for undeliverable distributions shall be made on or before
the second anniversary of the Effective Date. After such date, all unclaimed
property shall revert to the Liquidation Trust and the claim of any Noteholder
or successor to such Noteholder with respect to such property shall be
discharged and forever barred notwithstanding any federal or state escheat laws
to the contrary.

34







Table of Contents


     
              
   iv) Distribution of Liquidation Trust Funds. All funds or other property
received by the Liquidation Trust shall be applied and distributed in
accordance with the Liquidation Trust Agreement and the Plan.





     
          
9. Treatment of Class 9 (Intercompany Claims). All Intercompany Claims in
existence on the Effective Date shall be extinguished and none of the Debtors
shall receive any consideration from any other Debtor as a result of any
Intercompany Claim. Class 9 is impaired under
the Plan. Class 9 is deemed to have voted to reject the Plan. Holders of
Claims in Class 9 will not be solicited to vote on the Plan.





     
          
10. Treatment of Class 10 (Subsidiary Equity Securities). All Subsidiary
Equity Securities shall be canceled and terminated without any further act or
action under any applicable agreement, law, regulation, order or rule. Class
10 is impaired under the Plan. Class 10 is deemed to have voted to reject the
Plan. Holders of Claims in Class 10 will not be solicited to vote on the Plan.





     
          
11. Treatment of Class 11 (Old FGC Preferred Stock). Holders of Old FGC
Preferred Stock shall receive nothing for their Old FGC Preferred Stock, and
the Old FGC Preferred Stock shall be canceled and extinguished without further
act or action under any applicable agreement, law, regulation, order or rule.
Class 11 is impaired under the Plan. Class 11 is deemed to have voted to
reject the Plan. Holders of Claims in Class 11 will not be solicited to vote
on the Plan.





     
          
12. Treatment of Class 12 (FSI Warrant Claims). Holders of FSI Warrant
Claims shall receive nothing for their FSI Warrant Claims, and the FSI Warrants
shall be canceled and extinguished without further act or action under any
applicable agreement, law, regulation, order or rule. Class 12 is impaired
under the Plan. Class 12 is deemed to have voted to reject the Plan. Holders
of Claims in Class 12 will not be solicited to vote on the Plan.

35







Table of Contents





     
          
 13. Treatment of Class 13 (Old FGC Common Stock). Holders of Old FGC
Common Stock and any remaining FGC Equity Securities shall receive nothing for
their Old Common Stock and remaining FGC Equity Securities, and the Old FGC
Common Stock shall be canceled and extinguished without further act or action
under any applicable agreement, law, regulation, order or rule. Nothing
contained herein shall affect the right of a holder of Old FGC Common Stock to
receive other consideration elsewhere under the Plan or through Final Orders of
the Bankruptcy Court not related to the Old FGC Common Stock. Class 13 is
impaired under the Plan. Class 13 is deemed to have voted to reject the Plan.
Holders of Claims in Class 13 will not be solicited to vote on the Plan.







	 

	C.

	 

	Means of Implementation of the Plan.







     
          
1. Plan Implementation Steps Occurring on Effective Date. On the
Effective Date, the following events shall occur in the following sequence:


     
          
     a) FGC shall cause FMC and NCI to be merged with and into FGC pursuant to
NRS Chapter 92A, with FGC being the surviving entity in the mergers. At or
about the same time as such mergers, FGC and FI shall cause FAMI to be merged
with and into FGC pursuant to NRS Chapter 92A, with FGC being the surviving
entity and with no consideration being paid to FAMI’s shareholders in such
merger. On or before the Effective Date, FGC shall execute or cause to be
executed, and shall file or cause to be filed with the Nevada Secretary, the
articles of merger and any related documents required for the mergers of FMC,
NCI and FAMI to be effective at the earliest time reasonably practicable on the
Effective Date.


     
          
     b) Each of the Debtor Subsidiaries shall merge with and into FGC pursuant
to NRS Chapter 92A, with FGC being the surviving entity and with no
consideration being paid to the respective shareholders of the Debtor
Subsidiaries in such mergers. On or before the Effective Date, the Debtors
shall execute or cause to be executed, and shall file or cause to be

36







Table of Contents



filed with the Nevada Secretary and any other applicable governmental authorities, the
articles of merger and any related documents required for the mergers of the
Debtor Subsidiaries to be effective at the earliest time reasonably practicable
on the Effective Date after the mergers specified in Section 6.1.1 of the Plan.


     
          
     c) The Plan Distribution Cash shall be delivered to the Liquidation Trust
to be held and preserved by the Liquidation Trust as property of the Estate to
be paid in accordance with the Plan.


     
          
     d) Payment from Plan Distribution Cash of all monies due but not yet paid
in accordance with the Senior Management Incentive Program, including the
Retention Payments and Cash Incentive Claims to the extent not previously paid, and delivery to
Senior Management of their Liquidation Trust Shares as provided for in the
Plan, the Restructuring Agreement and Compensation Order.


     
          
     e) The Liquidation Trust Agreement in substantially the same form as
Exhibit “D” attached hereto shall be executed and the Liquidation Trust shall
be deemed effective. FGC shall settle the Liquidation Trust by irrevocably
delivering and conveying to the Liquidating Trust (1) all Residual Assets; (2)
all of the remaining assets of FGC; and (3) all rights to prosecute Litigation
Claims. The Liquidation Trust shall assume all of the Tail Liabilities of FGC.
The Liquidation Trust shares shall be distributed as provided for in the Plan,
the Liquidation Trust Agreement and the Restructuring Agreement.


     
          
     f) The FGC Equity Securities shall be deemed cancelled. FGC shall be
dissolved pursuant to NRS 78.622 without action on the part of the directors,
officers or holders of old FGC Common Stock. All of the officers and directors
of FGC shall be deemed to have resigned. FGC shall provide such officers and
directors with “tail” errors and omissions insurance coverage for a period of
not less than three (3) years after the Effective Date similar to that provided

37







Table of Contents


officers and directors as of the Confirmation Date. From the Confirmation
Date until the Effective Date, all the existing outside directors of FGC will
continue to be compensated at their present levels.


     
          
     g) All fund or other property received by the Liquidation Trust shall be
applied and distributed in accordance with the Liquidation Trust Agreement and
the Plan.





     
          
2. Distribution of Plan Distribution Cash. The Debtors shall determine
the necessary amount of Plan Distribution Cash with the consent of the Informal
Committee (not to be unreasonably withheld). In the event agreement cannot be
reached between the Debtors and the Informal Committee prior to the Effective
Date, the Bankruptcy Court shall determine the amount of Plan Distribution
Cash.





          
     
3. Notice of Effectiveness. When all of the steps contemplated by Section
6.1 of the Plan have been completed, the Debtors shall file with the Bankruptcy
Court and serve upon all holders of Claims and all potential holders of
Administrative Claims known to the Debtors (whether or not disputed), a Notice
of Effective Date of Plan. The notice shall include notice of the
Administrative Claim Bar Date and Professional Fee Claim Bar Date.





     
          
4. Surrender of Securities or Debt Instruments. On or before the
Distribution Date, or as soon as practicable thereafter, each Noteholder shall
surrender the Notes evidencing its Allowed Noteholder Deficiency Claim to the
Indenture Trustee as the Disbursing Agent for the Class 8 Claims. No
distribution of property hereunder shall be made to or on behalf of any such
Noteholder unless and until the Notes are delivered to the Indenture Trustee or
the unavailability of such Notes is reasonably established to the satisfaction
of the Liquidation Trust Board of Managers. In the event any Noteholder seeks
to establish the unavailability of the Note evidencing such Allowed Noteholder
Deficiency Claim, the Liquidation Trust Board of Managers shall, within thirty
(30) Business Days after receipt of the Noteholder’s evidence of unavailability
and statement of

38







Table of Contents


indemnity of the Liquidation Trust Board of Managers, (i)
provide the Noteholder, in writing, with a detailed description regarding the
rejection of such evidence and statement of indemnity; or (ii) deliver to the
Indenture Trustee a notice of compliance and distribute to such Noteholder any
amounts distributable from the Liquidation Trust. Any such Noteholder who
fails to surrender or cause to be surrendered such Notes or fails to execute
and deliver an affidavit of loss and indemnity reasonably satisfactory to the
Liquidation Trust Board of Managers prior to the second anniversary of the
Effective Date, shall be deemed to have forfeited all rights and claims in
respect of such Notes and shall not participate in any distribution hereunder,
and all property in respect of such forfeited distribution, including interest
accrued thereon, shall revert to the Liquidation Trust notwithstanding any
federal or state escheat laws to the contrary.





     
          
5. Ratification of Liquidation Trust. On the Effective Date, each Person
to whom an interest in the Liquidation Trust is distributed shall be deemed to
have ratified and become bound by the terms of the Liquidation Trust Agreement.





     
          
6. No Corporate Action Required. As of the Effective Date: (i) the
adoption, execution, delivery and implementation or assignment of all
contracts, leases, instruments, releases and other agreements related to or
contemplated by the Plan; (ii) the transfer of Estate assets provided for in
Section 6.1 of the Plan; (iii) the mergers contemplated by Section 6.1 of the
Plan; and (iv) the other matters provided for under or in furtherance of the
Plan involving corporate action to be taken by or required of the Debtors shall
be deemed to have occurred and be effective as provided therein, and shall be
authorized and approved in all respects without further order of the Bankruptcy
Court or any requirement of further action by the stockholders, directors or
officers of the Debtors.





     
          
7. Informal Committee. Any consent, waiver or other action pursuant to
this Plan to be given by, or power conferred on, the Informal Committee shall
be exercised by a vote of

39







Table of Contents


members of the Informal Committee who in the
aggregate own, beneficially own or have investment discretion with respect to
Notes comprising at least a majority of the outstanding principal amount of the
Notes. There shall be no requirement of a meeting or notice to all Noteholders
or Informal Committee members as a prerequisite to such a vote, and the vote
may be by written consent of sufficient members of the Informal Committee.





     
          
8. Duties of Indenture Trustee. Following the Effective Date, the
Indenture shall remain in effect to the extent required under the Plan and the
Liquidation Trust. The Indenture Trustee shall take only those actions as from
time-to-time requested by the Liquidation Trust Board of Managers on behalf of
the Liquidation Trust, in accordance with the Indenture. On and after the
Effective Date, the indemnity obligations to the Indenture Trustee under the
Indenture shall become the obligations of the Liquidation Trust but in no event
shall the Plan Distribution Cash of the beneficial interest of holders of General Unsecured Claims or Senior Management be
subject to such indemnity claims.





     
          
9. Executory Contracts and Unexpired Leases.


     
          
     a) Executory Contracts. All executory contracts and unexpired leases that
both exist on the Confirmation Date and are set forth on the schedule of
assumed executory contracts and unexpired leases attached to the Plan as
Schedule “7.1,” shall be deemed assumed by the Debtors and assigned to the
purchaser of substantially all of the assets of the Fitzgeralds Reno Hotel
Casino, or, at the election of the informal committee, the Liquidation Trust.
Schedule 7.1 may be modified by the Debtors up to the Effective Date, with
notice to the non-debtor party to the contract affected by such modification
and the Informal Committee.


     
          
     b) Approval of Assumption or Rejection. Entry of the Confirmation Order
shall constitute as of the Effective Date: (i) approval, pursuant to Bankruptcy
Code Section 365(a), of the assumption by the relevant Debtors of each
executory contract and unexpired lease

40







Table of Contents


listed on Schedule 7.1, (ii) approval,
pursuant to Bankruptcy Code Section 365(f), of the assignment of each such
executory contract and unexpired lease to the Liquidation Trust; and (iii)
authorization for the relevant Debtors to reject each executory contract and
unexpired lease to which any of the Debtors are parties and which is not listed
on Schedule 7.1 and merely assumed, assumed and assigned nor rejected by
separate order prior to the Effective Date. Upon the Effective Date, each
counter party to an executory contract or unexpired lease listed on Schedule
7.1 of the Plan shall be deemed to have consented to assumption and assignment
contemplated by Bankruptcy Code Section 365(c)(1)(B), to the extent such
consent is necessary for such assumption and assignment. Notwithstanding
anything contained herein to the contrary, up to the Confirmation Date the
Debtors, with the consent of the Informal Committee, shall have the right to
add to or delete from Schedule 7.1 of the Plan any executory contract or
unexpired lease.


     
          
     c) Cure of Defaults. The Liquidation Trust shall Cure any defaults
respecting each executory contract or unexpired lease assumed pursuant to
Section 7.1 of the Plan upon the latest of (i) the Effective Date or as soon
thereafter as practicable; (ii) such dates as may be fixed by the Bankruptcy
Court or agreed upon by the Debtors, with the consent of the Informal Committee
and after the Effective Date, the Liquidation Trust; or (iii) the tenth (10th)
Business Day after the entry of a Final Order resolving any dispute regarding
(a) a Cure amount; (b) the ability of FGC or the Liquidation Trust to provide“
 adequate assurance of future performance” under the executory contract or
unexpired lease assumed pursuant to the Plan in accordance with Section
365(b)(1) of the Bankruptcy Code; or (c) any matter pertaining to assumption,
assignment or the Cure of a particular executory contract or an unexpired
lease.


     
          
     d) Post-Petition Date Contracts and Leases. Executory contracts and
unexpired leases entered into and other obligations incurred after the Petition
Date by the Debtors

41







Table of Contents



shall be performed by the Debtors or the Liquidation Trust, as applicable, in
the ordinary course of their business.


     
          
     e) Restructuring Agreement. Entry of the Confirmation Order shall
constitute authorization for the assumption and assignment on the Effective
Date by Debtors to the Liquidation Trust of the (a) Restructuring Agreement to
the extent obligations and rights contained therein remain unperformed, (b) the
Risk Management Contracts existing as of the Effective Date. The Liquidation
Trust shall assume and be bound by all such obligations and rights which
remain.


     
          
     f) Bar Date. All proofs of Claims with respect to Claims arising from the
rejection of any executory contract or unexpired lease shall be filed with
KPMG, LLP, Claims Agent, Attention: Jeff Truitt, 355 South Grand Avenue, #2000,
Los Angeles, California 90071, no later than thirty (30) days after the entry
of the Effective Date. Any Claim not filed within such time shall be forever
barred.





     
          
10. Indemnification Obligations. Any obligations of the Debtors to
indemnify any officer, director or employee serving as a fiduciary of any
employee benefit plan or program of the Debtors, pursuant to charter, by-laws,
contract or applicable state law shall be deemed to be, and shall be treated
as, an executory contract and assumed by (and where applicable, assigned to)
the Liquidation Trust on the Effective Date; provided, however, that all
obligations of FGC under such executory contracts shall be deemed satisfied by
FGC’s payment in full prior to the Effective Date of the premium for a
claims-made insurance policy providing $10,000,000.00 of tail coverage with a
three-year term, substantially on the same terms as the FGC Directors’ &
Officers’ insurance policy in effect as of the Confirmation Date.







	 

	D.

	 

	Conditions to Confirmation of Plan.







     
          
1. Conditions To Confirmation. The following are conditions precedent to
confirmation of the Plan:

42







Table of Contents


     
          
     a) The Confirmation Order shall have been entered and be in form and
substance reasonably acceptable to the Debtors and the Informal Committee;


     
          
     b) There shall have been no Consenting Noteholder Default, Debtor Default
or Senior Management Default under the Restructuring Agreement, which default
has not been waived pursuant to such agreement, and there shall have been no
termination upon condition subsequent of the Restructuring Agreement





     
          
2. Conditions To Effectiveness. The following are conditions precedent to
the occurrence of the Effective Date:


     
          
     a) The Confirmation Order shall be a Final Order, except that the Debtors
reserve the right, with the consent of the Informal Committee, to cause the
Effective Date to occur notwithstanding the pendency of an appeal of the
Confirmation Order, under circumstances that would moot such appeal;


     
          
     b) No request for revocation of the Confirmation Order under Section 1144
of the Bankruptcy Code shall have been made, or, if made, shall remain pending,
including any appeal;


     
          
     c) All documents necessary to implement the transactions contemplated by
the Plan shall be in form and substance reasonably acceptable to the Debtors
and the Informal Committee;


     
          
     d) Sufficient Plan Distribution Cash is set aside, reserved and withheld
to make distributions required by the Bankruptcy Code and the Plan;


     
          
     e) Final Orders are entered approving the sale by 363 Motion of the
Operating Companies; and


     
          
     f) The sales of the Operating Companies have been consummated and the
Debtors have ceased to have any gaming activities;

43







Table of Contents


     
          
      g) The Debtors shall have received any and all required approvals by the
Gaming Authorities to consummate the sales of the Operating Companies and the
Plan; and


     
          
     
h) The Debtors shall not have adopted any retention or severance plans for
employees.





     
          
3. Waiver of Conditions. The Conditions to Confirmation and Conditions to
Effectiveness may be waived in whole or in part by the Debtors and the Informal
Committee at any time, without notice, an order of the Bankruptcy Court or any
further action other than proceeding to Confirmation and consummation of the
Plan.







	XI.

	 

	RISK FACTORS




     
In addition to matters addressed elsewhere in this
Disclosure Statement, the Plan involves certain significant risks which should be taken into
consideration.


     
Even if the requisite acceptances are received, the Plan may not be
confirmed by the Bankruptcy Court. Confirmation of the Plan requires, among
other things, a finding by the Bankruptcy Court that it is not likely that
there will be a need for further financial reorganization and that the value of
distributions to dissenting members of impaired Classes of Creditors and Equity
Securities not be less than the value of distributions such Creditors and
holders of Equity Securities would receive if the Debtors were liquidated under
Chapter 7 of the Bankruptcy Code. Although the Debtors believe that the Plan
will not be followed by a need for further financial reorganization and that
dissenting members of impaired Classes of Creditors and Equity Securities will
receive distributions at least as great as would be received in a liquidation
under Chapter 7 of the Bankruptcy Code, there can be no assurance that the
Bankruptcy Court will conclude that these tests have been met.


     
Because the Plan provides for the orderly liquidation of
the Debtors, common risk factors found in typical reorganizations are not deemed to be
material or otherwise applicable with respect


44







Table of Contents


 to the Plan. The Debtors are not
being reorganized as going concerns. As such, there are no financing or
regulatory (gaming or otherwise) contingencies. Rather, the only
financing issues involve the sale of the Operating Companies, but those issues
belong to the potential buyer(s), and are not a condition to confirmation or
the effectuation of the Plan or performance thereunder. As of the date of this
Disclosure Statement, the only sale which is not concluded is Fitzgeralds Reno.


     
A condition to the effectiveness of the Plan is that the
sales of the Operating Companies have been consummated. Although the Plan may be confirmed,
there is a risk that the Debtors will be unable to conclude the final sale of
Fitzgeralds Reno. The Plan would have to be modified or alternative plans
would have to be considered in such a case.







	XII.

	 

	POST EFFECTIVE DATE OPERATIONS AND PROJECTIONS









	 

	A.

	 

	Summary of Title to Property and Dischargeability.







     
          
1. Revesting of Assets. Subject to the provisions of the Plan, the
property of the Estates shall be transferred to the Liquidation Trust on the
Effective Date. As of the Effective Date, all such property shall be free and
clear of all Liens, Claims, and Equity Securities except as otherwise provided
in the Plan.





     
          
2. Preservation of Litigation Claims. In accordance with Section
1123(b)(3) of the Bankruptcy Code, and except as otherwise expressly provided
herein, all Litigation Claims shall be transferred to the Liquidation Trust
pursuant to Section 6.1.5 of the Plan. In the event Allowed General Unsecured
Claims are not paid in full in Cash in accordance with subsection 5.2 of the
Plan, and instead, receive beneficial interests in the Liquidation Trust, the
Avoidance Actions as part of Litigation Claims, shall include the right to
Postpetition Date Cash Distributions and Prepetition Date Excess Cash
Distributions.





     
          
3. Discharge. All of the Debtors’ assets will be liquidated and the
proceeds of which will be distributed pursuant to this Plan. As such, no
assets are being retained by Debtors

45







Table of Contents


and the Debtors shall not receive a
discharge.





     
          
4. Injunction. From and after the Effective Date, and except as provided
in the Plan and the Confirmation Order, all entities that have held, currently
hold or may hold a Claim or other debt or liability or an Equity Security or
other right of an Equity Security holder that is terminated pursuant to the
terms of the Plan are permanently enjoined from taking any of the following
actions on account of any such Claims, debts or liabilities or terminated
Equity Security or rights: (i) commencing or continuing in any manner any
action or other proceeding against the Liquidation Trust or its respective
property; (ii) enforcing, attaching, collecting or recovering in any manner any
judgment, award, decree or order against the Liquidation Trust or its
respective property; (iii) creating, perfecting or enforcing any Lien or
encumbrance against the Liquidation Trust or its respective property; (iv)
asserting a setoff, right of subrogation or recoupment of any kind against any
debt, liability or obligation due to the Liquidation Trust or its respective
property; and (v) 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. By accepting distributions pursuant to the Plan,
each holder of an Allowed Claim receiving distributions pursuant to the Plan
will be deemed to have specifically consented to the injunction set forth in
this section.







	 

	B.

	 

	Exculpation and Limitation of Liability.




     
From and after the Effective Date, none of the Debtors, the
Liquidation Trust, or the Informal Committee nor any of their respective present or former
members, directors, officers, managers, employees, advisors, attorneys or
agents, shall have or incur any liability to any holder of a Claim or Equity
Security or any other party-in-interest, or any of their respective agents,
employees, representatives, financial advisors, attorneys or Affiliates, or any
of their successors or assigns, for any act or omission in connection with,
relating to, or arising out of, the Chapter 11 Cases, Liquidation Trust, 363
Motion, the pursuit of confirmation of the Plan or the consummation


46







Table of Contents



of the Plan, except for (i) under the Restructuring Agreement to the extent assumed
and assigned to the Liquidation Trust, (ii) violations of the Risk Management Contracts, (iii) gross negligence and
(iv) willful misconduct, and in all respects shall be entitled to reasonably
rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan or in the context of the Chapter 11 Cases. No
holder of a Claim or Equity Security, nor any other party-in-interest,
including their respective agents, employees, representatives, financial
advisors, attorneys or Affiliates, shall have any right of action against the
Debtors, the Liquidation Trust, the Informal Committee or any of their
respective present or former members, officers, directors, managers, employees,
advisors, attorneys or agents, for any act or omission in connection with,
relating to, or arising out of, the Chapter 11 Cases, the pursuit of
confirmation of the Plan, the consummation of the Plan or the administration of
the Plan, except for (i) their willful misconduct or gross negligence, (ii)
matters specifically contemplated by either the Plan or the Liquidation Trust
and (iii) any liability of an attorney to its client not subject to exculpation
under the Bankruptcy Code.







	 

	C.

	 

	Post Confirmation Reporting and Quarterly Fees to the United States
Trustee.




     
Prior to the Effective Date, Debtors, and after the
Effective Date the Liquidation Trust, are obligated to pay the United States Trustee quarterly
fees based upon all disbursements in accordance with the sliding scale set
forth in 28 U.S.C. §1930(a)(6). These fees accrue throughout the pendency of
the Chapter 11 Cases until entry of a final decree. United States Trustee fees
paid prior to confirmation of the Plan will be reported in operating reports
required by 11 U.S.C. §704(8), 1106(a)(1), 1107(a) and the United States
Trustee Guidelines. All United States Trustee quarterly fees accrued prior to
confirmation of the Plan will be paid on or before the Effective Date pursuant
to 11 U.S.C. §1129(a)(12). All United States Trustee fees accrued
post-confirmation will be timely paid on a calendar quarter basis and reported
both on post-confirmation reports required by Local Rule 3020 and in
post-confirmation operating reports required by the United States


47







Table of Contents


 Trustee
Guidelines. Final fees will be paid on or before the entry of a final decree
in these Chapter 11 Cases.







	XIII.

	 

	CERTAIN FEDERAL INCOME TAX CONSEQUENCES









	 

	A.

	 

	Introduction.




     
Implementation of the Plan may have federal, state, and local tax
consequences to the Debtors and to the holders of Allowed Claims, FGC Equity
Securities, and FSI Warrants. The following summary does not address the
federal income tax consequences to holders whose Allowed Claims are entitled to
reinstatement or payment in full in cash under the Plan (e.g., Priority Wage
Claims, Priority Benefit Plan Contribution Claims, Priority Customer Deposit
Claims, Miscellaneous Secured Claims and General Unsecured Claims).


     
NO TAX OPINION HAS BEEN SOUGHT OR WILL BE OBTAINED
WITH RESPECT TO ANY CONSEQUENCES OF THE PLAN. THE FOLLOWING DISCLOSURE (THE “TAX DISCLOSURE”) DOES
NOT CONSTITUTE AND IS NOT INTENDED TO CONSTITUTE EITHER A TAX OPINION OR TAX
ADVICE TO ANY PERSON. RATHER, THE TAX DISCLOSURE IS PROVIDED FOR INFORMATIONAL
PURPOSES ONLY.


     
The Tax Disclosure summarizes certain United States
federal income tax aspects of the Plan, assuming the Plan is implemented as described herein, and
does not attempt to comment on all such aspects. The Tax Disclosure does not
attempt to consider any facts or limitations applicable to any particular
holder of an Allowed Claim, FGC Equity Security or FSI Warrant which may modify
or alter the following discussion. The Tax Disclosure does not address state,
local, or foreign tax or any federal tax aspects of the Plan other than certain
federal income tax aspects.


48







Table of Contents


     
The Tax Disclosure is based upon the provisions of the
Internal Revenue Code of 1986, as amended (for purposes of this Tax Disclosure, the “IRC”). No
assurance can be given that legislative, judicial or administrative changes
will not be forthcoming that would affect the accuracy of the Tax Disclosure.
Any such changes could be material and could be retroactive with respect to the transactions entered into or completed
prior to the enactment or promulgation thereof. Finally, the federal income tax treatment of certain
aspects of the Plan may be uncertain due to a lack of applicable legal
authority and may be subject to judicial or administrative interpretations that
differ from the information discussed in the Tax Disclosure.


     
HOLDERS OF ALLOWED CLAIMS, FGC EQUITY SECURITIES
AND FSI WARRANTS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES
(INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES) TO THEM AND/OR
TO THE DEBTORS ARISING FROM THE TRANSACTIONS CONTEMPLATED BY THE PLAN.







	 

	B.

	 

	Tax Consequences To The Debtors.







     
          
1. Sale of Business Assets. The Restructuring Agreement requires the
closing of the sales of the assets of the Operating Companies prior to the
consummation of the Plan. Substantially all of the assets of the Operating
Companies are collateral for the Notes. On December 6, 2001, pursuant to the
Purchase Agreement, Majestic Investor acquired substantially all of the assets
of FLVI (including the FSELLC Membership Interest), FMI, and 101 Main in
exchange for $149,000,000.00 and the assumption by Majestic Investor of certain
liabilities of FLVI, FMI, and 101 Main. It is also contemplated by the
Restructuring Agreement, and assumed for purposes of this Tax Disclosure, that
the Debtors will sell, on a going concern basis, substantially all of the
assets of FRI, subject to the assumption of certain liabilities, to a
third-party buyer.


49







Table of Contents


     
The Debtors and certain FGC non-Debtor subsidiaries
(collectively, the “Group”) are consolidated for tax purposes. The Group will recognize gain or
loss on the required disposition of each of its assets. FGC believes that, in
the aggregate, the sale of the Group’s remaining assets will result in a net
taxable gain to the Group. Any such gain will be offset, in whole or in part,
by the Group’s net operating loss (“NOL”) carryforwards. As of December 31,
2001, the Group had combined NOL carryforwards of approximately $63 million. If the net
taxable gain resulting from the required dispositions of the Group’s assets
does not exceed the Group’s NOL carryforwards (including, for such purposes,
any NOL carryforwards attributable to taxable years ending after December 31,
2001), plus any NOLs generated in the year of such dispositions, the Group
would not incur a regular federal income tax liability as a result of such
dispositions.


     
In addition to the corporate income tax, the IRC
imposes an alternative minimum tax (“AMT”) on a corporation’s income at a twenty percent (20%) rate to
the extent, if any, that such tax exceeds the corporation’s regular corporate
income tax liability. Special NOL computation rules apply to corporate
taxpayers subject to the AMT. Generally, those rules provide that only ninety
percent (90%) of a corporation’s taxable income (as computed for AMT purposes)
may be offset by available NOL carryforwards (as computed for such purposes).
An exception to those rules was provided by the Job Creation and Worker
Assistance Act of 2002 (the “2002 JCA”). The 2002 JCA increases to 100% the
amount by which a corporation’s taxable income (as computed for AMT purposes)
may be offset by available NOL carryforwards (as computed for such purposes)
generated or carried forward into taxable years ending in 2001 or 2002.
Whether the Group will be subject to AMT on dispositions of remaining assets
thus depends on the timing of such dispositions. With respect to asset
dispositions after December 31, 2002, the exception provided by the 2002 JCA
would not apply and the general limitation discussed above may cause the Group
to be liable for AMT on a portion of any net taxable gain recognized.


50







Table of Contents





     
          
2. Cancellation of Debt. By operation of the Plan, the Allowed Claims
will either be satisfied, in full or in part, or extinguished for no
consideration. This section discusses the tax implications (for the Group)
arising from the treatment of Allowed Claims pursuant to the Plan.


     
          
     a) Discharge of Indebtedness Income.


     
          
          
i) In General. The IRC generally provides that a taxpayer
must include in gross income the amount of any income resulting from the cancellation or
discharge of indebtedness (“COD income”) during the taxable year. No COD
income results if payment of the discharged liability would have given rise to
a deduction.


     
          
          ii) Exception for Discharge in Title 11 Case.
Section 108(a)(1) of the IRC provides an exception to the general rule of income inclusion if a
discharge of indebtedness occurs in a title 11 case. For this purpose, a“title
 11 case” is defined as a case under title 11 of the United States Code
(relating to bankruptcy) if the taxpayer is under the jurisdiction of the
bankruptcy court in such case and the discharge of indebtedness is granted by
the court or is pursuant to a plan approved by the court.


     
          
          iii) Tax Attribute Reduction. To the extent section
108(a)(1) of the IRC applies to exclude COD income from gross income, a taxpayer is generally
required to reduce certain tax attributes. The following tax attributes are
reduced in the listed order of priority: (i) NOLs; (ii) general business
credits; (iii) minimum tax credits; (iv) capital loss carryovers; (v) tax basis
of assets; (vi) passive activity loss and credit carryovers; and (vii) foreign
tax credit carryovers. The tax attributes, other than credits, are generally
reduced by one dollar for each dollar of COD income excluded from gross income
under section 108(a)(1). Tax credit carryovers (i.e., general business
credits, minimum tax credits, passive activity loss credits, and foreign tax
credits) are reduced 33? cents for each dollar of COD income excluded from
gross income under section 108(a)(1) of the IRC.

51







Table of Contents


     
          
     b) Application to the Debtors. Pursuant to the Plan, the Debtors will
satisfy the Notes by distributing to the Indenture Trustee (for the benefit of
and distribution to the Noteholders): (i) the cash proceeds of the collateral
for the Notes; and (ii) Liquidation Trust Shares.


     
          
For federal income tax purposes, the Debtors will realize COD income to
the extent (and in the amount) that the principal amount of the debt discharged
exceeds the cash proceeds of the collateral for the Notes, plus the fair market value of the Liquidation Trust Shares
distributed to the holders of Allowed Claims. This COD income will be excluded
from the Group’s gross income as the discharge will be made in a title 11 case.
Under the general rule discussed above, FGC would be required to reduce
certain of its tax attributes by the amount of such COD income (in the order
and amounts discussed above), after the determination of taxable income or loss
for the taxable year of discharge. However, implementation of the Plan as
described herein would result in the liquidation of FGC for federal income tax
purposes. Assuming FGC is so liquidated, any remaining tax attributes (e.g.,
NOL carryforwards) would simply disappear.





     
          
3. Distribution of Liquidation Trust Shares. For federal income tax
purposes, as discussed below, the Debtors intend to treat each holder of an
Allowed Claim that receives Liquidation Trust Shares as if such holder received
its pro rata share of the assets (and any liabilities) to be held by the
Liquidation Trust (such assets and liabilities, the “Liquidation Trust
Property”). Simultaneous with such constructive transfer, each holder of an
Allowed Claim that receives Liquidation Trust Shares will be deemed to transfer
the Liquidation Trust Property deemed received from the Debtors to the
Liquidation Trust, with consequences discussed below.


     
          
For federal income tax purposes, the Debtors will recognize gain or loss,
if any, on the constructive transfer of Liquidation Trust Property to holders
of Allowed Claims. Taxable gain or loss for such purposes will generally be
computed as the difference between the fair market value and adjusted tax basis
of the Liquidation Trust Property. However, if any Liquidation Trust

52







Table of Contents



Property is subject to a liability, the fair market value of such Property will be
deemed to be the greater of fair market value or the amount of the associated
liability.







	 

	C.

	 

	Taxation of the Liquidation Trust







     
          
1. General. The Plan provides that on the Effective Date, FGC shall take
all other steps necessary to establish the Liquidation Trust. Treasury
Regulation Section 301.7701-4(d) provides that a trust will be considered a liquidating trust if: (i) it is
organized for the primary purpose of liquidating and distributing the assets
transferred to it; and (ii) its activities are all that is reasonably necessary
to, and consistent with, the accomplishment of that purpose. Although no
assurances can be provided, FGC believes that the Liquidation Trust will
qualify as a liquidating trust pursuant to Treasury Regulation Section
301.7701-4(d).





     
          
2. Holders of Liquidation Trust Shares. Because FGC believes that the
Liquidation Trust will qualify as a liquidating trust for federal income tax
purposes, FGC intends to treat the Liquidation Trust as a grantor trust for
such purposes.


     
The trustee of the Liquidation Trust will be required to:
(i) value any property transferred to the Liquidation Trust consistent with the valuation of
such property established by the holders of Allowed Claims; and (ii) employ
such value for all federal income tax purposes. Pursuant to the Plan and
Liquidation Trust Agreement, the trustee of the Liquidation Trust will be
required to file income tax returns for the Liquidation Trust as a grantor
trust.


     
Each holder of an Allowed Claim that receives and
holds Liquidation Trust Shares will be treated as a beneficiary of the Liquidation Trust, subject to
taxation under section 671 of the IRC. Each holder of Liquidation Trust
Shares, as a beneficiary of a grantor trust, will be subject to current
taxation on the income, if any, generated by the Liquidation Trust. There is a
risk that cash distributions from the Liquidation Trust during a taxable year
may be insufficient to offset the


53







Table of Contents


income taxes, if any, resulting from a
beneficiary’s distributive share of any income generated by the Liquidation
Trust during such year.







	 

	D.

	 

	Tax Consequences to Creditors.







     
          
1. General. Each holder of an Allowed Claim will recognize gain or loss
on the actual or constructive exchange of such holder’s existing Allowed Claim
(other than an Allowed Claim for accrued interest, as discussed below) for: (i)
the cash proceeds of the collateral for the Notes; and (ii) the Liquidation Trust Property deemed received by
such holder and deemed contributed to the Liquidation Trust (as discussed below).


For such purposes, gain will be recognized if the amount of cash actually
received, and the fair market value of the Liquidation Trust Property deemed
received by a holder, exceeds such holder’s adjusted tax basis in its Allowed
Claim. Loss will be recognized if a holder’s adjusted tax basis in its Allowed
Claim exceeds the amount of cash actually received, and the fair market value
of the Liquidation Trust Property deemed received by the holder. The tax basis
of a holder’s Liquidation Trust Shares received pursuant to the Plan of
Reorganization will be equal to the fair market value of the Liquidation Trust
Property deemed distributed to the holder (as discussed below).





     
          
2. Receipt of Liquidating Trust Shares. For federal income tax purposes,
FGC intends to treat each holder of an Allowed Claim that receives Liquidation
Trust Shares as if such holder received its pro rata share of the Liquidation
Trust Property and transferred such Property to the Liquidation Trust. This
characterization applies only to property that is directly transferred by FGC
to the Liquidation Trust and does not apply to property that is directly
transferred by FGC to holders of Allowed Claims.





     
          
3. Treatment of Accrued Interest. Income attributable to accrued but
unpaid interest will be treated as ordinary income regardless of whether a
holder’s existing Allowed Claim

54







Table of Contents


is a capital asset in its hands. If a holder
of an existing Allowed Claim
was not required to include in income accrued but
unpaid interest attributable to such Allowed Claim, and exchanges or is deemed
to exchange its Allowed Claim (including the portion reflecting accrued but
unpaid interest) for cash or Liquidation Trust Property pursuant to the Plan,
such holder will be treated as receiving ordinary income to the extent that any
consideration so received is allocable to the accrued interest. The foregoing
rule will apply regardless of whether such holder realizes an overall gain or
loss as a result of the exchange of its Allowed Claim. A holder that included
in income accrued but unpaid interest attributable to its existing Allowed Claim will recognize a loss to the
extent the accrued but unpaid interest is not fully satisfied.


     
Each Noteholder is urged to consult its tax advisor
regarding the allocation of consideration it receives pursuant to the Plan of Reorganization,
and the deductibility of any unpaid interest or amortized original issue
discount (“OID”) for tax purposes.





     
          
4. Character of Gain or Loss Recognized.


     
          
     a. In General. The character of the gain or loss recognized by each
Noteholder will depend upon the nature of the Noteholder’s Allowed Claim. Gain
or loss recognized by a Noteholder in whose hands the Allowed Claim constitutes
a capital asset will be characterized as capital gain or capital loss, except
to the extent of property received that is attributable to interest (including
accrued market discount, if any).


     
          
     b. Treatment of Market Discount. Section 1276 of the IRC provides that
any gain recognized upon the disposition of certain debt instruments will be
treated as ordinary income to the extent of accrued market discount, computed
either under the constant interest rate or ratable accrual method. A debt
instrument acquired after its original issuance for an amount lower than the
sum of: (i) the issue price of the debt instrument; and (ii) the aggregate
amount of OID includible in gross income of all holders for periods before the
acquisition of the debt instrument by

55







Table of Contents


the taxpayer has been acquired at a
market discount (e.g., because interest rates have risen since the original
issue date). A debt instrument acquired at its original issuance is generally
not treated as acquired at a market discount unless: (i) the tax basis in the
debt instrument is determined under section 1012 of the IRC and is less than
the issue price of the debt instrument; or (ii) the debt instrument was issued
pursuant to a plan of reorganization in exchange for another debt instrument
having market discount.





     
          
5. Long-term vs. Short-term Gains and Losses. In general, any capital
gains or losses recognized by a holder of an Allowed Claim or FGC Equity
Security will be classified as short-term capital gains or losses if the capital gains or losses are
attributable to assets held for not more than one year. Conversely, any
capital gains or losses recognized by a holder of an Allowed Claim or FGC
Equity Security will be classified as long-term capital gains or losses if the
capital gains or losses are attributable to assets held for more than one year.





     
          
6. Withholding. The Disbursing Agent will withhold any amounts required
by law from payments made to Noteholders. This may require payments by certain
Noteholders of the required withholding tax with respect to the non-cash
consideration issued under the Plan. In addition, Noteholders may be required
to provide general tax information to the Disbursing Agent.







	 

	E.

	 

	Tax Consequences To Holders Of FGC Equity Securities.







     
          
1. Old FGC Common Stock. By operation of the Plan, the Old FGC Common
Stock will be cancelled. Holders of the Old FGC Common Stock will not receive
any consideration for their cancelled stock. If the holders of Old FGC Common
Stock hold the stock as a capital asset, the holders should, on the Effective
Date, recognize a capital loss equal to their adjusted tax basis in the Old FGC
Common Stock.





     
          
2. Old FGC Preferred Stock. By operation of the Plan, the Old FGC
Preferred Stock will be cancelled. Holders of the Old FGC Preferred Stock will
not receive any consideration

56







Table of Contents


for their cancelled stock. If the holders of the
Old FGC Preferred Stock hold the stock as a capital asset, the holders should,
on the Effective Date, recognize a capital loss equal to their adjusted tax
basis in the Old FGC Preferred Stock.





     
          
3. Subsidiary Equity Securities. By operation of the Plan, Subsidiary
Equity Securities will be cancelled. Holders of the Subsidiary Equity
Securities will not receive any consideration for their cancelled securities.
If the holders of Subsidiary Equity Securities hold such stock as a capital
asset, the holders should recognize on the Effective Date a loss equal to their
adjusted tax basis in the Subsidiary Equity Securities.





     
          
4. FSI Warrant Claims. By operation of the Plan, the FSI Warrants will be
cancelled. Holders of the FSI Warrants will not receive any consideration for
their cancelled warrants. If the holders of the FSI Warrants hold such
warrants as a capital asset, the holders should, on the Effective Date,
recognize a capital loss equal to their adjusted tax basis in the FSI Warrants.







	XIV.

	 

	SECURITIES LAW CONSIDERATION









	 

	A.

	 

	Exemptions from Registration.







     
          
1. Securities Act of 1933, As Amended (the “1933 Act”). The Confirmation
Order will authorize the issuance of the Liquidation Trust Shares to the
Noteholders on account of their Allowed Noteholder Deficiency Claims and to
members of Senior Management to the extent of their entitlement under the
Restructuring Agreement and the Compensation Order. Such issuance will be
without registration under the 1933 Act or under state securities laws in
reliance on the exemption set forth in Section 1145 of the Bankruptcy Code
(“Section 1145”). The Confirmation Order will include provisions to the effect
that such exemption is available for the issuance of the Liquidation Trust
Shares and that the Liquidation Trust is a “successor” to FGC within the
meaning of Section 1145.

57







Table of Contents



     
Under Section 1145, the issuance of the Liquidation
Trust Shares will be exempt from registration under the 1933 Act if the following three requirements
are satisfied: (a) the securities must be issued by a debtor (or its
successor) under a plan of reorganization; (b) each recipient of the securities
must hold a claim against the debtor or an affiliate, an interest in the debtor
or an affiliate, or a claim for an administrative expense against the debtor or
an affiliate; and (c) the securities must be issued in exchange for the
recipient’s claim against or interest in the debtor or an affiliate, or
principally in such exchange and partly for cash or other property. The
Debtors believe that the issuance of the Liquidation Trust Shares will satisfy
all three requirements because (a) the Liquidation Trust will be a successor to
the Debtors due to its acquisition of the Debtors’ assets; (b) the recipients
of the Liquidation Trust Shares will be holders of claims against the Debtors;
and (c) the recipients of the Liquidation Trust Shares will receive those
securities principally in exchange for their claims against the Debtors.





     
     
     
2. Securities Exchange Act of 1934, As Amended (the “1934 Act”). Based on
the anticipated number of record owners of Liquidation Trust Shares as of the
Effective Date, the Debtors believe that the Liquidation Trust will not have to
be subject to the registration or reporting requirements of the 1934 Act (“1934
Act Reporting”). However, the Debtors do not know if the Liquidation Trust
will choose to be subject to 1934 Act Reporting notwithstanding the absence of
a legal requirement to do so. If it so chooses, then it would be subject to a
continuing public reporting process, requiring annual reports with audited
financial statements, quarterly reports and other periodic reports to be filed
with the SEC. Additionally, if the Liquidation Trust chooses to be subject to
1934 Act Reporting, then (i) the solicitation of votes of holders of the
Liquidation Trust Shares may also be subject to the proxy requirements of
Section 14 of the 1934 Act and (ii) Section 16 of the 1934 Act, which imposes
certain short-swing liability and reporting obligations in

58







Table of Contents


connection with purchases and sales of securities, and the beneficial
ownership reporting provisions of Section 13(d) of the 1934 Act may be
applicable to certain holders of Liquidation Trust Shares.





     
     
     
3. Trust Indenture Act of 1939, As Amended (the “TIA”). The Debtors
believe that the Liquidation Trust will not be subject to the TIA with respect
to the creation of interests in the Liquidation Trust and the issuance of the
Liquidation Trust Shares. Among other reasons, this is because the interests
in the Liquidation Trust will not constitute unconditional obligations founded
upon a contractual obligation to pay a sum certain, but rather only the right
to receive a portion of the proceeds ultimately distributed by the Liquidation
Trust upon liquidation of its assets.





     
     
     
4. Investment Company Act of 1940, As Amended (the “1940 Act”). The
Debtors believe that the Liquidation Trust will not have to register under the
1940 Act. Among other reasons, this is because the issuance of the Liquidation
Trust Shares will be merely incidental to the liquidation and dissolution of
FGC and the Liquidation Trust (i) will exist solely to liquidate the assets of
FGC, (ii) will not hold itself out as an investment company or conduct a trade
or business, (iii) will terminate within three years after the Effective Date
and (iv) will be under the jurisdiction of the Bankruptcy Court. Further, the
Debtors do not contemplate that an active trading market for the Liquidation
Trust Shares will develop nor do they contemplate that the Liquidation Trust or
the Liquidation Trust Board of Managers will take affirmative action to
facilitate such trading.







	 

	B.

	 

	Restrictions on Transfer.




     
In general, the Liquidation Trust Shares may be resold by
any person receiving them under the Plan without registration under the 1933 Act or under
state securities laws, except by a person who is deemed an “underwriter” with
respect to such securities. Paragraph (b) of Section 1145 (“Section 1145(b)”)
defines underwriter as a person or entity who (i) purchases a claim against or
equity interest in a debtor with a view to the distribution of the securities
received on account of


59







Table of Contents


 such claim or equity interest; (ii) offers to sell such
securities on behalf of the holders thereof (except offers to sell fractional
interests); (iii) offers to buy such securities from the holders if such
offer to buy is with a view to the distribution thereof pursuant to an
agreement made in connection with a plan, the consummation of a plan or the
offer or sale of securities under a plan; or (iv) is an “issuer” with respect
to the securities received, as that term is defined in Section 2(11) of the
1933 Act. In this context, an “issuer” of Liquidation Trust Shares would be
any person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the Liquidation Trust.


     
Whether a person is an “issuer” and, therefore,
an “underwriter” for purposes of Section 1145(b) will depend on a number of factors, including the
relative size of the person’s interest in the Liquidation Trust; the
distribution and concentration of other interests in the Liquidation Trust; the
contractual or other relationships giving that person direct or indirect power
over management policies and decisions of the Liquidation Trust; and whether
the person actually has such power notwithstanding the absence of formal
indicia of control. Members of the Liquidation Trust Board of Managers might,
under all relevant facts and circumstances, be viewed as issuers and,
therefore, as underwriters for purposes of Section 1145(b).


     
Based on the published views of the SEC or its staff,
the Debtors believe that a person who acquires less than one percent (1%) of a class of securities
generally would not, by virtue of such acquisition, be deemed an underwriter
with respect to those securities. The legislative history of Section 1145
suggests that a creditor who owns at least ten percent (10%) of the securities
of a reorganized debtor may be presumed to be a “control person” and,
therefore, an underwriter. These published views and legislative history do
not provide sufficient guidance on whether a person who receives more than one
percent (1%) but less than ten percent (10%) of the securities of a reorganized
debtor would be deemed an underwriter.


60







Table of Contents


     
Persons who are underwriters, as described above, and who
want to resell their securities must either have the securities registered for resale or use
an available exemption from registration. The Debtors have no plans to register under the 1933 Act any of the
Liquidation Trust Shares to be distributed under the Plan nor are the Debtors
aware of any plans for the Liquidation Trust to take such action. Accordingly,
persons who are underwriters will be able to resell such securities only in
limited circumstances in reliance on an exemption from the 1933 Act
registration requirements, certain of which are discussed below in this
Section, and in compliance with applicable state securities laws.


     
Persons who are underwriters but are not “affiliates”
(as defined in the next paragraph) of the Liquidation Trust may be eligible, without registration
under the 1933 Act or state securities laws, to resell the Liquidation Trust
Shares in “ordinary trading transactions” (within the meaning of Section
1145(b)). The Bankruptcy Code does not define “ordinary trading transactions”
and the SEC has not given definitive guidance on the proper construction of
that term. In no-action letters, however, the staff of the SEC has expressed
no objection to the view that a transaction will be an “ordinary trading
transaction” if (i) it is carried out on an exchange or in the over-the-counter
market and the issuer of the traded securities is subject to the reporting
requirements of the 1934 Act Reporting, and (ii) such transaction does not
involve concerted action by recipients (or their distributors) to sell such
securities, the preparation or use of informational documents, or the payment
of special compensation to brokers or dealers in connection with such sale.
The Debtors, however, believe that as of the Effective Date, the Liquidation
Trust will not have to be subject to 1934 Act Reporting and they do not know if
the Liquidation Trust will choose to be subject to 1934 Act Reporting even
though not legally required to do so. Therefore, underwriters may be unable to
rely on the “ordinary trading transactions” provision of Section 1145(b) for
resales of Liquidation Trust Shares.


61







Table of Contents


     
Also, based on the position taken by the staff of the
SEC in no-action letters, recipients of Liquidation Trust Shares who are affiliates of the
issuer would be eligible to resell those securities (if not registered) under
Rule 144 under the 1933 Act (“Rule 144”), as Rule 144 applies to sales by
affiliates of securities which are not restricted securities. Under Rule 144,
an “affiliate” of an issuer of securities is a person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such issuer. This definition of “affiliate” is essentially the same as the
definition of “issuer,” as the latter term is used in the definition of“
 underwriter” in Section 1145(b), as discussed above.


     
In the context of securities which (i) were issued
pursuant to the Section 1145 exemption from securities law registration and (ii) are held by affiliates
of the issuer, Rule 144 provides that if certain conditions are met, including
volume limitations, manner of sale and availability of current information
about the issuer, affiliates of the issuer may resell their securities without
registration.


     
Broker-dealers effecting sales of Liquidation Trust
Shares distributed under the Plan will have an obligation under paragraph (a)(4) of Section 1145
for a period of 40 days after the distribution to provide purchasers of such
securities with a copy of this Disclosure Statement (and any supplements
thereto, if ordered by the Bankruptcy Court) at or before the time of delivery
of such securities.


     
THE FOREGOING SUMMARY IS GENERAL IN NATURE AND HAS
BEEN INCLUDED IN THIS DISCLOSURE STATEMENT SOLELY FOR GENERAL INFORMATIONAL PURPOSES. THE DEBTORS
MAKE NO REPRESENTATIONS CONCERNING, AND ARE NOT PROVIDING ANY OPINION OR ADVICE
WITH RESPECT TO, THE SECURITIES LAW MATTERS DESCRIBED ABOVE AS THEY APPLY TO
ANY PARTICULAR PERSON RECEIVING SECURITIES UNDER THE PLAN OR AS THEY APPLY
UNDER ANY INDIVIDUAL CIRCUMSTANCES. IN LIGHT OF THE COMPLEXITY AND
SUBJECTIVITY INVOLVED IN DETERMINING WHETHER A PARTICULAR HOLDER OF SECURITIES
DESCRIBED HEREIN MAY BE DEEMED AN “UNDERWRITER,” “AFFILIATE” OR “CONTROL
PERSON” UNDER THE LAWS AND REGULATIONS DISCUSSED ABOVE AND, CONSEQUENTLY, THE
UNCERTAINTIES CONCERNING THE AVAILABILITY OF EXEMPTIONS FROM SECURITIES LAW
REGISTRATION IN CONNECTION WITH RESALES OR OTHER DISPOSITIONS OF THOSE


62







Table of Contents



SECURITIES, THE DEBTORS URGE EACH CLAIMANT TO CONSIDER CAREFULLY AND CONSULT
WITH HIS, HER, OR ITS OWN LEGAL ADVISERS WITH RESPECT TO THOSE (AND ANY
RELATED) MATTERS.


     
FURTHERMORE, ALTHOUGH THE DEBTORS HAVE EXPRESSED
CERTAIN VIEWS HEREIN ON THE LIKELY STATUS UNDER THE SECURITIES LAWS OF THE LIQUIDATION TRUST AND THE
LIQUIDATION TRUST SHARES, IT IS THE LIQUIDATION TRUST (WHICH IS NOT A DEBTOR)
OR IN SOME SITUATIONS THE HOLDER OF LIQUIDATION TRUST SHARES THAT WILL BEAR THE
ULTIMATE RESPONSIBILITY FOR DETERMINING SUCH STATUS AND COMPLYING WITH THE APPLICABLE SECURITIES LAWS. THE DEBTORS DO NOT KNOW
WHAT POSITION THE LIQUIDATION TRUST WILL TAKE ON ANY RELEVANT SECURITIES LAW
ISSUES.


     
THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED
BY THE SEC NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS
CONTAINED HEREIN.







	XV.

	 

	GAMING REGULATION AND LICENSING




     
As previously set forth, the Plan provides for
the liquidation of the Operating Companies and the total cessation of gaming activities by the
Debtors. The Debtors, through the Operating Companies, conducted business in
multiple jurisdictions, each with their own regulatory requirements. Because
the nature and structure of the purchaser of the remaining hotel/casino,
Fitzgeralds Reno, is unknown at this time, the following is a general overview
of gaming regulation and licensing in Nevada. Since the Effective Date of the
Plan is conditioned upon the closing of sales of the Operating Companies, this
overview will not be applicable to the Liquidation Trust since it will not have
any gaming activities.


     
The ownership and operation of casino gaming facilities
in Nevada are subject to the Nevada Gaming Control Act and the regulations promulgated
thereunder (the “Nevada Act”) and to the licensing and regulatory control of
the Nevada Gaming Commission (the “Nevada Commission”), the Nevada State Gaming
Control Board (the “Nevada Board”) and various local ordinances and
regulations, including, without limitation, applicable city and county gaming
and liquor licensing authorities (collectively, the “Nevada Gaming
Authorities”).


63







Table of Contents


     
The laws, regulations and supervisory procedures of
the Nevada Gaming Authorities are based upon declarations of public policy which are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and
the safeguarding of assets and revenues, providing reliable record keeping and
filing periodic reports with the Nevada Gaming Authorities; (iv) the prevention
of cheating and fraudulent practices; and (v) providing a source of state and
local revenues through taxation and licensing fees. Change in such laws,
regulations and procedures could have an adverse effect on the Company’s gaming
operations.


     
In regard to a proposed purchase of Fitzgeralds Reno
(“Nevada Gaming Subsidiary”), the proposed purchasing company (the “Purchaser”) and its direct
and indirect subsidiaries that would conduct gaming operations are required to
be licensed by the Nevada Gaming Authorities. The gaming licenses require the
periodic payment of fees and taxes and are not transferable. No person may
become a stockholder of, or receive any percentage of profits from the
Purchaser or a Nevada Gaming Subsidiary without first obtaining licenses and
approvals from the Nevada Gaming Authorities.


     
The Nevada Gaming Authorities may investigate any
individual who has a material relationship to, or material involvement with, the Purchaser, an
intermediary company or a Nevada Gaming Subsidiary in order to determine
whether such individual is suitable or should be licensed as a business
associate of a gaming licensee. Officers, directors and certain key employees
of a Nevada Gaming Subsidiary must file applications with the Nevada Gaming
Authorities and may be required to be licensed or found suitable by the Nevada
Gaming Authorities. Officers, directors and

64







Table of Contents



key employees of the Purchaser and
any intermediary company which is actively and directly involved in gaming
activities of a Nevada Gaming Subsidiary may be required to be licensed or
found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities
may deny an application for licensing for any cause which they deem reasonable.
A finding of suitability is comparable to licensing, and both require
submission of detailed personal and financial information followed by a
thorough investigation. The applicant for licensing or a finding of suitability
must pay all the costs of the investigation. Changes in licensed positions must
be reported to the Nevada Gaming Authorities and, in addition to their authority to deny an application for
a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a
change in a corporate position.


     
If the Nevada Gaming Authorities were to find an officer,
director or key employee unsuitable for licensing or unsuitable to continue having a
relationship with the Purchaser, an intermediary company or the Nevada Gaming
Subsidiary, the companies involved would have to sever all relationships with
such person. In addition, the Nevada Commission may require the Purchaser, any
intermediary company or the Nevada Gaming Subsidiary to terminate the
employment of any person who refuses to file appropriate applications.
Determinations of suitability or of questions pertaining to licensing are not
subject to judicial review in Nevada.


     
The Purchaser, any intermediary company and the
Nevada Gaming Subsidiary are required periodically to submit detailed financial and operating reports to
the Nevada Commission and furnish any other information which the Nevada
Commission may require. Substantially all material loans, leases, sales of
securities and similar financing transactions by a Nevada Gaming Subsidiary
must be reported to or approved by the Nevada Commission.


     
If it were determined that the Nevada Act was violated
by the Purchaser, any intermediary company or a Nevada Gaming Subsidiary, any registration or
gaming licenses they hold could be


65







Table of Contents


limited, conditioned, suspended or revoked,
subject to compliance with certain statutory and regulatory procedures. In
addition, the Purchaser, any intermediary company, the Nevada Gaming Subsidiary
and the persons involved could be subject to substantial fines for each
separate violation of the Nevada Act at the discretion of the Nevada
Commission. Further, a supervisor could be appointed by the Nevada Commission
to operate a Nevada Gaming Subsidiary and, under certain circumstances,
earnings generated during the supervisor’s appointment (except for reasonable
rental value of the casino) could be forfeited to the State of Nevada.


     
In the event that the proposed purchaser is a
publicly-traded corporation that would be required to be registered under the Nevada Act (“Registered Corporation”),
any beneficial holder of a Registered Corporation’s voting securities (or
rights to acquire such securities), regardless of the number of shares owned,
may be required to file an application, be investigated and have its
suitability as a beneficial holder of the Registered Corporation’s voting
securities determined if the Nevada Commission has reason to believe that such
ownership would otherwise be inconsistent with the declared policies of the
State of Nevada. The applicant must pay all costs of investigation incurred by
the Nevada Gaming Authorities in conducting any such investigation.


     
The Nevada Act requires any person who acquires
beneficial ownership of more than five percent (5%) of a Registered Corporation’s voting securities to
report the acquisition to the Nevada Commission. The Nevada Act requires that
beneficial owners of more than ten percent (10%) of the voting securities of a
Registered Corporation apply to the Nevada Commission for a finding of
suitability within thirty days after the Chairman of the Nevada Board mails the
written notice requiring such filing. Under certain circumstances, an“
 institutional investor,” as defined in the Nevada Act, which acquires more
than ten percent (10%), but not more than fifteen percent (15%), of a
Registered Corporation’s voting securities may apply to the Nevada Commission
for a waiver of such finding of suitability if such institutional investor
holds the voting securities for “investment


66







Table of Contents


purposes only.” An institutional
investor shall not be deemed to hold voting securities for investment purposes
unless the voting securities were acquired and are held in the ordinary course
of business as an institutional investor and not for the purpose of causing,
directly or indirectly, the election of a majority of the members of the board
of directors of the Registered Corporation, any change in the corporate
charter, bylaws, management, policies or operations of the Registered
Corporation, or any of its gaming affiliates, or any other action which the
Nevada Commission finds to be inconsistent with holding the Registered
Corporation’s voting securities for investment purposes only. Activities which
are not deemed to be inconsistent with holding voting securities for investment
purposes only include: (i) voting on all matters voted on by stockholders; (ii) making financial and
other inquiries of management of the type normally made by securities’ analysts
for informational purposes and not to cause a change in its management,
policies or operations; and (iii) such other activities as the Nevada
Commission may determine to be consistent with such investment intent. If the
beneficial holder of voting securities who must be found suitable is a
corporation, partnership or trust, it must submit detailed business and
financial information, including a list of beneficial owners. The applicant is
required to pay all costs of investigation. Under certain circumstances, the
Nevada Commission may find that an entity qualifies as an “institutional
investor” even if the interest held is not in a publicly registered company.
However, the same maximum investment of fifteen percent (15%) of the equity
would remain.


     
Any person who fails or refuses to apply for a finding
of suitability or a license within 30 days after being ordered to do so by the Nevada Commission or
the Chairman of the Nevada Board, may be found unsuitable. The same
restrictions apply to a record owner if the record owner, after request, fails
to identify the beneficial owner. Any stockholder found unsuitable and who
holds, directly or indirectly, any beneficial ownership of the voting
securities of a Registered Corporation beyond such period of time as may be
prescribed by the Nevada Commission may be guilty of a


67







Table of Contents


criminal offense. The
Purchaser will be subject to disciplinary action if, after it receives notice
that a person is unsuitable to be a stockholder or to have any other
relationship with the Purchaser, any intermediary company, or the Nevada Gaming
Subsidiary, the Purchaser (i) pays that person any dividend or interest upon
voting securities of the Purchaser, (ii) allows that person to exercise,
directly or indirectly, any voting right conferred through securities held by
that person, (iii) pays remuneration in any form to that person for services
rendered or otherwise, or (iv) fails to pursue all lawful efforts to require
such unsuitable person to relinquish his voting securities including, if
necessary, the immediate purchase of said voting securities for cash at fair
market value. Additionally, the City of Reno, would have the authority to
approve all persons owning or controlling the stock of any corporation
controlling a gaming licensee.


     
The Nevada Commission may, in its discretion, require
the holder of any debt or similar security of a Registered Corporation, such as the Notes, to
file applications, be investigated and be found suitable to own the debt
security of a Registered Corporation if the Nevada Commission has reason to
believe that such ownership would otherwise be inconsistent with the declared
policies of the State of Nevada. If the Nevada Commission determines that a
person is unsuitable to own such security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including the loss of its approvals,
if without the prior approval of the Nevada Commission, it: (i) pays to the
unsuitable person any dividend, interest, or any distribution whatsoever; (ii)
recognizes any voting right by such unsuitable person in connection with such
securities; (iii) pays the unsuitable person remuneration in any form; or (iv)
makes any payment to the unsuitable person by way of principal, redemption,
conversion, exchange, liquidation, or similar transaction. In addition, the
Purchaser has the right to require a holder of Notes who fails to apply for a
license or a finding of suitability as required by any Nevada Gaming Authority
to dispose of its Notes or to redeem such notes.


68







Table of Contents


     
The Purchaser and the Nevada Gaming Subsidiary would
be required to maintain a current stock ledger in Nevada, which may be examined by the Nevada
Gaming Authorities at any time. If any securities are held in trust by an agent
or by a nominee, the record holder may be required to disclose the identity of
the beneficial owner to the Nevada Gaming Authorities. A failure to make such
disclosure may be grounds for finding the record holder unsuitable. The
Purchaser will also be required to render maximum assistance in determining the
identity of the beneficial owner. The Nevada Commission has the power to
require the Purchaser’s stock certificates to bear a legend indicating that the
securities are subject to the Nevada Act.


     
The Purchaser may not make a public offering of
its securities without the prior approval of the Nevada Commission if the securities or proceeds therefrom
are intended to be used to construct, acquire or finance gaming facilities in
Nevada, or to retire or extend obligations incurred for such purposes. The
pledge of the equity securities of a Corporate Licensee or an entity that is
registered as an intermediary company (“Stock Pledges”) also requires the prior
approval of the Nevada Commission. In addition, restrictions on the transfer of
an equity security issued by a corporate licensee or intermediary company and
agreements not to encumber such securities (collectively, “Stock Restrictions”)
are ineffective without the prior approval of the Nevada Commission.


     
Changes in control of a Registered
Corporation through merger, consolidation, stock or asset acquisitions, management or consulting
agreements, or any act or conduct by a person whereby he obtains control, may
not occur without the prior approval of the Nevada Commission. Entities seeking
to acquire control of a Registered Corporation must satisfy the Nevada Board
and Nevada Commission in a variety of stringent standards prior to assuming
control of such Registered Corporation. The Nevada Commission may also require
controlling stockholders, officers, directors and other persons having a
material relationship or involvement with the entity proposing to acquire
control, to be investigated and licensed as part of the approval process
relating to the transaction.


69







Table of Contents


     
The Nevada legislature has declared that some
corporate acquisitions opposed by management, repurchases of voting securities and corporate defense
tactics affecting Nevada corporate gaming licensees, and Registered
Corporations that are affiliated with those operations, may be injurious to
stable and productive corporate gaming. The Nevada Commission has established a
regulatory scheme to ameliorate the potentially adverse effects of these
business practices upon Nevada’s gaming industry and to further Nevada’s policy
to: (i) assure the financial stability of corporate gaming licensees and their
affiliates; (ii) preserve the beneficial aspects of conducting business in the
corporate form; and (iii) promote a neutral environment for the orderly
governance of corporate affairs. Approvals are, in certain circumstances,
required from the Nevada Commission before the Registered Corporation can make
exceptional repurchases of voting securities above the current market price
thereof and before a corporate acquisition opposed by management can be
consummated. The Nevada Act also requires prior approval of a plan of
recapitalization proposed by the Registered Corporation’s Board of Directors in
response to a tender offer made directly to the Registered Corporation’s
stockholders for the purposes of acquiring control of the Registered
Corporation.


     
License fees and taxes, computed in various ways
depending on the type of gaming or activity involved, are payable to the State of Nevada and to the
counties and cities in which the Nevada licensee’s respective operations are
conducted. Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are based upon
either: (i) a percentage of the gross revenues received; (ii) the number of
gaming devices operated; or (iii) the number of table games operated. A casino
entertainment tax is also paid by casino operations where entertainment is
furnished in connection with the serving or selling of food or refreshments or
the selling of any merchandise. Nevada licensees that hold a manufacturer’s
license or a distributor’s license also pay certain fees and taxes to the State
of Nevada.


70







Table of Contents


     
Any person who is licensed, required to be licensed,
registered, required to be registered, or is under common control with such
persons (collectively,“Licensees”), and
 who proposes to become involved in a gaming venture outside of Nevada, is
required to deposit with the Nevada Board, and thereafter maintain, a revolving
fund in the amount of $10,000 to pay the expenses of investigation by the
Nevada Board of their participation in such foreign gaming. The revolving fund
is subject to increase or decrease in the discretion of the Nevada Commission.
Thereafter, foreign Licensees are required to comply with certain reporting
requirements imposed by the Nevada Act. Such Licensees are also subject to
disciplinary action by the Nevada Commission if they knowingly violate any laws
of the foreign jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the standards of
honesty and integrity required of Nevada gaming operations, engage in
activities or enter into associations that are harmful to the State of Nevada
or its ability to collect gaming taxes and fees, or employ, contract or
associate with a person in the foreign operation who has been denied a license
or finding of suitability in Nevada on the grounds of personal unsuitability.


     
The sale of alcoholic beverages is subject to licensing,
control and regulation by City of Reno. All such licenses are revocable and are not
transferable. The agencies involved have full power to limit, condition,
suspend or revoke any such license.







	XVI.

	 

	CONFIRMATION OF THE PLAN









	 

	A.

	 

	Confirmation of the Plan.




     
Pursuant to Section 1128(a) of the Bankruptcy Code,
the Bankruptcy Court will hold a hearing regarding confirmation of the Plan at the United States
Bankruptcy Court, 300 Booth Street, Reno, Nevada 89509, commencing on February
10, 2003 at 2:00 p.m. PST.







	 

	B.

	 

	Objections to Confirmation of the Plan.




     
Section 1128(b) provides that any party-in-interest
may object to confirmation of a plan. Any objections to confirmation of the Plan must be in
writing, must state with specificity the


71







Table of Contents


 grounds for any such objections and
must be filed with the Bankruptcy Court and served upon the following parties so as to be received on or before the time
fixed by the Bankruptcy Court:



	 
	Counsel for the Debtors:

Gordon & Silver, Ltd.

3960 Howard Hughes Parkway, 9th Floor

Las Vegas, Nevada 89109

Telephone: 702-796-5555

Facsimile: 702-369-2666

Attn: Gerald M. Gordon, Esq





     
For the Plan to be confirmed, the Plan must satisfy
the requirements stated in Section 1129 of the Bankruptcy Code. In this regard, the Plan must
satisfy, among other things, the following requirements.





     
     
     
1. Best Interest of Creditors and Liquidation Analysis. Pursuant to
Section 1129(a)(7) of the Bankruptcy Code, for the Plan to be confirmed, it
must provide that Creditors and holders of Equity Securities will receive at
least as much under the Plan as they would receive in a liquidation of the
Debtors under Chapter 7 of the Bankruptcy Code (the “Best Interest Test”). The
Best Interest Test with respect to each impaired Class requires that each
holder of a Claim or Equity Security of such Class either: (i) accepts the
Plan; or (ii) receives or retains under the Plan property of a value, as of the
Effective Date, that is not less than the value such holder would receive or
retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code.
The Bankruptcy Court will determine whether the value received under the Plan
by the holders of Claims in each Class of Creditors or Equity Securities equals
or exceeds the value that would be allocated to such holders in a liquidation
under Chapter 7 of the Bankruptcy Code. The Debtors believe that the Plan meets
the Best Interest Test and provides value which is not less than that which
would be recovered by each such holder in a Chapter 7 bankruptcy proceeding.


     
Generally, to determine what Creditors and holders of
Equity Securities in each impaired Class would receive if the Debtors were liquidated, the
Bankruptcy Court must determine what


72







Table of Contents


 funds would be generated from the
liquidation of the Debtors’ assets and properties in the context of a Chapter 7
liquidation case, which for Unsecured Creditors would consist of the
proceeds resulting from the disposition of the unsecured assets of the Debtors,
augmented by the unencumbered Cash held by the Debtors at the time of the
commencement of the liquidation case. Such Cash amounts would be reduced by
the costs and expenses of the liquidation and by such additional Administrative
Claims and Priority Claims as may result from the termination of the Debtors’
businesses and the use of Chapter 7 for the purpose of liquidation.


     
The Debtors’ costs of liquidation under Chapter 7
would include the fees payable to a trustee in bankruptcy, as well as those which might be payable to
additional attorneys and other professionals that such trustee might engage,
plus any unpaid expenses incurred by the Debtors during the Chapter 11 Cases,
such as compensation for attorneys, financial advisors and accountants and
costs and expenses of members of any committees that are allowed in a Chapter 7
case. In addition, Claims would arise by reason of the breach or rejection of
obligations incurred and executory contracts entered into by the Debtors during
the pendency of the Chapter 11 Cases.


     
The foregoing types of Claims and such other Claims
that may arise in the Chapter 7 case or result from the Chapter 11 Cases would be paid in full from
the liquidation proceeds before the balance of those proceeds would be made
available to pay pre-Chapter 11 Allowed Priority Claims, Allowed General
Unsecured Claims and Equity Securities.


     
The distributions from the liquidation proceeds
would be paid Pro Rata according to the amount of the aggregate Claims held by each Creditor. The
Debtors believe that the most likely outcome of liquidation proceeds under
Chapter 7 would be the application of the “absolute priority rule.” Under that
rule, no junior Creditor may receive any distribution until all senior
Creditors are paid in full, with interest, and no Equity Security holder may
receive any distribution until all Creditors are paid in full.


73







Table of Contents


     
The Debtors have determined that confirmation of the
Plan will provide each Creditor and holder of an Equity Security with no less of a recovery than it would
receive if the Debtors were liquidated under a Chapter 7. In a liquidation
under Chapter 7, the Debtors have determined that (i) holders of Administrative
Claims will be paid in full; (ii) holders of Miscellaneous Secured Claims will
be paid in full from liquidation of their collateral; and (iii) holders of the
Notes will not be paid in full from liquidation of the Collateral. As such,
all other Priority and General Unsecured Claims, including the Deficiency
Claims of Noteholders will not be paid in full. Holders of Equity Securities
will receive nothing in liquidation.


     
This determination is based upon the effect that a
Chapter 7 liquidation would have on the ultimate proceeds available for distribution to Creditors and
holders of Equity Securities, including: (i) the likelihood of revocation of
the Debtors’ gaming license in Nevada upon the occurrence of any such
liquidation; (ii) the increased costs and expenses of a liquidation under
Chapter 7 arising from fees payable to a trustee in bankruptcy and professional
advisors to such trustee; (iii) the erosion in value of assets in a Chapter 7
case in the context of the expeditious liquidation required under Chapter 7 and
the “forced sale” atmosphere that would prevail; (iv) the adverse effects on
the salability of business segments as a result of the departure of key
employees and the loss of major customers; (v) the amount of existing Claims
and the substantial increases in Claims that would have to be satisfied on a
priority basis or on a parity basis with Creditors in the Chapter 11 Cases; and
(vi) the fair market value of the Debtors’ assets.


     
The Debtors also believe that the value of any
distributions from the liquidation proceeds to Allowed Claims in Chapter 7 cases would be less than
the value of distributions under the Plan because such distributions in the
Chapter 7 cases would not occur for a substantial period of time. In the
likely event litigation were necessary to resolve Claims asserted in the
Chapter 7 cases, the delay could be prolonged for several years.


74







Table of Contents


     
As of the Petition Date, substantially all of
the Debtors’ assets were encumbered by deeds of trusts and security agreements in favor of the Indenture Trustee
on behalf of the Noteholders securing the principal amount of $205,000,000.00 plus
accrued interest, for a total $248,235,132.72 as of the Petition Date. Based in
part upon the sales price for Fitzgeralds Black Hawk, Fitzgeralds Tunica and
Fitzgeralds Las Vegas to Majestic Investor, the fair market value of the
Debtors’ real and personal property is estimated at $191,258,000.00 without
regard to cash and cash equivalents), which is less than the above stated
amount owed to the Noteholders as of the Petition Date. When the cost of
liquidation of such property is considered as well as the time delay in
receiving distributions, the Debtors believe that certain Creditors will
receive substantially smaller distributions pursuant to a Chapter 7 liquidation
than under the Plan. The Liquidation Analysis attached hereto as Exhibit “B”
summarizes the Debtors’ best estimate of recoveries by Creditors in the event
of liquidation of the Debtors as of December 31, 2002.


     
Under the Plan, the impaired Classes of Claims are
Classes 6, 8, 9, 10, 11, 12, and 13. The value provided under the Plan to these Classes is not less
than they would receive in liquidation.





     
     
     
2. Feasibility. The Bankruptcy Code requires that in order to confirm the
Plan, the Bankruptcy Court must find that Confirmation of the Plan is not
likely to be followed by liquidation or the need for further financial
reorganization of the Debtors (the “Feasibility Test”). For the Plan to meet
the Feasibility Test, the Bankruptcy Court must find that the Debtors will
possess the resources and working capital necessary to meet their obligations
under the Plan.





     
     
     
3. Accepting Impaired Class. Since a Class of Claims is impaired under
the Plan, for the Plan to be confirmed, the Plan must be accepted by at least
one impaired Class of Claims (not including the votes of insiders of the
Debtors).





     
     
     
4. Acceptance of Plan. For an impaired Class of Claims to accept the Plan,
those representing at least two-thirds (2/3) in amount and a majority in number
of the Allowed

75







Table of Contents


Claims voted in that Class must be cast for acceptance of the
Plan. Similarly, for an impaired Class of Equity Securities to accept the Plan, votes representing at least two-thirds
(2/3) in amount of the outstanding Equity Securities voted in that Class must
be cast for acceptance of the Plan.





     
     
     
5. Confirmation over Dissenting Class (“Cram Down”). If there is less than
unanimous acceptance of the Plan by impaired Classes of Claims or Equity
Securities, the Bankruptcy Court nevertheless may confirm the Plan at the
Debtors’ request. Bankruptcy Code Section 1129(b) provides that if all other
requirements of Bankruptcy Code Section 1129(a) are satisfied and if the
Bankruptcy Court finds that: (i) the Plan does not discriminate unfairly and
(ii) the Plan is fair and equitable with respect to the rejecting Class(es) of
Claims or Equity Securities impaired under the Plan, the Bankruptcy Court may
confirm the Plan despite the rejection of the Plan by dissenting impaired Class
of Claims or Equity Securities. The Debtors will request confirmation of the
Plan pursuant to Bankruptcy Code Section 1129(b) with respect to any impaired
Class or Claims of Equity Security which does not vote to accept the Plan. The
Debtors believe that the Plan satisfies all of the statutory requirements for
Confirmation, that the Debtors have complied with or will have complied with
all the statutory requirements for Confirmation of the Plan and that the Plan
is proposed in good faith. At the Confirmation Hearing, the Bankruptcy Court
will determine whether the Plan satisfies the statutory requirements for
Confirmation.





     
     
     
6. Allowed Claims. You have an Allowed Claim if: (i) you or your
representative timely file a proof of Claim and no objection has been filed to
your Claim within the time period set for the filing of such objections; (ii)
you or your representative timely file a proof of Claim and an objection was
filed to your Claim upon which the Bankruptcy Court has ruled and allowed your
Claim; (iii) your Claim is listed by any of the Debtors in their respective
schedules or any amendments thereto (which are on file with the Bankruptcy
Court as a public record) as liquidated in amount and undisputed and no
objection has been filed to your Claim; or (iv) your

76







Table of Contents


Claim is listed by any of
the Debtors in their respective schedules as liquidated in amount and
undisputed and an objection was filed to your Claim upon which the Bankruptcy Court has ruled to allow your Claim. Under the
Plan, the deadline for filing objections to Claims is ninety (90) days
following the Effective Date. If your Claim is not an Allowed Claim, it is a
Disputed Claim and you will not be entitled to vote on the Plan unless the
Bankruptcy Court temporarily or provisionally allows your Claim for voting
purposes pursuant to Bankruptcy Rule 3018. If you are uncertain as to the
status of your Claim or Equity Security or if you have a dispute with any of
the Debtors, you should check the Bankruptcy Court record carefully, including
the schedules of the Debtors, and you should seek appropriate legal advice.
The Debtors and their professionals cannot advise you about such matters.





     
     
     
7. Impaired Claims and Equity Securities. Impaired Claims and Equity
Securities include those whose legal, equitable or contractual rights are
altered by the Plan, even if the alteration is beneficial to the Creditor or
Equity Security holder, or if the full amount of the Allowed Claims will not be
paid under the Plan. Holders of Claims which are not impaired under the Plan
are deemed to have accepted the Plan pursuant to Section 1126(f) of the
Bankruptcy Code and the Debtors need not solicit the acceptances of the Plan of
such unimpaired Claims. Holders of Claims or Equity Securities which are to
receive nothing under the Plan are deemed to have voted to reject the Plan. As
such, only holders of Claims in impaired Classes 6 and 8 under the Plan are
entitled to vote.





     
     
     
8. Voting Procedures.


     
          
     a) Submission of Ballots. All Creditors entitled to vote
will be sent a Ballot, together with instructions for voting, a copy of this approved
Disclosure Statement and a copy of the Plan. You should read the Ballot
carefully and follow the instructions contained therein. Please use only the
Ballot that was sent with this Disclosure Statement. Unless otherwise


77







Table of Contents



instructed by a record holder of Notes, you should complete your Ballot and
return it as follows:



	 
	GORDON & SILVER, LTD.

3960 HOWARD HUGHES PARKWAY, 9TH FLOOR

LAS VEGAS, NV 89109

ATTN: THOMAS H. FELL, ESQ.

TELEPHONE: (702) 796-5555

FACSIMILE: (702) 369-2666






     
TO BE COUNTED, YOUR BALLOT MUST BE RECEIVED AT THE
ADDRESS LISTED ABOVE BY 5:00 P.M. PACIFIC STANDARD TIME, FEBRUARY 3, 2003.



     
          
     
b) Incomplete Ballots. Unless otherwise ordered by
the Bankruptcy court, Ballots which are signed, dated and timely received, but on which a vote to
accept or reject the Plan has not been indicated, will be counted as a vote on
the Plan.



     
          
     
c) Withdrawal of Ballots. A Ballot may not be withdrawn
or changed after it is cast unless the Bankruptcy Court permits you to do so after notice and a
hearing to determine whether sufficient cause exists to permit the change.



     
          
     
d) Questions and lost or damaged Ballots. If you have any questions
concerning these voting procedures, if your Ballot is damaged or lost or if you
believe you should have received a Ballot but did not receive one, you may
contact:



	 
	GORDON & SILVER, LTD.

3960 HOWARD HUGHES PARKWAY, 9TH FLOOR

LAS VEGAS, NV 89109

Attn: Thomas H. Fell, Esq.

TELEPHONE: (702) 796-5555

FACSIMILE: (702) 369-2666










	XVII.

	 

	ALTERNATIVE TO THE PLAN




     
The Debtors believe that the Plan provides Creditors
and holders of Equity Securities the best and most complete form of recovery available. As a result,
the Debtors believe that the Plan serves the best interests of all Creditors
and parties-in-interest in the Chapter 11 Cases.


78







Table of Contents


     
In formulating and developing the Plan, the Debtors
have explored numerous other alternatives and engaged in an extensive negotiation process with the
Informal Committee. The Debtors believe not only that the Plan, as described
herein, fairly adjusts the rights of various Classes of Creditors and enables
the Creditors to realize the greatest sum possible under the circumstances, but
also that rejection of the Plan in favor of some theoretical alternative method
of reconciling the Claims and Equity Securities of the various Classes will
require, at the very least, an extensive and time consuming negotiation process
and will not result in a better recovery for any Class. It is not atypical for
bankruptcy proceedings involving substantial entities to continue for months or
years before a plan of reorganization is consummated and payments are made.







	 

	A.

	 

	Alternative Plans of Reorganization.




     
Under the Bankruptcy Code, a debtor has an exclusive
period of one hundred and twenty (120) days and an additional vote solicitation period of sixty (60)
days from the entry of the order for relief during which time, assuming that no
trustee has been appointed by the Bankruptcy Court, only a debtor may propose
and confirm a plan. After the expiration of the initial one hundred and eighty
(180) day period and any extensions thereof, the debtor, or any other
party-in-interest, may propose a different plan provided the exclusivity period
is not further extended by the Bankruptcy Court. Such an alternative plan
might involve either a reorganization and continuation of a debtor’s business,
an orderly liquidation of the assets or some combination thereof.







	 

	B.

	 

	Liquidation Under Chapter 7.




     
If a plan cannot be confirmed, a chapter 11
case may be converted to a case under chapter 7, in which a trustee would be elected or appointed to
liquidate the assets of the debtor for distribution to their creditors and
holders of equity security in accordance with the priorities established by the
Bankruptcy Code. For a discussion of the effect that a chapter 7 liquidation
would have on the recovery by creditors, see Section XVI B.1. “Confirmation of
the Plan – Best Interest of Creditors


79







Table of Contents


 and Liquidation Analysis.”


     
As previously stated, the Debtors believe that
a liquidation under Chapter 7 would result in a substantially reduced recovery of funds by their Estates
because of: (i) an enormous loss of value resulting from the possible
revocation of gaming and regulatory licenses; (ii) a significant loss of value
resulting from the possible authorization by the Gaming Authorities of a
trustee who would be authorized to operate the Estates and could be authorized
to sell the assets and the additional Administrative Expenses and fees
associated therewith (iii) additional Administrative Expenses involved in the
appointment of a trustee for the Debtors and attorneys and other professionals
to assist such trustee; and (iv) additional expenses and Claims, some of which
would be entitled to priority, which would be generated during the liquidation
and from the rejection of leases and other executory contracts in connection
with a cessation of the Debtors’ operations. Accordingly, the Debtors believe
that holders of certain classes of Claims may be expected to receive
substantially smaller distributions pursuant to a Chapter 7 liquidation than
under the Plan.







	 

	C.

	 

	Preference and Other Avoidance Actions.




     
A bankruptcy trustee (or the entity as
debtor-in-possession) may avoid as a preference a transfer of property made by a debtor to a creditor on account
of an antecedent debt while a debtor was insolvent, where that creditor
receives more than it would have received in a liquidation of the entity under
Chapter 7 of the Bankruptcy Code had the payment not been made, if (i) the
payment was made within ninety (90) days before the date the bankruptcy case
was commenced; or (ii) if the creditor is found to have been an “insider” as
defined in the Bankruptcy Code, within one (1) year before the commencement of
the bankruptcy case. A debtor is presumed to have been insolvent during the
ninety (90) days proceeding the commencement case. A bankruptcy trustee (or
the entity as debtor-in-possession) may avoid as a fraudulent


80







Table of Contents



transfer a transfer of property made by a debtor within one year (and under applicable
Nevada law, three years) before the date the bankruptcy case was commenced if (i) the debtor
received less than a reasonably equivalent value in exchange for such transfer;
and (ii) was insolvent on the date of such transfer or became insolvent as a
result of such transfer, such transfer left the debtor with an unreasonably
small capital, or the debtor intended to incur debts that would be beyond
debtor’s ability to pay as such debts matured.


     
Although the Debtors have not fully analyzed
various potential preference or other avoidance actions, it is possible that some possible prepetition
transactions may be avoidable. Pursuant to the Restructuring Agreement, the
Indenture Trustee on behalf of the Noteholders received $6,227,708.00 on
December 4, 2000. Additionally, various professionals employed by the
Indenture Trustee and Noteholders received payments for fees and costs. Such
payments to the Indenture Trustee and the various professionals are potential
preferential transfers, provided other General Unsecured Claims are not paid in
full.


     
The Debtors have not fully analyzed all payments made
to various vendors during the months proceeding the filing of the Chapter 11 Cases. Although the
Debtors believe they were current with vendors and made payments in the
ordinary course of business, payments may have been made that are potential
preferential transfers.


     
At the present time, the Debtors do not intend to
pursue these potential preference actions so long as Class 7 General Unsecured Creditors are paid in
full.


81







Table of Contents


/ / /


/ / /


/ / /


/ / /


/ / /







	XVIII.

	 

	RECOMMENDATION AND CONCLUSION




     
The Plan provides the best possible recovery
for Creditors. Accordingly, the Debtors recommend that all Creditors who are entitled to vote on the Plan
should vote to accept the Plan.


     
DATED this _____ day of December, 2002.

	 	 	 
	 

	 

	
FITZGERALDS GAMING CORPORATION,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS SOUTH, INC.,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS RENO, INC.,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS INCORPORATED,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS LAS VEGAS, INC.,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS MISSISSIPPI, INC.,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS BLACK HAWK, INC.,

a Nevada corporation


	 

	 

	 


	 

	 

	
FITZGERALDS BLACK HAWK II, INC.,

a Colorado corporation


	 

	 

	 


	 

	 

	
101 MAIN STREET LIMITED LIABILITY COMPANY, a

Colorado Limited Liability Company


	 

	 

	 


	 

	 

	
FITZGERALDS FREMONT EXPERIENCE

CORPORATION, a Nevada Corporation


	 

	 

	 




	 	 	By

	 
	 

	 

	
 

	

	 

	 

	 	
MICHAEL E. MCPHERSON





82







Table of Contents


PREPARED AND SUBMITTED BY:


GORDON & SILVER, LTD.



	By:	 	 
	 	 	

	 

	 

	
GERALD M. GORDON, ESQ.

Nevada Bar No. 229

WILLIAM M. NOALL, ESQ.

Nevada Bar No. 3549

THOMAS H. FELL, ESQ.

Nevada Bar No. 3717

3960 Howard Hughes Parkway, 9th Fl.

Las Vegas, Nevada 89109

   Attorneys for Debtors






83