<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q


       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

               For the first quarterly period ended March 31, 1998




                                GIANT GROUP, LTD.

        9000 Sunset Boulevard, 16th Floor, Los Angeles, California 90069

                  Registrant's telephone number: (310) 273-5678




                         Commission File Number: 1-4323

                I.R.S. Employer Identification Number: 23-0622690

                        State of Incorporation: Delaware




     Indicate by check mark whether the registrant (1) has filed all reports
 required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
    1934 during the preceding 12 months (or for such shorter period that the
     registrant was required to file such reports) and (2) has been subject
            to such filing requirements for the past 90 days. Yes X


             On May 12, 1998 the latest practicable date, there were
                 3,180,655 shares of Common Stock outstanding.


<PAGE>   2

                                GIANT GROUP, LTD.

                                      INDEX





PART I.    FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                             Page No.
                                                                             --------
<S>                                                                          <C>
Item 1.    Financial Statements

             Consolidated Statements of Operations -
             Three-Month Periods Ended March 31, 1997 and 1998                  3

             Consolidated Balance Sheets -
             December 31, 1997 and March 31, 1998                               4

             Consolidated Statements of Cash Flows -
             Three-Month Periods Ended March 31, 1997 and 1998                  5

             Notes to Consolidated Financial Statements                        6-9

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                                10-11


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings                                                    12

Item 6.    Exhibits and Reports on Form 8-K                                     12

             (a) Exhibits

             (b) Reports on Form 8-K

Signature                                                                       12

</TABLE>



                                       2
<PAGE>   3

                                GIANT GROUP, LTD.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
(Dollars  in thousands, except per share amounts)
                                                                              Three-months ended
                                                                                  March 31,
                                                                         -----------------------------
                                                                            1998              1997
                                                                         -----------       -----------
<S>                                                                      <C>               <C>        
Revenue:
     Investment income                                                   $       477       $       699
     Gain on the sale of marketable securities                                   118                41
     Charter and other income                                                    155                 5
                                                                         -----------       -----------
                                                                                 750               745
                                                                         -----------       -----------

Costs and expenses:
     Co-ownership program                                                        572               463
     General and administrative                                                  899             1,134
     Interest expense                                                              1                 1
     Depreciation                                                                141                96
                                                                         -----------       -----------
                                                                               1,613             1,694
                                                                         -----------       -----------

Equity in loss of affiliate                                                       --              (143)
                                                                         -----------       -----------

Loss before income taxes                                                        (863)           (1,092)

Income taxes                                                                      --                --
                                                                         -----------       -----------
Net loss                                                                 $      (863)      $    (1,092)
                                                                         ===========       ===========

Basic and diluted loss per common share                                  $     (0.27)      $     (0.31)
                                                                         ===========       ===========

Weighted average shares for basic and diluted loss per common share        3,181,000         3,490,000
                                                                         ===========       ===========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                       3
<PAGE>   4


                                GIANT GROUP, LTD.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
 (Dollars in thousands, except per share amounts)
                                                                                   March 31,     December 31,
                                                                                      1998         1997
                                                                                  -----------   ------------
                                                                                  (Unaudited)
<S>                                                                               <C>           <C>    
ASSETS
Current assets:
   Cash and cash equivalents                                                        $ 2,822      $ 1,137
   Marketable securities                                                             13,706       18,874
   Income tax receivables                                                             1,100        1,100
   Other receivables                                                                    213          332
   Assets held-for-sale                                                              24,411       24,362
   Prepaid expenses and other assets                                                    301          420
                                                                                    -------      -------
        Total current assets                                                         42,553       46,225

Property and equipment, net                                                           4,768        4,905
Note receivable and other assets                                                      4,053        2,746
                                                                                    -------      -------
       Total assets                                                                 $51,374      $53,876
                                                                                    =======      =======

LIABILITIES
Current liabilities:
   Accounts payable and accrued expenses                                            $   803      $ 1,209
   Income taxes payable                                                                 219          219
   Deferred income taxes                                                              2,290        2,776
                                                                                    -------      -------
       Total current liabilities                                                      3,312        4,204

Deferred income taxes                                                                 1,174        1,174
                                                                                    -------      -------
       Total liabilities                                                              4,486        5,378
                                                                                    -------      -------
Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; authorized 2,000,000 shares, none issued                --           --
Class A common stock, $.01 par value; authorized 5,000,000 shares, none issued           --           --
Common stock, $.01 par value; authorized 12,500,000 shares, 7,266,000 issued             73           73
Capital in excess of par value                                                       36,767       36,767
Accumulated other comprehensive income - unrealized gains on
  marketable securities, net                                                          3,438        4,185
Retained earnings                                                                    42,227       43,090
                                                                                    -------      -------
                                                                                     82,505       84,115
Less common stock in treasury; 4,085,000 shares at March 31 and
  December 31, at cost                                                               35,617       35,617
                                                                                    -------      -------
       Total stockholders' equity                                                    46,888       48,498
                                                                                    -------      -------
       Total liabilities and stockholders' equity                                   $51,374      $53,876
                                                                                    =======      =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       4
<PAGE>   5

                                GIANT GROUP, LTD.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
(Dollars in thousands)
                                                                        Three-months ended
                                                                             March 31,
                                                                      -----------------------
                                                                       1998            1997
                                                                      --------       --------
<S>                                                                   <C>            <C>      
Operating Activities:
   Net loss                                                           $   (863)      $ (1,092)
   Adjustments to reconcile net loss to net cash (used) provided
     by operating activities:
     Depreciation                                                          141             96
     Gain on the sale of marketable securities                            (118)           (41)
     Equity in loss of affiliate                                            --            143
     Accretion of discounts on investments                                (189)          (191)
     Changes in assets and liabilities:
       Decrease in income tax receivables                                   --         10,716
       Decrease in prepaid expenses and other assets                       221            195
       Decrease in accounts payable and accrued expenses                  (406)          (282)
                                                                      --------       --------
               Net cash (used) provided by operating activities         (1,214)         9,544
                                                                      --------       --------

Investing Activities:
  Sales of marketable securities                                         3,070          6,507
  Purchase of marketable securities                                       (141)        (5,000)
  Debt payment and short-term repayment                                     24          1,794
  Purchase of assets held-for-sale and related costs                       (50)        (2,009)
  Purchases of property and equipment                                       (4)          (385)
                                                                      --------       --------
               Net cash provided by investing activities                 2,899            907
                                                                      --------       --------

Financing Activities:
  Repayment of short-term borrowings                                        --        (10,500)
  Purchase of treasury stock                                                --         (3,431)
                                                                      --------       --------
               Net cash used by financing activities                        --        (13,931)
                                                                      --------       --------

               Increase (decrease) in cash and cash equivalents          1,685         (3,480)

Cash and cash equivalents:
   Beginning of period                                                   1,137         12,644
                                                                      --------       --------

   End of period                                                      $  2,822       $  9,164
                                                                      ========       ========

Supplemental disclosure of cash received (paid) for:
   Income taxes                                                       $     --       $ 10,716
   Interest                                                                 (1)            (1)
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       5
<PAGE>   6

                                GIANT GROUP, LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

1.         BASIS OF PRESENTATION

           The accompanying unaudited consolidated financial statements have
been prepared in accordance with Form 10-Q instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March 31,
1998 and the results of operations and cash flows for the three-month periods
ended March 31, 1998 and 1997. These results have been determined on the basis
of generally accepted accounting principles and practices applied consistently
with those used in the preparation of the Company's 1997 Annual Report on Form
10-K. Certain 1997 amounts have been reclassified to conform to the 1998
presentation. Operating results for the three-month period ended March 31, 1998
are not necessarily indicative of the results that may be expected for the full
year. It is suggested that the accompanying unaudited consolidated financial
statements be read in conjunction with the financial statements and notes in the
Company's 1997 Annual Report on Form 10-K.

2.         INVESTMENT IN AFFILIATE

          As of March 31, 1998 and December 31, 1997, the Company's investment
in Rally's consists of approximately 3,181,000 shares of common stock and 449
shares of Rally's series A participating preferred stock which is convertible
into 100 shares of Rally's common stock after the approval of Rally's
stockholders. This investment is accounted for as a marketable security
-available-for-sale. The quoted market value of Rally's common stock on March
31, 1998 was approximately $7,347.

          On December 18, 1997, the Company's ownership decreased to
approximately 13%. The decrease in the Company's ownership resulted from the
exchange by the Company of approximately 200,000 shares of Checkers common stock
for Rally's securities. In addition, certain of the Company's related parties,
CKE and Fidelity also participated in the exchange of Checkers' securities.

          In June 1997, Rally's and Checkers ended talks for a proposed merger
between the two companies, which was announced on March 25, 1997. However, as a
result of the exchange of securities in December 1997, Rally's now owns
approximately 27% of Checkers. Rally's Chairman of the Board and Chief Executive
Officer have both been appointed to the same positions in Checkers and further
consolidations of management and operations are underway.

          In March 1997, 1,175,000 options granted to Fidelity and CKE by GIANT
to purchase Rally's common stock at $4.00 per share were canceled. These options
had been granted pursuant to the 1996 Purchase and Standstill Agreement between
GIANT and Fidelity.

          As of March 31, 1997, the Company accounted for its 15% investment in
Rally's common stock, which consisted of 3,137,000 shares, under the equity
accounting method. The quoted market value on March 31, 1997 of this investment
was $11,372.

          Summarized financial information for Rally's is as follows:

<TABLE>
<CAPTION>
Operating results for the 1st quarter                   1997
-------------------------------------                 --------
<S>                                                   <C>     
 Revenues                                             $ 32,595
 Income from operations                                  1,015
 Net loss                                                 (952)
GIANT's share of non-cash equity loss in Rally's          (143)

</TABLE>



                                       6
<PAGE>   7

                               GIANT GROUP, LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                (Dollars in thousands, except per share amounts)

3.        NEW ACCOUNTING PRONOUNCEMENTS

           During the first quarter of 1998, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income", which established standards for reporting and
displaying comprehensive income or loss and its components in a full set of
general-purpose financial statements. The changes in components of comprehensive
loss, net of benefit for income taxes, for the 3 months ended March 31, 1998 and
1997 are as follows:

<TABLE>
<CAPTION>
                                               1998                                        1997
                                  --------------------------------       ---------------------------------------
                                  Pre-Tax      Tax         Net           Pre-tax            Tax             Net
                                  Amount      Benefit     Amount          Amount          Benefit         Amount
                                  ------      -------     ------          ------         --------         ------
<S>                               <C>         <C>         <C>            <C>             <C>              <C>     
Other comprehensive loss:
   Unrealized losses on
   marketable securities, net     $(1,245)     $ (498)    $   (747)       $  (215)       $   (86)         $  (129)

Net loss                                                      (863)                                        (1,092)
                                                           -------                                        -------

     Comprehensive loss                                     $(1,610)                                      $(1,221)
                                                           ========                                       =======
</TABLE>

4.         COMMITMENTS AND CONTINGENCIES

           The Company is involved in lawsuits as described in the following
paragraphs.

           Mittman/Rally's. In January and February 1994, two putative class
action lawsuits were filed, purportedly on behalf of the shareholders of Rally's
in the United States District Court for the Western District of Kentucky,
against Rally's, certain of Rally's present and former officers, directors and
shareholders and its auditors and GIANT and Burt Sugarman. The complaints allege
defendants violated the Securities Exchange Act of 1934, as amended, among other
claims, by issuing inaccurate public statements about Rally's in order to
arbitrarily inflate the price of Rally's common stock, and seek unspecified
damages, including punitive damages. On April 15, 1994, GIANT filed a motion to
dismiss and a motion to strike. On April 5, 1995, the Court struck certain
provisions of the complaint but otherwise denied GIANT's motion to dismiss. In
addition, the Court denied plaintiffs' motion for class certification. On July
31, 1995, the plaintiffs renewed this motion, and, on April 16, 1996, the Court
certified the class. Two settlement conferences have been conducted but have
been unsuccessful. Fact discovery is now set to be completed by the end of
April, 1998. No trial date has been scheduled yet. Management is unable to
predict the outcome of this matter at the present time and does not know if all
of the potentially available insurance coverages will apply. Rally's and GIANT
deny all wrongdoing and intend to defend themselves vigorously in this matter.

           Harbor. In February 1996, Harbor Finance Partners ("Harbor")
commenced a derivative action, purportedly on behalf of Rally's, against certain
of Rally's officers and directors and GIANT, David Gotterer and Burt Sugarman
(listed alphabetically), before the Delaware Chancery Courts. Harbor named
Rally's as a nominal defendant. Harbor claims that the directors and officers of
both Rally's and GIANT, along with GIANT, breached their fiduciary duties to the
public shareholders of Rally's by causing Rally's to repurchase certain Rally's
Senior Notes at an inflated price. The NASDAQ closing price of the Senior Notes
as of March 6, 1998 was $981.25 per $1,000 principal amount, approximately 45%
higher than the repurchase price. Harbor seeks "millions of dollars in damages",
along with rescission of the repurchase transaction. In the fall of 1996, all
defendants moved to dismiss this action. On April 3, 1997, the Chancery Court
denied defendants' motion. Discovery is in the initial stages. No trial date has
been scheduled yet. Rally's and GIANT deny all wrongdoing and intend to
vigorously defend this action. It is not possible to predict the outcome of this
action at this time.

           Shores.  In October 1997, the putative class of plaintiffs and the 
Company agreed through counsel, to settle the class action amicably, which
settlement provides for the payment of $125,000 to defray plaintiffs' attorneys'
fees and expenses as well as the approval by the Company's Board of Directors of
two resolutions confirming certain previously adopted corporate policies. In
February 1998, the Los Angeles Superior Court confirmed the Settlement. The
Company's applicable insurance should cover all or a substantial portion of the
payment. This


                                       7
<PAGE>   8

                               GIANT GROUP, LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                (Dollars in thousands, except per share amounts)


4.         COMMITMENTS AND CONTINGENCIES (CONT.)

class action had commenced in February 1996, when Michael Shores on behalf of
himself and purportedly all other stockholders of the Company commenced a
putative class action against the Company, and certain of the Company's current
and former directors, Terry Christensen, David Gotterer, Burt Sugarman and
Robert Wynn (listed alphabetically). The complaint, filed before the Los Angeles
County Superior Court, alleged that these directors breached their fiduciary
duties by adopting a stockholder rights plan, by causing GIANT to sell certain
Rally's Senior Notes back to Rally's, by causing GIANT to repurchase certain
amounts of its own Common Stock pursuant to its stock repurchase program and by
agreeing to the Exchange Offer. The complaint claimed that these actions were
undertaken to entrench management rather than for the benefit of the Company and
its stockholders. The complaint sought unspecified damages, injunctive relief
and a recovery of attorneys' fees and costs. In February 1997, defendants filed
a motion to dismiss for failure to make a pre-litigation demand on the Board of
Directors to investigate the plaintiffs' claim. The motion asked the court, in
the alternative, to stay the litigation to permit the Company to address
plaintiffs' claims internally. The motion to dismiss was never heard. Throughout
the litigation, the Company denied all wrongdoing. By the settlement and the
payment, the Company has not admitted any liability.

           KCC/Pike Santa Monica Action. In October 1996, KCC filed a complaint,
in the Los Angeles County Superior Court, against NeoGen Investors, L.P., N.D.
Management, Inc., NeoGen Holdings, L.P., Danco Laboratories, Inc. and NeoGen
Pharmaceutical, Inc. (collectively the "NeoGen Entities") and Joseph Pike,
stating causes of action for fraud, breach of fiduciary duty, fraudulent
concealment, breach of contract, unfair business practices and permanent and
preliminary injunctive relief and against the licensors of Mifepristone, the
Population Council, Inc. and Advances in Health Technology, Inc., on a
declaratory relief claim. The complaint seeks damages for the breach by Joseph
Pike and the NeoGen entities of a July 24, 1996 agreement by which KCC agreed to
contribute $6,000, in return for a 26% equity interest in the entity producing
the abortion inducing drug, Mifepristone, in the United States and other parts
of the world ("NeoGen Agreement"). On February 19, 1997, Joseph Pike and the
NeoGen Entities filed an answer to the complaint, denying its material
allegations and raising affirmative defenses. On that date, the NeoGen Entities
also filed a cross-complaint against KCC, the Company, and certain of the
Company's directors, Terry Christensen, David Malcolm and Burt Sugarman (listed
alphabetically), which alleged causes of action for fraud, breach of contract,
intentional interference with prospective economic advantage, negligent
interference with prospective economic advantage and unfair business practices.
In October 1997, KCC settled their action with the licensors, the Population
Council, Inc. and Advances in Health Technology, Inc., and in November 1997, KCC
settled their action with Joseph Pike. Discovery is on going in KCC's action
against the NeoGen Entities and in the related cross-complaint. Trial is
rescheduled for September 28, 1998. The Company denies all wrongdoing and
intends to vigorously defend itself against the cross-complaint. It is not
possible to predict the outcome of this action at this time.

           Pike Defamation Action (San Diego). On November 13, 1997, KCC, GIANT
and Joseph Pike announced the settlement of their litigation. This litigation
had commenced in November 1996 when Joseph Pike filed a complaint for defamation
against GIANT, KCC, Terry Christensen, David Malcolm and Burt Sugarman (listed
alphabetically) and Does 1 through 50, in the San Diego County Superior Court.
The complaint had sought an unspecified amount of general, special and exemplary
damages. All defendants answered the complaint, denying its material allegations
and had raised several affirmative defenses.

           Since management does not believe that the previously mentioned
lawsuits, in which the Company is a defendant, contain meritorious claims,
management believes that the ultimate resolution of the lawsuits will not
materially and adversely affect the Company's consolidated financial position or
results of operations.



                                       8
<PAGE>   9

                               GIANT GROUP, LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                (Dollars in thousands, except per share amounts)


5.         SUBSEQUENT EVENTS

           Sale of Assets

               On April 17, 1998, the Company sold for cash one of its two
luxury yachts for a gross sales price of $14,500, less selling expenses. The
Company will recognize no gain or loss related to this sale. The Company is
marketing the remaining yacht for sale, and will continue to charter it pending
a sale.

           On April 28, 1998, the Company sold its plane, a Gulfstream IISP
acquired in 1991, for a net sale price of approximately $6,200 in cash and will
recognize a pre-tax gain of approximately $2,800.



                                       9
<PAGE>   10


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

RESULTS OF OPERATIONS FOR THE THREE-MONTHS ENDED MARCH 31, 1998 VERSUS MARCH 31,
1997

           Total revenue for the three-months ended March 31, 1998 increased $5
to $750 from $745 for the comparable period in 1997. The current year's quarter
reflected charter income of $150 and higher gains of $77 on the sale of
marketable securities compared to the first quarter of 1997. These increases in
revenue were offset by lower investment income of $222, consisting mostly of
interest income, due to the liquidation of securities to fund expenses,
including those expenses related to the Luxury Yacht Co-Ownership Program
("Co-Ownership Program").

           The on-going maintenance expenses for the yachts for the three-months
ended March 31, 1998 increased $109 to $572 from $463 for the comparable period
in 1997. In the first quarter 1998 there was higher crew payroll and related
expense of $179. The Company ended the Co-Ownership Program in November 1997.

           General and administrative expenses for the three-months ended March
31, 1998 decreased $235 to $899 in 1998 from $1,134 for the comparable period in
1997 resulting primarily from lower legal expenses of $132 and travel expenses
of $58.

           Effective December 1997, the Company records its investment in
Rally's common stock as a marketable security -available-for-sale because of a
reduction of its ownership. In 1997, the Company accounted for its investment in
Rally's common stock under the equity method.

LIQUIDITY AND CAPITAL RESOURCES

           Cash and cash equivalents, marketable securities and income tax
receivables at March 31, 1998 totaled $17,628 compared with $21,111 at December
31, 1997. At March 31, 1998 and December 31, 1997, the Company had working
capital of $39,241 and $42,021 with current ratios of 12.8 to 1 and 11.0 to 1,
respectively.

           Net cash used by operating activities for the three-months ended
March 31, 1998 was $1,214 compared to cash provided by operating activities of
$9,544 for the comparable period in 1997. The 1997 comparable period included
the receipt of an income tax receivable of $10,716 related to the realization of
capital losses on the 1996 sales of Rally's common stock and net operating loss
carryback claim, lowered by cash used for the funding of the Company's
operations.

           Net cash provided by investing activities for the three-months ended
March 31, 1998 was $2,899 compared to cash provided by investing activities of
$907 for the comparable period in 1997. Included in investing activities was net
proceeds on the sale of marketable securities of $2,929 in 1998 compared to
$1,507 in 1997. The Company received principal payments on its investment in
Checkers subordinated debt of $24 and 1,294 in 1998 and 1997, respectively, and
also received payment in full of the 1996 short-term advance of $500 in 1997.
Also, in 1998, the Company paid $4 for leasehold improvements compared to $385
for the comparable period in 1997.

           The Company's financing activities for the three-months ended March
31, 1998 did not use or provide cash compared to a use of cash of $13,931 in
1997. In 1997, the Company repaid the $10,500 note, which financed assets
purchased in 1996 for the Co-Ownership Program. In addition, in 1997, the
Company, with the approval of the Board of Directors, purchased 429,000 shares
of its own Common Stock at an aggregate cost of $3,431.

           The Company's current liquidity is provided by cash and cash
equivalents, marketable securities, and investment income. Management believes
that this liquidity, plus the Company's capital resources, is sufficient for
the Company to fund its current business operations and operating expenses. The
Company continues to review operating companies to acquire, but has not yet
entered into any definitive agreements. It is expected that the Company's
current assets would be sufficient to fund possible future acquisitions and, if
necessary, the Company believes that it would have the ability to obtain
financing at favorable rates.

           Subsequent to the quarter ended March 31, 1998, the Company received
cash of approximately $20,000 related to the sale of one of the Company's yachts
and the corporate plane.




                                       10
<PAGE>   11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

YEAR 2000

         Based on the Company's existing operations, the Company believes that
it will be able to achieve the Year 2000 compliance through a modification of
its existing programs and systems at a minimal cost.

PERSONAL HOLDING COMPANY

          Under the Internal Revenue Code, in addition to the regular corporate
income tax, an additional tax may be levied upon an entity that is classified as
a "personal holding company". In general, this tax is imposed on corporations
which are more than 50% owned, directly or indirectly, by 5 or fewer individuals
(the "Ownership Test") and which derive 60% or more of their income from
"personal holding company" sources, generally defined to be passive income (the
"Income Test"). If a corporation falls within the Ownership Test and the Income
Test, it is classified as a personal holding company, and will be taxed on its
"undistributed personal holding company income" at a rate of 39.6%. The Company
currently meets the stock ownership test. The Company has not met the income
requirement in recent years, therefore is not subject to this additional tax;
however no assurance can be given that the income test will not be satisfied in
the future.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Not applicable.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

           The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements: Certain information included in this
document (as well as information included in oral statements or other written
statements made or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plans for future activities.
Such forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
such results may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and uncertainties include, but
are not limited to, those relating to the development and implementation of the
Company's business plan, domestic and global economic conditions, activities of
competitors, changes in federal or state tax laws and of the administration of
such laws.



                                       11
<PAGE>   12

                           PART II. OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS.

            For information regarding legal matters, see Note 4 of the Notes to
            Consolidated Financial Statements on page 7 of this Form 10-Q and
            Item 3 "Legal Proceedings" as reported in the Company's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1997.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

         (a)    Exhibit

                27      Financial Data Schedule

         (b)    Reports on Form 8-K

                There were no reports filed on Form 8-K during the first quarter
of 1998.

ITEMS 2,3,4 AND 5 are not applicable.



                                    SIGNATURE

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



                                     GIANT GROUP, LTD. - Registrant


                                     By:   /s/ William H. Pennington
                                        ----------------------------------------
                                        William H. Pennington
                                        Vice President, Chief Financial Officer,
                                        Secretary and Treasurer





Date:      May 12, 1998



                                       12