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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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



For the quarterly period ended September 30, 2003



OR



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



Commission file number 000-24711



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EBS Litigation, L.L.C.

(Exact name of registrant as specified in its charter)



|Delaware                                                       |  | 13-3989964                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                              
|90 Park Avenue New York, New York 10016                       
|(Address of principal executive offices)                      



(212) 682-7474

(Registrants telephone number, including area code)



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



At November 1, 2003 there were 10,000,000 Class A Membership Units outstanding and no Class B Membership Units outstanding.



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PART I. FINANCIAL INFORMATION





|Item 1. |  | Financial Statements
|------- |  | --------------------



EBS LITIGATION, L.L.C.

Statements of Operations

For the Three and Nine Month Periods

Ended September 30, 2003 and 2002



|                                                  |  | For the three months ended September 30, |         | For the nine months ended September 30, |            
|------------------------------------------------- |  | ---------------------------------------- | ------- | --------------------------------------- | -----------
|                                                  |  | 2003                                     |         |                                         | 2002       
|                                                  |  | (unaudited)                              |         |                                         | (unaudited)
|Income:                                           |  |                                          |         |                                         |            
|Defendant payment revenue                         |  | $                                        |        |                                         |            
|Interest                                          |  |                                          | 1,556   |                                         |            
|                                                  |  |                                          |         |                                         |            
|Total income                                      |  |                                          | 1,556   |                                         |            
|                                                  |  |                                          |         |                                         |            
|Expenses:                                         |  |                                          |         |                                         |            
|Legal and accounting fees                         |  |                                          | 3,616   |                                         |            
|Insurance                                         |  |                                          | 17,500  |                                         |            
|Transfer agent and settlement administration fees |  |                                          | 6,164   |                                         |            
|Manager fees                                      |  |                                          | 4,618   |                                         |            
|Other                                             |  |                                          | 3,186   |                                         |            
|                                                  |  |                                          |         |                                         |            
|Total expenses                                    |  |                                          | 35,084  |                                         |            
|                                                  |  |                                          |         |                                         |            
|Net (loss) income                                 |  | $                                        | (33,528 | )                                       |            
|                                                  |  |                                          |         |                                         |            
|Net (loss) income per unitbasic and diluted      |  | $                                        | (0.003  | )                                       |            
|                                                  |  |                                          |         |                                         |            



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



2



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EBS LITIGATION, L.L.C.

Balance Sheet

September 30, 2003 and December 31, 2002



|                                                                         |  | September 30, 2003 |           | December 31, 2002
|------------------------------------------------------------------------ |  | ------------------ | --------- | -----------------
|                                                                         |  | (unaudited)        |           |                  
|Assets                                                                   |  |                    |           |                  
|Cash and cash equivalents                                                |  |                    |           |                  
|Available for general operations                                         |  | $                  | 1,137,015 |                  
|Prepaid expenses                                                         |  |                    | 257       |                  
|Interest receivable                                                      |  |                    | 433       |                  
|                                                                         |  |                    |           |                  
|Total assets                                                             |  | $                  | 1,137,705 |                  
|                                                                         |  |                    |           |                  
|Liabilities                                                              |  |                    |           |                  
|Accounts payable                                                         |  | $                  | 11,082    |                  
|Accrued expenses                                                         |  |                    | 83,807    |                  
|                                                                         |  |                    |           |                  
|Total liabilities                                                        |  |                    | 94,889    |                  
|                                                                         |  |                    |           |                  
|Members equity:                                                         |  |                    |           |                  
|Membership Units (Class A10,000,000 authorized, issued and outstanding) |  |                    |           |                  
|Retained earnings                                                        |  |                    | 1,042,816 |                  
|                                                                         |  |                    |           |                  
|Total members equity                                                    |  |                    | 1,042,816 |                  
|                                                                         |  |                    |           |                  
|Total liabilities and members equity                                    |  | $                  | 1,137,705 |                  
|                                                                         |  |                    |           |                  



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



3



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EBS LITIGATION, L.L.LC.

Statement of Changes in Members Equity

For the Periods Ended

September 30, 2003 and December 31, 2002



|                                        |  | Class AMembershipUnits |  | RetainedEarnings |           |   | Total |  
|--------------------------------------- |  | ---------------------- |  | ---------------- | --------- | - | ----- | -
|Balance, January 1, 2002                |  | 10,000,000             |  | $                | 1,115,421 |   |       | $
|Net loss                                |  |                       |  |                  | (467,778  | ) |       |  
|                                        |  |                        |  |                  |           |   |       |  
|Balance, December 31, 2002              |  | 10,000,000             |  |                  | 647,643   |   |       |  
|Net income (unaudited)                  |  |                       |  |                  | 395,173   |   |       |  
|                                        |  |                        |  |                  |           |   |       |  
|Balance, September 30, 2003 (unaudited) |  | 10,000,000             |  | $                | 1,042,816 |   |       | $
|                                        |  |                        |  |                  |           |   |       |  



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



4



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EBS LITIGATION, L.L.LC.

Statement of Cash Flows

For the Nine Months Ended

September 30, 2003 and 2002



|                                                                                              |  | For the nine months endedSeptember 30, |          
|--------------------------------------------------------------------------------------------- |  | -------------------------------------- | ---------
|                                                                                              |  | 2003                                   |          
|                                                                                              |  | (unaudited)                            |          
|Cash flows from operating activities:                                                         |  |                                        |          
|Net income (loss)                                                                             |  | $                                      | 395,173  
|Reconciliation of net income (loss) to cash flows provided by (used in) operating activities: |  |                                        |          
|Decrease in prepaid expenses                                                                  |  |                                        | 51,407   
|Decrease in interest receivable                                                               |  |                                        | 273      
|(Decrease) increase in accounts payable                                                       |  |                                        | (1,820   
|Decrease in accrued expenses                                                                  |  |                                        | (85,956  
|                                                                                              |  |                                        |          
|Cash flows from operations                                                                    |  |                                        | 359,077  
|                                                                                              |  |                                        |          
|                                                                                              |  |                                       
|Net increase (decrease) in cash and cash equivalents                                          |  |                                        | 359,077  
|                                                                                              |  |                                       
|Cash and cash equivalents at beginning of period                                              |  |                                        | 777,938  
|                                                                                              |  |                                        |          
|Cash and cash equivalents at end of period                                                    |  | $                                      | 1,137,015
|                                                                                              |  |                                        |          



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



5



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EBS Litigation, L.L.C.

Notes to Financial Statements

September 30, 2003 and December 31, 2002

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|1. | Description of Business
|-- | -----------------------



EBS Litigation, L.L.C. (the Company) is governed by a Members Agreement, dated as of September 25, 1997 (the Members Agreement).
Pursuant to the Members Agreement, the Companys purposes are to (a) prosecute, settle and/or liquidate the Unresolved Avoidance Claims relating to the distribution by Edison Brothers Stores, Inc. (Edison) of approximately 4.4
million shares of common stock of Dave & Busters, Inc. to holders of Edison common stock in the form of a dividend and all related transactions (the Unresolved Avoidance Claims), (b) receive and administer the cash proceeds of the
Unresolved Avoidance Claims, and (c) distribute the net proceeds to the appropriate holders of Membership Units (the Members) in accordance with the Members Agreement.



|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------



This summary of significant accounting policies is presented to assist in evaluating the Companys financial statements included in this report.
These policies conform to generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions which impact the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Adjustments are of a normal and recurring nature. Actual results could differ from those
estimates.



Basis of Presentation



These financial statements include the accounts of the Company for the
periods from January 1, 2002 through December 31, 2002, January 1, 2002 through September 30, 2002 (unaudited), January 1, 2003 through September 30, 2003 (unaudited), July 1, 2002 through September 30, 2002 (unaudited), and July 1, 2003 through
September 30, 2003 (unaudited).



Cash and Cash Equivalents



Cash consists of amounts held in an account in the
Companys name at a highly-rated financial institution. Such amounts are invested in an institutional money market fund investing solely in direct obligations of the United States Government.



The Companys cash and cash equivalents represent the sum of the
aggregate Dave and Busters, Inc. Spinoff Settlement Proceeds and the L.L.C. Funding Amount (see discussion in Note 3). These funds will be used for general operations. Any amounts not used in general operations will be made available for
future distributions to holders of Class A Membership Units.



Accrued Expenses



Accrued expenses include
amounts payable to service providers and other vendors. Amounts are payable within one year.



Defendant Payment Revenue



Defendant payment revenue is determined on an accrual basis and represents settlements with individual defendants of avoidance claims during the period.



Interest



Interest income is determined on the accrual basis. Interest receivable is due to be received within one year.



Expenses



All expenses of the Company are recorded on the accrual basis of accounting.



6



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EBS Litigation, L.L.C.

Notes to Financial Statements

September 30, 2003 and December 31, 2002

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Income Taxes



The Company is not subject to income taxes. Instead, the Members report their distributive share of the Companys profits and losses on their
respective income tax returns.



|3. | Members Equity
|-- | ---------------



On September 25, 1997, Edison transferred its rights, title and interest in the Unresolved Avoidance Claims to the Company. In addition, as of September
25, 1997, Edison was obligated to provide cash funding to the Company of $2.0 million (the LLC Funding Amount), which was subsequently paid to the Company on October 16, 1997. Such transfer and funding were in exchange for 10,000,000
Class B Membership Units of the Company, which represented all of the outstanding Membership Units of the Company. On December 12, 1997, in accordance with the Companys Members Agreement and the Plan of Reorganization (the Plan),
Edison exchanged 9,064,140 Class B Membership Units for 9,064,140 Class A Membership Units of the Company and simultaneously distributed such Class A Membership Units to holders of Allowed General Unsecured Claims (as defined in the Plan).



During 1998, Edison exchanged 936,138 Class B Membership Units
for 936,138 Class A Membership Units of the Company and simultaneously distributed such Class A units to holders of Allowed General Unsecured Claims.



During 1998, the Company distributed $13.7 million to holders of Class A Membership Units. In addition, $0.8 million was retained for holders of the Class
A Membership Units that were distributed in December 1998.



Also during 1998, certain Class A Membership Unit holders returned 278 Class A Membership Units to Edison as such Membership Units had been distributed in error. The distribution proceeds relating to these returned Membership Units are
included in retained earnings and were made available for future distributions to holders of Class A Membership Units.



On February 1, 1999, the Company distributed the $0.8 million of reserved amounts of D&B Spinoff Settlement Proceeds (as defined in the Plan) to the
holders of the Class A Membership Units that were distributed in November and December 1998. This represents the entire amount of funds reserved for future holders of Class A Membership Units.



During 2002 and the first, second, and third quarters of 2003, the Company
did not make any distributions to holders of Class A Membership units.



At September 30, 2003, the Company has no Class B Membership units outstanding.



|4. | Settlement Proceeds
|-- | -------------------



On September 10, 2002 and July 2, 2002, the Company settled with two members of the Class (Dave & Busters stock is held by approximately 2,500
different individuals and entities, collectively referred to as the Class). As a result of the settlements, the Company collected $113,126 and $97,500, respectively, for a total of $210,626. These settlements were collected in the fourth
fiscal quarter of 2002.



On January 10, 2003, the Court
approved a settlement with Trust Company of the West and its related entities in the amount of $615,940. The Company received payment on February 18, 2003.



There can be no assurances that other members of the Class will settle or what the terms of any other potential settlements may be.



7



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EBS Litigation, L.L.C.

Notes to Financial Statements

September 30, 2003 and December 31, 2002

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|5. | Commitments and Contingencies
|-- | -----------------------------



The Company and EBS Pension, L.L.C. were served on March 28, 2003, with a Fourth-Party Complaint brought by the Third-Party Defendants, David B. Cooper,
Jr., Julian I. Edison, Peter A. Edison, Jane Evans, Alan A. Sachs, Craig D. Schnuck, and Martin Sneider (collectively, the Edison Directors) in the matter of EBS Litigation, L.L.C. v. Barclays Global Investors, N.A., et al. C.A.
No. 98-547 SLR (Dist. Del) (the Litigation). Briefly, the Litigation brought by EBS Litigation, L.L.C. alleges that the Third-Party Plaintiffs are liable for the return of D&B stock received by them as a distribution from Edison in
1995. The Third-Party Plaintiffs brought a Third-Party claim pursuant to the Litigation alleging that if the Third-Party Plaintiffs were found liable, then the Edison Directors are liable to the Third-Party Plaintiffs for all or a part of the
recovery. The Fourth-Party Complaint brought by the Edison Directors alleges that if the Edison Directors are found liable in the Third Party claim, then pursuant to Section 5.1(f) of the Plan the Company and EBS Pension, L.L.C. are liable to the
Edison Directors for all costs and expenses the Edison Directors have incurred or will incur in connection with the Edison Directors defense of the Third-Party claim and with the prosecution of their Fourth-Party Complaint. Management
disagrees with the allegations contained in the Fourth-Party Complaint and does not believe the Company will be held liable for costs and expenses associated with the Edison Directors defense of the Third-Party claim or the prosecution of the
Fourth-Party Complaint. The Company continues to mediate the Litigation. There can be no assurances as to the outcome of the claims as a result of the mediation, or the liability of the Company, if any.



8



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|Item 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | -------------------------------------------------------------------------------------



The following is a discussion and analysis of the financial condition and the results of operations of the Company as of
and for the years ended December 31, 2002, 2001, 2000, 1999 and 1998 and as of and for the periods ended December 31, 1997, January 1, 2003 through September 30, 2003 (unaudited), July 1, 2003 through September 30, 2003 (unaudited), January 1, 2002
through September 30, 2002 (unaudited), and July 1, 2002 through September 30, 2002 (unaudited) and of certain factors that may affect the Companys prospective financial condition and results of operations. This discussion and analysis should
be read in conjunction with the Companys Financial Statements and Notes thereto included elsewhere herein and included in the Companys Annual Report and Form 10-K for the year ended December 31, 2002. This discussion contains certain
forward-looking statements that involve risks and uncertainties. The Companys actual results could differ materially from the results expressed in, or implied by, such statements.



Results of Operations/Overview



The Company, which was formed pursuant to the Amended Joint Plan of
Reorganization Under Chapter 11 of the U.S. Bankruptcy Code filed by the Debtors (the Plan) and the Members Agreement, is a limited purpose entity organized solely for the purposes of (a) prosecuting, settling and/or liquidating the
Unresolved Avoidance Claims, (b) receiving and administering the proceeds from the Unresolved Avoidance Claims (the Avoidance Claim Proceeds), and (c) distributing the net Avoidance Claim Proceeds to holders of the Companys Class A
Membership Units pursuant to the terms of the Members Agreement. The Company commenced its activities on September 25, 1997.



On October 16, 1997, the Company received the L.L.C. Funding Amount of $2 million. The Company recognizes income from amounts received from the
prosecution, settlement and liquidation of the Unresolved Avoidance Claims. To date, the Company has only received settlement amounts. During the period ended December 31, 1997, the Company received approximately $10.0 million in D&B Spinoff
Settlement Proceeds. The D&B Spinoff Settlement Period was to initially expire on October 27, 1997, at which time the Company had received approximately $7.8 million in D&B Spinoff Settlement Proceeds. However, many defendants were not able
to accept the D&B Spinoff Settlement by the initial deadline for reasons including, without limitation, (a) the time lag attendant to the transmission of settlement-related documents from record holders to their beneficial holders, and (b) the
desire of certain D&B Spinoff Stockholders to consult with counsel or other advisors prior to participating in the D&B Spinoff Settlement. The Manager therefore decided that an extension of the D&B Spinoff Settlement Period was in the
best interests of the Company. The extension permitted the recovery of additional D&B Settlement Proceeds of approximately $2.2 million between October 27, 1997 and December 31, 1997, approximately $5.0 million for the year ended December 31,
1998 and none for the years ended December 31, 2001, 2000 and 1999. For the year ended December 31, 2002, the Company received approximately $211,000 in D&B Settlement Proceeds. The Company recovered $615,940 for the period ended September 30,
2003. The Company expects to recognize defendant payment revenue in future periods as the Unresolved Avoidance Claims are prosecuted, settled further, or both. However, there can be no assurance that the Company will recognize any further defendant
payment revenue.



The Company also recognizes income from
interest earned on Avoidance Claim Proceeds. The Company invests Avoidance Claim Proceeds in a money market fund investing solely in direct obligations of the United States Government. The Members Agreement permits all funds received by the Company
to be temporarily invested in United States treasury bills and notes with maturities of 12 months or less, institutional money market funds, and demand or time deposits with U.S. federal or state commercial banks having primary capital of not less
than $500 million. During the years ended December 31, 2002, 2001, 2000, 1999 and 1998, and the period ended December 31, 1997, the Company recognized approximately $13,000, $50,000, $101,000, $92,000, $388,000 and $106,000 of interest income,
respectively. During the nine month periods ended September 30, 2003 and 2002, the Company recognized approximately $5,853 and $10,503 of interest income, respectively. The amount of interest income recognized by the Company in future periods will
be dependent on, among other things, (1) fluctuations in interest rates, (2) the amounts and timing of any Avoidance Claims Proceeds received in the future, (3) the amounts and timing of any distributions to holders of Class A Membership Units, and
(4) the amount and timing of the Companys expenses.



9



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The Companys expenses consist primarily of fees payable to the Companys lawyers and
accountants, insurance expenses, the Transfer Agent and the Manager. The Company had expenses of approximately $691,000, $442,000, $489,000, $299,000, $671,000 and $176,000 for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, and the
period ended December 31, 1997, respectively. During the nine month periods ended September 30, 2003 and 2002, the Company had expenses of approximately $226,620 and $592,007, respectively. These expenses are expected to fluctuate in future periods
primarily based on activity in any period in the D & B Spinoff Litigation.



Pursuant to Section 5.1(f) of the Plan, the Company and EBS Pension L.L.C. (EBS Pension) have agreed to indemnify the Debtors (as defined in the Plan) and their present or former officers, directors and
employees from and against any losses, claims, damages or liabilities by reason of any actions arising from or relating to the Company and any actions taken or proceeding commenced by the Company (other than with respect to any Unresolved Avoidance
Claims that the Company may have against such persons other than in their capacities as officers, directors or employees of the Debtors). Indemnification must first be sought from any applicable officers and directors insurance policy,
and then from the $1.5 million reserve (the Reserve) established by EBS Pension L.L.C. As is discussed below, the former and current directors of Dave & Busters, Inc. (the D&B Third-party Defendants) have filed an
indemnification claim seeking recovery from the Reserve. There can be no assurance of the merits of such claim or the amount, if any, that the D&B Third-party Defendants will be able to recover. There can be no assurance that additional such
claims will not be made in the future. All liabilities of the Company, including the foregoing indemnification obligations, will be satisfied from the Companys assets.



At December 31, 2002, 2001, 2000, 1999, 1998 and 1997, the Company had cash and cash equivalents of approximately $778,000,
$1.2 million, $1.5 million, $1.9 million, $3.0 million and $12.0 million, respectively. At September 30, 2003, the Company had cash and cash equivalents of approximately $1.1 million. During 1997, the Company did not make any distributions to
holders of Class A Membership Units. During 1998, the Company distributed an aggregate amount of $13.7 million to holders of Class A Membership Units. During 1999, the Company distributed an aggregate amount of $0.8 million to holders of Class A
Membership Units. During 2002, 2001 and 2000, the Company made no distributions to holders of Class A Membership Units. The Company made no distributions during the nine month period ending September 30, 2003. The amount and timing of any future
distributions of Avoidance Claim Proceeds will be determined by the Manager in accordance with the terms of the Members Agreement. There can be no assurance as to the amount (if any) of any further distributions that will be made.



The Companys lawyers completed third-party discovery, including
depositions of former officers and directors of Edison, which closed on March 31, 2000, pursuant to court order. On or about March 29, 2000, the Class Representatives (D&B Stock is held by approximately 2,500 different individuals and entities
(the Class). The Class includes Barclays Global Investors, N.A., Greentree Partners, and Greenway Partners, which are referred to herein as the Class Representatives.) filed a third-party complaint against former directors of
Edison (the Edison Third-party Defendants), former and current directors of Dave & Busters, Inc. and against Dave & Busters, Inc. (the D&B Third-party Defendants collectively with Edison Third Party Defendants, are
collectively referred to herein as the Third-party Defendants). The complaint purports to allege claims for breach of fiduciary duties, aiding and abetting breaches of fiduciary duties, and for contribution or subrogation.
Because these claims might have implicated the indemnification provisions described above, the claims were reviewed in detail by the Companys lawyers, and found to be without substantial merit. While there can be no assurances of the
Companys success, the Company has opposed joinder of these claims in the D & B Spin-off Litigation (as defined in the Plan).



10



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In June 2000, the Third-party Defendants each filed a motion to dismiss the third-party complaints
against them (Motions to Dismiss). The Company filed a joinder in those Motions to Dismiss. On August 21, 2000, the Court held a hearing on the Motions to Dismiss and other matters. By Order dated as of August 28, 2000, the Court granted
the Motions to Dismiss in part, and denied them in part. The Court dismissed the breach of fiduciary duty claims and the related claims for aiding and abetting breach of fiduciary duty, finding the claims, if any, barred by the statute of
limitations. However, the Court denied the Motion to Dismiss the purported contribution and/or subrogation claim. Because of certain inconsistencies in the Courts rulings, the Third-party Defendants moved for clarification,
reconsideration, or in the alternative, interlocutory (immediate) appeal (Motions for Reconsideration). The Company filed a limited joinder in those Motions for Reconsideration, and the Class filed its opposition. The Court granted the
motion for interlocutory appeal.



In July 2000, the Class
Representatives also filed a Motion to Amend the Order Certifying the Defendant Class (Motion to Amend). In this Motion to Amend, the Class Representatives seek to add absent class members as named class representatives. The Company
opposed this Motion to Amend on the grounds that: (i) the Class Representatives should not have been represented by Class Counsel in the Motion to Amend against absent class members; (ii) there was no showing of need to add named class
representatives; and (iii) the adding of certain absent class members as named class representatives could create unnecessary conflicts for the Companys lawyers to the substantial prejudice of the Company. Two of the proposed named class
representatives, Mellon Bank and Boston Safe Deposit, related entities, filed substantive objections to the Motion to Amend on similar grounds. On August 21, 2000, the Court heard argument on the issues presented by the Motion to Amend and took the
matter under advisement. The Court has not indicated when it will rule on the Motion to Amend.



In September 2000, the Company filed a motion with the United States Bankruptcy Court, District of Delaware to reopen the bankruptcy case of Edison Brothers Stores, Inc. for the limited purpose of extending the term
of the Company. Section 1.4 of the Companys Members Agreement limits the Companys existence to three years subject to extension(s) approved by the Bankruptcy Court for good cause shown. Therefore, the Companys existence was set to
expire on September 26, 2000 unless extended by the Bankruptcy Court. In its motion, the Company argued that the Companys members would be best served by permitting the Company to remain a going concern. The Bankruptcy Court granted the
Companys motion to extend the existence of the Company for an additional two-year term.



On January 22 and 23, 2002, the D&B Spinoff Litigation was tried before Judge Robinson in the United States District Court for the district of Delaware. The Company continues to prosecute the D&B Spinoff
Litigation vigorously, and to pursue the maximum available recoveries. While there can be no assurances as to the Companys ultimate total recovery given the uncertainties associated with litigation, at this juncture it is estimated that such
recoveries will exceed the costs of further prosecuting the D&B Spinoff Litigation.



In June and July 2002, the Company settled with two members of the Class. As a result of the settlements the Company collected approximately $210,626. There can be no assurances that other members of the Class will
settle or what the terms of any other potential settlements may be.



In September 2002, the Company filed a motion with the Bankruptcy Court to reopen the bankruptcy case of Edison Brothers Stores, Inc. for the limited purpose of extending the term of the Company. As mentioned above, Section 1.4 of the
Companys Members Agreement originally limited the Companys existence to three years subject to extension(s) approved by the Bankruptcy Court for good cause shown. In September 2002, the Bankruptcy Court granted the Companys motion
to extend the existence of the Company for an additional two-year term.



After the January 2002 trial, on September 18, 2002, the United States Court of Appeals for the Third Circuit (the Third Circuit) issued a decision of the Classs interlocutory appeal on Judge Robinsons decision
dismissing their third party claims against the Third-party Defendants. The Third Circuit reversed Judge Robinsons dismissal and remanded that portion of the case back to the District Court. No decision from that trial has been rendered.



11



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On January 10, 2003, the Bankruptcy Court approved a settlement with another member of the Class in the
amount of $615,940. The Company received payment on February 18, 2003. There can be no assurances that other members of the Class will settle or what the terms of any other potential settlements may be.



In February 2003, the District Court referred the D&B Spinoff Litigation
to mediation before a magistrate judge. Mediation began on March 28, 2003. The mediation (the Mediation) involves all claims: the Companys claim against the Class, the Classs third party claims against the Third-party
Defendants, as well as the fourth party indemnification claims brought by the D&B Third-party Defendants against the Company. There can be no assurances as to the outcome of any of the claims as a result of the Mediation.



Simultaneously with the District Courts referral to Mediation, on March
28, 2003, the Company and EBS Pension were served with a Fourth Party Complaint brought by the D&B Third-party Defendants. The Fourth Party Complaint assert that if the D&B Third-party Defendants are found liable in the Third Party claim,
then pursuant to Section 5.1(f) of the Plan establishing the Indemnification Reserve mentioned above, the Company and EBS Pension are liable to the Third-party Defendants for all costs and expenses they have incurred or will incur in connection with
the defense of the Third Party claim and with the prosecution of their Fourth Party Complaint. On May 2, 2003, the Company filed an answer to the Fourth Party Complaint on behalf of itself and EBS Pension, as codefendants, denying the allegations of
the Fourth Party Complaint. As mentioned above, the Fourth Party Complaint was also referred to Mediation. There can be no assurances as to the outcome of this Fourth Party Complaint, or the liability of the Company, if any.



The Mediation was continued at a mediation conference on August 11, 2003. As
of November 14, 2003, the Company continues to Mediate the matters mentioned above. There can be no assurances as to the outcome of the Mediation, or the liability of the Company, if any.



The Company is classified as a partnership for federal income tax purposes and, therefore, does not pay taxes. Instead, the
Members pay taxes on their proportionate share of the Companys income.



Quarterly Results



Nine Months Ended
September 30, 2003 Compared to the Nine Months Ended September 30, 2002



Total income for the nine months ended September 30, 2003 and 2002 were $621,793 and $221,129, respectively. This increase is due primarily to the collection of settlement proceeds mentioned above.



Total expenses decreased for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002 by $365,387 due primarily to a decrease in legal and accounting fees.



|Item 4. |  | Controls and Procedures
|------- |  | -----------------------



The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports
that it files or submits under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported with the time periods specified in the Securities and Exchange Commission rules and forms. Within the 90-day period prior to
filing of this report, an evaluation was carried out under the supervision and with the participation of the Companys management of the effectiveness of the Companys disclosure controls and procedures. Based on that evaluation, the
Companys management has concluded that the Companys disclosure controls and procedures are effective.



Subsequent to the date of their evaluation, there have been no significant changes in the Companys internal controls or in other factors that could
significantly affect these controls.



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---

PART II. OTHER INFORMATION



|Item 1. |  | Legal Proceedings.
|------- |  | ------------------



Other than the D&B Spinoff Litigation referenced elsewhere herein, the Company is not involved in any legal proceedings.



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



|(A) |  | Exhibits |  | Description                                                         
|--- |  | -------- |  | --------------------------------------------------------------------
|    |  |         
|    |  | 2.1*     |  | Amended Joint Plan of Reorganization of Edison Brothers Stores, Inc.
|    |  |         
|    |  | 3.1*     |  | EBS Litigation, L.L.C. Certificate of Formation                     
|    |  |         
|    |  | 3.2*     |  | EBS Litigation, L.L.C. Membership Agreement                         
|    |  |         
|    |  | 31       |  | Certifications                                                      



| | * | Incorporated by reference to the same numbered exhibit filed with the Registrants Registration Statement on Form 10 originally filed with the SEC on July 29, 1998 (SEC File
No. 000-24711).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | Reports on Form 8-K
| | --- | -------------------



On August 14, 2003, the Company filed a current report on Form 8-K under Item 9 (Regulation FD Disclosure) providing for the Companys Managers
certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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---

Signatures



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.



|                        |  |  |  |  |  | EBS LITIGATION, L.L.C.
|----------------------- |  |  |  |  |  | ----------------------
|                        |  |  | 
|Date: November 14, 2003 |  |  |  |  |  | /s/    PETER N.
WANG  
|                        |  |  |  |  |  |                       



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