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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 June 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 (State or other jurisdiction of incorporation or organization) |  | 13-3989964 (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 August 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.

Statement of Operations

For the Three and Six Month Periods

Ended June 30, 2003 and 2002



|                                                  |  | For the three months ended June 30, |          |   | For the six months ended June 30, |  
|------------------------------------------------- |  | ----------------------------------- | -------- | - | --------------------------------- | -
|                                                  |  | 2003                                |          |   | 2002                              |  
|                                                  |  | (unaudited)                         |          |   | (unaudited)                       |  
|Income:                                           |  |                                     |          |   |                                   |  
|Defendant payment revenue                         |  | $                                   |         |   |                                   | $
|Interest                                          |  |                                     | 2,346    |   |                                   |  
|                                                  |  |                                     |          |   |                                   |  
|Total income                                      |  |                                     | 2,346    |   |                                   |  
|                                                  |  |                                     |          |   |                                   |  
|Expenses:                                         |  |                                     |          |   |                                   |  
|Legal and accounting fees                         |  |                                     | 98,056   |   |                                   |  
|Insurance                                         |  |                                     | 17,500   |   |                                   |  
|Transfer agent and settlement administration fees |  |                                     | 11,000   |   |                                   |  
|Manager fees                                      |  |                                     | 1,313    |   |                                   |  
|Other                                             |  |                                     | 4,360    |   |                                   |  
|                                                  |  |                                     |          |   |                                   |  
|Total expenses                                    |  |                                     | 132,229  |   |                                   |  
|                                                  |  |                                     |          |   |                                   |  
|Net (loss) income                                 |  | $                                   | (129,883 | ) |                                   | $
|                                                  |  |                                     |          |   |                                   |  
|Net loss per unitbasic and diluted               |  | $                                   | (0.013   | ) |                                   | $
|                                                  |  |                                     |          |   |                                   |  



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



2



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EBS LITIGATION, L.L.C.

Balance Sheet

June 30, 2003 and December 31, 2002



|                                                                                                                |  | June 30, 2003(unaudited) |           | December 31,2002
|--------------------------------------------------------------------------------------------------------------- |  | ------------------------ | --------- | ----------------
|Assets                                                                                                          |  |                          |           |                 
|Cash and cash equivalents                                                                                       |  |                          |           |                 
|Available for general operations                                                                                |  | $                        | 1,334,161 |                 
|Prepaid insurance                                                                                               |  |                          | 16,562    |                 
|Interest receivable                                                                                             |  |                          | 727       |                 
|                                                                                                                |  |                          |           |                 
|Total assets                                                                                                    |  | $                        | 1,351,450 |                 
|                                                                                                                |  |                          |           |                 
|Liabilities                                                                                                     |  |                          |           |                 
|Accounts payable                                                                                                |  | $                        | 93,873    |                 
|                                                                                                                |  |                          |           |                 
|Accrued expenses                                                                                                |  |                          | 181,233   |                 
|                                                                                                                |  |                          |           |                 
|Total liabilities                                                                                               |  |                          | 275,106   |                 
|                                                                                                                |  |                          |           |                 
|Members equity:                                                                                                |  |                          |           |                 
|Membership Units (Class A10,000,000 authorized, issued and outstanding at June 30, 2003 and December 31,
2002) |  |                          |           |                 
|Retained earnings                                                                                               |  |                          | 1,076,344 |                 
|                                                                                                                |  |                          |           |                 
|Total members equity                                                                                           |  |                          | 1,076,344 |                 
|                                                                                                                |  |                          |           |                 
|Total liabilities and members equity                                                                           |  | $                        | 1,351,450 |                 
|                                                                                                                |  |                          |           |                 



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



3



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EBS LITIGATION, L.L.C.

Statement of Changes in Members Equity

For the Periods Ended

June 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)             |  |                       |  |                  | 428,701   |   |       |  
|                                   |  |                        |  |                  |           |   |       |  
|Balance, June 30, 2003 (unaudited) |  | 10,000,000             |  | $                | 1,076,344 |   |       | $
|                                   |  |                        |  |                  |           |   |       |  



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



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EBS LITIGATION, L.L.C.

Statement of Cash Flows

For the Six Months Ended

June 30, 2003 and 2002



|                                                                                              |  | For the six months endedJune 30, |          
|--------------------------------------------------------------------------------------------- |  | -------------------------------- | ---------
|                                                                                              |  | 2003                             |          
|                                                                                              |  | (unaudited)                      |          
|Cash flows from operating activities:                                                         |  |                                  |          
|Net income (loss)                                                                             |  | $                                | 428,701  
|Reconciliation of net income (loss) to cash flows provided by (used in) operating activities: |  |                                  |          
|Decrease in prepaid insurance                                                                 |  |                                  | 35,102   
|(Increase) decrease in interest receivable                                                    |  |                                  | (21      
|Increase in accounts payable                                                                  |  |                                  | 80,971   
|Increase in accrued expenses                                                                  |  |                                  | 11,470   
|                                                                                              |  |                                  |          
|Cash flows from operations                                                                    |  |                                  | 556,223  
|                                                                                              |  |                                  |          
|Net increase (decrease) in cash and cash equivalents                                          |  |                                  | 556,223  
|Cash and cash equivalents at beginning of period                                              |  |                                  | 777,938  
|                                                                                              |  |                                  |          
|Cash and cash equivalents at end of period                                                    |  | $                                | 1,334,161
|                                                                                              |  |                                  |          



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





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EBS Litigation, L.L.C.

Notes to Financial Statements

June 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 June 30, 2002 (unaudited), January 1, 2003 through June 30, 2003 (unaudited), April 1, 2002 through June 30, 2002 (unaudited), and April 1, 2003 through June 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, which funds 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 Busters, Inc. Spinoff Settlement
Proceeds and the L.L.C. Funding Amount. These funds will be used for general operations. Any amounts not used in general operations will be made available for future distributions to Class A Membership Unit holders.



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

June 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. 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, 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. At December 31, 1999, Edison has no Class B Membership Units outstanding.



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.



The Company has not made any
distributions to holders of Class A Membership Units since February 1, 1999.



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



On June 10 and July 2, 2002, the Company settled with two members of the Class. (D&B 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.



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.



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



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)



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EBS Litigation, L.L.C.

Notes to Financial Statements

June 30, 2003 and December 31, 2002

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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. There can be no assurances as to the outcome of the Mediation, or the liability of the Company, if any.





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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 June 30, 2003 (unaudited), April 1, 2003 through June 30, 2003 (unaudited), January 1, 2002 through
June 30, 2002 (unaudited), and April 1, 2002 through June 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 did not recover any funds for the period ended June 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 six month periods ended June 30, 2003 and 2002, the Company recognized approximately $4,298 and $7,397 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.



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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 six month periods ended June 30, 2003 and 2002, the Company had expenses of approximately $191,537 and $502,762, 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 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. (EBS Pension). 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 June 30, 2003, the Company had cash and cash equivalents of approximately $1.3 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 six month period ending June 30, 2003. The amount and timing of any future distributions of
Avoidance Claim Proceeds will be determined by the Manager in accordance with the term 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, and third-party discovery 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 and collectively with
Edison Third Party Defendants, 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 intends to oppose joinder of these claims in the D & B Spin-off Litigation (as defined in the Plan).



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



10



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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. It is anticipated that the Court will decide the case at some point in calendar year 2002. 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.



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



11



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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. 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



Six Months Ended June 30, 2003 Compared to
the Six Months Ended June 30, 2002



Total income for
the six months ended June 30, 2003 and 2002 were $620,238 and $120,523, respectively. This increase is due primarily to the collection of settlement proceeds mentioned above.



Total expenses decreased for the six months ended June 30, 2003 as compared to the six months ended June 30, 2002 by
$311,225 due primarily to a decrease in legal 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

Description2.1*

Amended Joint Plan of Reorganization of Edison Brothers Stores, Inc.3.1*

EBS Litigation, L.L.C. Certificate of Formation3.2*

EBS Litigation, L.L.C. Membership Agreement




| | * |  | 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 May 15, 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: August 14, 2003 |  |  |  | /s/    PETER N.
WANG  
|                      |  |  |  |                       



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