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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB
(Mark one)

    /X/    Quarterly Report under Section 13 or 15(d) of the Securities Exchange
           Act of 1934

           For the quarterly period ended September 30, 2005

    / /    Transition Report under Section 13 or 15(d) of the Exchange Act

           For the transition period from __________ to __________

                        Commission file number 333-112603

                            CATSKILL LITIGATION TRUST
                            -------------------------
 (Exact Name of Small Business Issuer as Specified in Its Declaration of Trust)

         DELAWARE                                     16-6547621
--------------------------------------------------------------------------------
  (State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
  Incorporation or Organization)

                       C/O CHRISTIANA BANK & TRUST COMPANY
                                1314 King Street
                           Wilmington, Delaware 19801
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (302) 888-7400
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


_--------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that Catskill  Litigation  Trust was required to file such reports),  and
(2) has been subject to such filing  requirements  for the past 90 days.

Yes /X/ No / /


Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes   / /  No  /X/

        As of November 11, 2005, 22,702,896 Units of beneficial interest were
outstanding.

        Transitional Small Business Disclosure Format (check one):
Yes / /  No  /X/





                            CATSKILL LITIGATION TRUST


                                   FORM 10-QSB


                                      INDEX

PART I - FINANCIAL INFORMATION                                                                      Page

            ITEM 1. CONDENSED FINANCIAL STATEMENTS (unaudited)

            Condensed Balance Sheet as of September 30, 2005                                         3

            Condensed Statements of Operations for the three months and nine months
            ended September 30, 2005  and for the three months ended September 30, 2004 and for
             the period January 12, 2004 (Date of Inception) to September 30, 2004                   4

            Condensed Statements of Cash Flows for the nine months ended September 30, 2005
            and for the period January 12, 2004 (Date of Inception) to September 30, 2004            5

            Notes to Condensed Financial Statements                                                 6-9

            ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                     OR PLAN OF OPERATION                                                           10-12

            ITEM 3.  CONTROLS AND PROCEDURES                                                        13

PART II - OTHER INFORMATION

            ITEM 1.  LEGAL PROCEEDINGS                                                              14

            ITEM 6.  EXHIBITS                                                                       15

SIGNATURES                                                                                          15



                                       2



                         PART I - FINANCIAL INFORMATION



ITEM 1.     FINANCIAL STATEMENTS

                               CATSKILL LITIGATION TRUST
                                CONDENSED BALANCE SHEET
                                   September 30, 2005
                                      (Unaudited)

ASSETS
   Current Assets
         Cash and cash equivalents                         $  14,333
                                                           ---------
   Total Current Assets                                       14,333
                                                           ---------
TOTAL ASSETS                                               $  14,333
                                                           =========

LIABILITIES AND TRUST DEFICIENCY
      Current Liabilities
           Accounts payable                                $ 240,977
           Line of credit-related party                      700,000
                                                           ---------
      Total Current Liabilities                            $ 940,977

     Trust Deficiency
         Units of Beneficial Interest: authorized
         22,702,896; issued and outstanding 22,702,896        40,278
         Accumulated deficit                                (966,922)
                                                           ---------
      Total Trust Deficiency                                (926,644)
                                                           ---------
TOTAL LIABILITIES AND TRUST DEFICIENCY                     $  14,333
                                                           =========


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



                                       3



                            CATSKILL LITIGATION TRUST
                       CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

                                                                                                             For the Period from
                                                  For the               For the              For the           January 12, 2004
                                            Three Months Ended     Three Months Ended     Nine Months Ended  (Date of Inception) to
                                            September 30, 2005     September 30, 2004    September 30, 2005     September 30, 2004

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

General and Administrative Expenses:
Litigation Trustee Fees                       $     30,000          $     30,000         $     90,000          $     86,130
Administrative Trustee Fees                          1,500                 1,500                4,500                 9,000
Consulting Fees                                      1,500                 6,090                4,500                14,233
Legal Fees                                         119,363                75,336              395,735               168,333
Accounting Fees                                      7,000                 7,870               31,750                17,140
Interest Expense                                    13,689                 3,438               28,562                 6,866
Other                                                4,654                 1,167                8,396                 3,083
                                              ------------          ------------         ------------          ------------
Total General and Administrative Expenses     $    177,706          $    125,401         $    563,443          $    304,785
Other Income                                           199                   217                1,581                   492
                                              ------------          ------------         ------------          ------------
Net Loss                                      $   (177,507)         $   (125,184)        $   (561,862)         $   (304,293)
                                              ============          ============         ============          ============
Loss per unit outstanding                     $      (0.01)         $      (0.01)        $      (0.02)         $      (0.01)
                                              ============          ============         ============          ============
Units outstanding                               22,702,896            22,702,896           22,702,896            22,702,896
                                              ============          ============         ============          ============



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



                                       4






                            CATSKILL LITIGATION TRUST
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                                                                            For the Period
                                                                                For the                   January 12, 2004
                                                                           Nine Months Ended            (Date of Inception) to
                                                                           September 30, 2005             September 30, 2004
                                                                           ------------------            ---------------------
OPERATING ACTIVITIES
Net Loss                                                                       $(561,862)                     $(304,293)
   Adjustments to reconcile net loss to net cash used in operations:
      Imputed interest expense                                                    28,562                          6,866
      Accounts Payable                                                           156,855                         41,375
      Accrued legal and administrative expenses                                  (31,715)                        75,000
                                                                               ---------                      ---------
Net cash used in operating activities                                          $(408,160)                     $(181,052)

Cash flow from financing activities
      Increase in line of credit-related party                                   200,000                        250,000
                                                                               ---------                      ---------
(Decrease) Increase in Cash and Equivalents                                    $(208,160)                     $  68,948

Cash and Equivalents-beginning of period                                         222,493                           --
                                                                               ---------                      ---------
Cash and Equivalents- end of period                                            $  14,333                      $  68,948


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


                                       5



                            CATSKILL LITIGATION TRUST

     Notes to Condensed Financial Statements--September 30, 2005 (Unaudited)

NOTE 1 - THE TRUST

          The  Catskill  Litigation  Trust is a  Delaware  statutory  trust (the
          "Litigation Trust") formed by Empire Resorts, Inc. ("Empire Resorts"),
          Monticello  Raceway  Management,  Inc.,  ("MRMI"),  Monticello  Casino
          Management,  L.L.C.,  Monticello Raceway Development  Company,  L.L.C.
          ("MRDC")  and Mohawk  Management,  L.L.C.  ("Mohawk").  On January 12,
          2004,  22,702,896  units of  beneficial  interest  were  issued to the
          members  and  stockholders  of those  entities.  At that time,  Empire
          Resorts,  Catskill  Development,  L.L.C.  ("Catskill"),  MRMI, Mohawk,
          Joseph E. Bernstein, Paul A. deBary (Messrs.  Bernstein and deBary are
          hereinafter  referred to as the "Litigation  Trustees") and Christiana
          Bank and Trust Company (the "Administrative Trustee") entered into the
          Declaration of Trust of Catskill Litigation Trust (the "Declaration of
          Trust").

          In the Declaration of Trust, Catskill, MRDC and Mohawk assigned to the
          Litigation  Trust  all  of  their  claims  under  or  related  to  the
          alienation and frustration of their agreements and business  relations
          with the St.  Regis  Mohawk  Tribe and their rights to any judgment or
          settlement  that  may  arise  from  any  litigation  relating  to  two
          litigations entitled Catskill  Development,  L.L.C., Mohawk Management
          L.L.C. and Monticello Raceway Development  Company L.L.C.,  Plaintiffs
          v. Park Place  Entertainment  Corporation,  Defendant (the "PPE Case")
          and  Catskill   Development,   L.L.C.,   Mohawk  Management,   L.L.C.,
          Monticello Raceway  Development  Company,  L.L.C.,  Plaintiffs v. Gary
          Melius,  Ivan  Kaufman,  Walter  Horn,  President  R.C.  -  St.  Regis
          Management  Company,  et  al,  Defendants  (hereinafter  referred  to,
          collectively with the PPE case, as the  "Litigation").  If at any time
          the Litigation Trustees determine, in their absolute discretion,  that
          the assets of the  Litigation  Trust are not sufficient to justify its
          continuance,  the Litigation  Trustees are authorized to terminate the
          Litigation Trust. In addition, the Litigation Trust is to terminate on
          the  date  that all  litigation  has been  fully  prosecuted  to final
          judgment or dismissal, including all appeals, and all Litigation Trust
          assets have been distributed to the Litigation Trust's beneficiaries.

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          BASIS OF PRESENTATION

          These condensed financial  statements have been prepared in accordance
          with accounting  principles generally accepted in the United States of
          America ("GAAP"),  and with Form 10-QSB and Item 310 of Regulation S-B
          of the  Securities  and  Exchange  Commission.  In the  opinion of the
          Litigation Trustees,  the accompanying  condensed financial statements
          contain  all the  adjustments  necessary  (consisting  only of  normal
          recurring  accruals) for a fair presentation.  The interim results are
          not  necessarily  indicative of the results that would be expected for
          the full  year and do not  contain  all  information  included  in our
          annual financial  statements and notes for the year ended December 31,
          2004.

          Certain  information  and footnote  disclosures  normally  included in
          financial statements prepared in accordance with accounting principles
          generally accepted in the United States of America have been condensed
          or omitted. It is suggested that these financial statements be read in
          conjunction  with the audited  financial  statements and notes thereto
          included in the report on Form 10-KSB for the period  January 12, 2004
          (date of inception) to December 31, 2004.



                                       6


          USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

          The preparation of financial  statements in conformity with accounting
          principles generally accepted in the United States of America requires
          the Litigation  Trustees to make estimates and assumptions that affect
          the  reported  amounts of assets and  liabilities  and  disclosure  of
          contingent  assets  and  liabilities  at the  date  of  the  financial
          statements  and the reported  amounts of revenues and expenses  during
          the  reporting   period.   Actual  results  could  differ  from  those
          estimates.

          CASH AND CASH EQUIVALENTS

          Cash and cash equivalents include cash on account, demand deposits and
          certificates  of deposit with  original  maturities of three months or
          less at  acquisition  and money market funds.  From time to time,  the
          Litigation Trust maintains  significant cash balances in excess of the
          amounts  covered by the Federal  Deposit  Insurance  Corporation.  The
          Litigation  Trust has not incurred any losses in such accounts and the
          Litigation  Trustees  believe  it is not  exposed  to any  significant
          credit risk on cash.


          INCOME TAXES

          For federal income tax purposes,  the Litigation Trust is treated as a
          grantor trust. Under the grantor trust rules, each holder of a unit of
          beneficial interest is treated as the owner of his or her share of the
          Litigation  Trust's assets.  The treatment of income and expense items
          under GAAP may differ from the tax  treatment of such items.  Expenses
          incurred by the Litigation Trust are capitalized for tax purposes.

NOTE 3 - LINE OF CREDIT-RELATED PARTY

          Empire  Resorts,  a related party,  has provided the Litigation  Trust
          with a line of credit of up to  $2,500,000.  The line of credit can be
          used to pay all expenses of the Litigation  Trust  permitted under the
          Declaration of Trust,  including but not limited to professional  fees
          and  the  fees  and  expenses  of the  Litigation  and  Administrative
          Trustees.  The line of credit  is  non-interest  bearing  and is to be
          repaid  from any  amounts  received  from  litigation  settlements  or
          awards.  The  line of  credit  expires  upon  the  termination  of the
          Litigation Trust.

          As of September 30, 2005,  $700,000 had been drawn against the line of
          credit. On October 11, 2005, an additional  $150,000 was drawn against
          the line of credit.

          The  Litigation  Trust  imputed  interest on the  borrowings at Empire
          Resorts' borrowing rate (8.00% per annum at September 30, 2005). Prior
          to July 1, 2005,  Empire Resorts'  borrowing rate was 5.50%.  Interest
          expense for the three months ended  September  30, 2005 and  September
          30,  2004  amounted  to $13,689  and  $3,438,  respectively.  Interest
          expense  for the nine  months  ended  September  30,  2005 and for the
          period  January 12, 2004 (date of  inception)  to  September  30, 2004
          amounted to $28,562 and $6,866, respectively. Imputed interest expense
          is deemed contributed capital to the Litigation Trust.

NOTE 4 - DISTRIBUTIONS

          The  distribution of any net proceeds from  litigation  settlements or
          awards,  after  amounts  are  applied to cover all current or expected
          expenses of the Litigation Trust, is to be made at the sole discretion
          of the Litigation Trustees and will be distributed as follows:



                                       7


          First:  To  pay  the  Litigation  Trustees  their  fees  arising  from
          litigation settlements or awards. (See Note 5)

          Second:  To  reimburse  $7,500,000  to  Empire  Resorts  for  expenses
          incurred in connection  with the Litigation  prior to the formation of
          the  Litigation  Trust and, in addition,  to repay Empire  Resorts any
          amounts outstanding under the line of credit.

          Third:  If any amount  remains after the above  requirements  are met,
          such amount remaining is to be divided among the  beneficiaries of the
          Litigation  Trust in proportion to their  ownership of units as of the
          date the distribution is made.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

          COMPENSATION OF LITIGATION TRUSTEES

          Each of the two Litigation Trustees is entitled to annual compensation
          of $60,000 plus  reimbursement of expenses  incurred  carrying out the
          purpose of the Litigation Trust. In addition,  one litigation  trustee
          is entitled to 4.0%, and the other 1.0%, of any litigation settlements
          or awards.

          COMPENSATION OF THE ADMINISTRATIVE TRUSTEE

          The  Administrative  Trustee is  entitled to a $5,000  acceptance  fee
          (which  includes  the first  month  administrative  fee) and a monthly
          administrative fee of $500. In addition, the Administrative Trustee is
          entitled  to a custody fee on certain  cash  balances  and  marketable
          securities  of 0.5% per annum on the first  $10,000,000  of fair value
          and  3.0%  on the  excess  and  reimbursement  for  certain  fees  and
          expenses.

          EXPENSES PAID PRIOR TO THE FORMATION OF THE LITIGATION TRUST

          As  discussed in Note 4, the  Litigation  Trust is obligated to pay to
          Empire  Resorts up to  $7,500,000.  This  amount  represents  expenses
          incurred prior to the formation of the Litigation Trust. The amount is
          payable solely from the proceeds of litigation settlements or awards.

          REPAYMENTS OF AMOUNTS DRAWN UNDER THE LINE OF CREDIT-RELATED PARTY

          As  discussed  in Note 4, the  expenses  of the  Litigation  Trust are
          expected to be paid from draws under the line of credit. Amounts drawn
          under the line of credit are to be repaid  from any  amounts  received
          from litigation settlements or awards.

          ADDITIONAL AMOUNTS PAYABLE TO APPEALS COUNSEL

          Under the terms of the  Litigation  Trust's  arrangement  with the law
          firm handling its appeal,  additional fees in an aggregate  amount not
          to exceed $100,000 may be payable to that firm.

          The exact amount payable in the event of a reversal of the decision by
          the trial court will vary from  $50,000 to $100,000  depending  on the
          precise nature of the outcome.




                                       8


NOTE 6 - CERTAIN RELATIONSHIPS

          The Litigation  Trustees are both currently members of Empire Resorts'
          Board of Directors.



NOTE 7 - SUBSEQUENT EVENTS

          Following the re-entry of an adverse  judgment with respect to the PPE
          Case  in the  District  Court  in the  fourth  quarter  of  2004,  the
          Litigation Trust recommenced an appeal to the Court of Appeals for the
          Second Circuit. The appellant's brief in the appeal was filed on April
          1, 2005.  In preparing  the brief on appeal,  the  Litigation  Trust's
          counsel  became  aware of a case that was decided  shortly  before the
          plaintiffs brought the original complaint.  The effect of this case is
          that  jurisdiction  may not be  found to  exist  for two of the  three
          plaintiff  entities.  We have made the Court of Appeals  aware of this
          circumstance.  If the Court  determines  that the federal  courts lack
          jurisdiction  over these  plaintiffs,  they may be  required to pursue
          their claims in the New York courts.  This could  increase the expense
          involved, and result in additional delay, in prosecuting their claims.
          The  respondent's  brief was filed on June 9, 2005 and the appellant's
          reply brief was filed on July 12, 2005.  Oral  arguments on the appeal
          were heard on October 17, 2005. At that time,  one member of the panel
          questioned  whether  there  were  factual  issues  that  needed  to be
          determined  before the  jurisdictional  issues could be resolved.  The
          Litigation Trust's attorneys took the position that there were not and
          this  was  not  contradicted  by the  attorneys  for  the  defendants.
          However,  a return of the case to the  District  Court for  additional
          findings on jurisdiction  could result in some additional  expense for
          the Litigation Trust and also, possibly, significant delay. Barring an
          interim  decision on  jurisdiction,  it is unlikely that a decision on
          the appeal will be issued prior to the first quarter of 2006.



                                       9


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-Looking Statements

        This Report on Form 10-QSB contains "forward-looking  statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements  other than  statements of historical  facts included in this Report,
including without limitation, the statements under "General," and "Liquidity and
Capital Resources," are forward-looking  statements.  All subsequent written and
oral forward-looking  statements attributable to the Litigation Trust or persons
acting on its behalf are expressly qualified in their entirety by the cautionary
statements.

        The  following  discussions  should  be read  in  conjunction  with  our
financial   statements  and  the  related  notes  thereto  and  other  financial
information  appearing  elsewhere  in  this  report.  The  following  discussion
contains  forward-looking  statements that involve risks and uncertainties.  Our
actual  results  could  differ   materially   from  those   anticipated  in  the
forward-looking  statements  as a result of  various  factors,  including  those
discussed elsewhere in this report.

General

        We are a statutory trust created under Delaware law. Our formation was a
condition to the  consolidation  of Empire  Resorts,  Inc.  ("Empire  Resorts"),
Monticello Raceway  Management,  Inc.,  ("MRMI"),  Monticello Casino Management,
L.L.C.  ("MCM"),  Monticello Raceway Development  Company,  L.L.C.  ("MRDC") and
Mohawk Management, L.L.C. ("Mohawk"). Also as a condition to that consolidation,
each of Catskill Development,  L.L.C. ("Catskill"),  MRDC, and Mohawk, agreed to
assign  to us all of  their  claims  under  or  related  to the  alienation  and
frustration of their agreements and business relations with the St. Regis Mohawk
Tribe.  That  assignment  included rights to any proceeds from any settlement or
award that may arise from any  litigation  relating to that claim.  We currently
maintain a web site at  www.catskilltrust.com  to facilitate  communications and
provide a convenient  source of more detailed  information for our  unit-holders
and other interested parties.

        Our litigation claims arise from the efforts of each of Catskill,  MRDC,
and  Mohawk  to  develop  with the St.  Regis  Mohawk  Tribe a gaming  casino in
Monticello,  New York. The plaintiffs spent several years and substantial  funds
to develop and obtain  required  approvals  for the casino.  Subsequently,  Park
Place  Entertainment  Corporation,  the world's  largest gaming  corporation and
Atlantic City's largest casino operator, entered into an agreement providing for
the St. Regis Mohawk Tribe to commit  their future  casino  development  efforts
exclusively to Park Place Entertainment  Corporation.  That agreement conflicted
with the Mohawk Tribe's agreements with Catskill, MRDC and Mohawk.

        There is one lawsuit pending and one lawsuit that has been discontinued.
The first lawsuit is Catskill Development,  L.L.C.,  Mohawk Management,  L.L.C.,
and Monticello Raceway Development Company,  L.L.C.,  Plaintiffs.  v. Park Place
Entertainment  Corporation,  Defendant.  (Civil Action No. 00CIV8660 (CM) (GAY))
(United States District Court Southern  District of New York) referred to herein
as the "PPE case".  This lawsuit had  initially  been  dismissed on a motion for
summary  judgment.  However,  the trial court  subsequently  vacated the earlier
decision  granting  summary  judgment to Park Place  Entertainment,  in order to
consider new evidence and allow additional  discovery  proceedings.  After these
proceedings  were completed,  the dismissal was  reinstated.  An appeal has been
taken and a brief has been filed by the Litigation Trust. The respondent's brief
was filed on June 9, 2005 and the  Litigation  Trust's  reply brief was filed on
July 12, 2005.  Oral  arguments on the appeal were heard on October 17, 2005. It
is  unlikely  that a decision  on the appeal  will be issued  prior to the first
quarter of 2006.  The second  lawsuit is Catskill  Development,  L.L.C.,  Mohawk
Management,   L.L.C.,  and  Monticello  Raceway  Development  Company,   L.L.C.,
Plaintiffs against Gary



                                       10


Melius,  Ivan  Kaufman,  Walter  Horn,  President  R.C. - St.  Regis  Management
Company,  et al,  Defendants.  (Index No. 891/03) (Supreme Court of the State of
New York  County of  Sullivan).  This  lawsuit  has been  discontinued  under an
agreement that permits it to be refiled at a future date without being barred by
the statute of  limitations.  Our purposes are the prosecution of our litigation
claims  through  the  recovery  of any  settlement  or final  judgments  and the
distribution of the net amount of any such recoveries to our beneficiaries.

        The   administration   of  our   Litigation   Trust  will   involve  the
authentication  and payment of fees and expenses for legal and related  services
in connection with our litigation  claims,  reporting and regulatory  compliance
and  the  maintenance  of  litigation,   financial  and   unit-holder   records.
Administrative expenses are currently estimated to be approximately $200,000 per
year, including the fees of the litigation and administrative trustees, auditors
and  accountants  and other  support  services.  Legal  fees and other  expenses
involved in our  litigation  claims are impossible to predict with any degree of
accuracy.  No  assurance  can be given that the amounts  available to us for the
payment of such  expenses  under our line of credit will be  sufficient to carry
our  litigation  claims through to a successful  conclusion or that  alternative
funds will be available for such purpose.

        Our  unit-holders  will only be  entitled to the net  proceeds  from any
settlement or award,  if any, of our litigation  claims after the payment of our
expenses, the fees of our litigation trustees, any amounts outstanding under our
line of credit and  $7,500,000  to Empire  Resorts  for  reimbursement  of prior
expenses incurred in connection with our litigation claims.


RESULTS OF OPERATIONS

For the three  months  ended  September  30,  2005,  we  reported  a net loss of
$177,507.  Included  in these net losses are legal  fees of  $119,363  (of which
legal fees related to litigation were $107,362),  and administrative expenses of
$58,343, offset by dividend income of $199, but no proceeds from any litigation.
For the three  months  ended  September  30,  2004,  we  reported  a net loss of
$125,184.  Included  in this net loss are legal fees of  $75,336  (of which only
$336 related to litigation),  and  administrative  expenses of $50,065 offset by
dividend income of $217, but no proceeds from any litigation.

For the  nine  months  ended  September  30,  2005,  we  reported  a net loss of
$561,863.  Included  in these net losses are legal  fees of  $395,735  (of which
legal fees related to litigation were $362,950),  and administrative expenses of
$164,493,  offset  by  dividend  income  of  $1,580,  but no  proceeds  from any
litigation. For the period January 12, 2004 (Date of Inception) to September 30,
2004,  we reported a net loss of  $304,293.  Included in this net loss are legal
fees of $168,333  ($93,333 of which related to litigation),  and  administrative
expenses of $136,452 offset by dividend income of $492, but no proceeds from any
litigation.

The increase in legal fees related to litigation  reflects the activity involved
in connection with our appeal to the 2nd Circuit. During the first six months of
2004, the Litigation  Trust incurred only limited expenses related to litigation
because  Judge  McMahon  was  waiting  for a  decision  by the New York Court of
Appeals prior to rendering  her  decision.  Following the re-entry of an adverse
judgment  with  respect  to the PPE case in the  District  Court  in the  fourth
quarter of 2004, the Litigation  Trust  recommenced its appeal.  The results for
the second and third  quarters of 2005  reflect  the  increased  legal  expenses
relating  to  litigation  due to the  preparation  of  briefs  for  the  appeal,
including matters relating to a new jurisdictional issue. In preparing the brief
on appeal,  our counsel  became aware of a case that was decided  shortly before
the plaintiffs brought the original  complaint.  The effect of this case is that
jurisdiction may not be found to exist for two of the three plaintiff  entities.
We have  made the  Court of  Appeals  aware of this  circumstance.  If the Court
determines that the federal courts lack jurisdiction over these plaintiffs, they
may be  required  to pursue  their  claims in the



                                       11


New York  courts.  This  could  increase  the  expense  involved,  and result in
additional delay, in prosecuting their claims.  Administrative expenses declined
in the first six months of 2005 due to a fix fee agreement  reached with the law
firm that handles general administrative legal work for the Litigation Trust and
a  decline  in  expenses  related  to the  filing  of  registration  statements,
supplements  and  prospectuses  with the Securities  and Exchange  Commission in
connection with the initial distributions of trust units. General administrative
expenses  increased  slightly in the second quarter of 2005 as compared with the
first quarter of 2005 due to expenses  associated with the  implementation  of a
web site for the benefit of our unit-holders.

Under our  agreement  with  counsel  arguing the  appeal,  a portion of the fees
related to arguing the appeal will be contingent on the resulting decision. As a
result, we do not currently expect  significant  additional  expenses related to
the appeal.  We also do not expect the  additional  expenses  related to a trial
(which is itself  dependent  on the  outcome of the  appeal)  until at least the
first  quarter of 2006.  However,  should the 2nd Circuit  determine  to request
additional  findings  of  fact  with  respect  to  jurisdiction,  we  may  incur
additional expenses relating to the appeal in the fourth quarter of 2005.

On June 1, 2004, we filed a Voluntary Discontinuance and Tolling Agreement with
respect to the second lawsuit. Since there are many issues of fact and law in
the PPE case which relate to matters that are also at issue in the second
lawsuit, we believe that, as long as the right to recommence the suit without
regard to the statute of limitations was preserved, the discontinuance of this
suit was appropriate in order to avoid the cost of maintaining two separate
lawsuits.


LIQUIDITY AND CAPITAL RESOURCES

        Empire Resorts has provided us with an irrevocable  line of credit of up
to  $2,500,000  to provide  funds to pay any and all of our  expenses  permitted
under the  Declaration  of Trust.  Although  no  interest  is payable on amounts
advanced under our line of credit., the Litigation Trust imputes interest on the
borrowings  at Empire  Resorts  borrowing  rate (8% per annum at  September  30,
2005).  Amounts outstanding under our line of credit are to be repaid by us from
proceeds received from any settlement or award in connection with our litigation
claims after payment of an amount  necessary to pay our Litigation  Trustees the
fees for their services as set forth in the Declaration of Trust.  Repayments of
amounts  outstanding  under our line of credit may be made as a whole or in part
from time to time at any time  without  notice.  We may  reborrow any amounts so
repaid.  Our line of credit  will  remain in full  force  and  effect  until our
termination

        Empire  Resorts is a holding  company,  owning all the capital  stock or
membership  interests of certain  other  entities.  Empire  Resorts is therefore
dependent  on these other  entities to pay  dividends or make  distributions  in
order to generate  internal cash flow and to satisfy its obligations,  including
its obligations  under our line of credit.  There can be no assurance,  however,
that these other entities will generate  enough revenue to pay cash dividends or
make cash  distributions.  In addition,  these entities may enter into contracts
that limit or prohibit their ability to pay dividends or make distributions.

        Empire  Resorts had no  operating  revenue  during the fiscal year ended
December  31, 2003 and  operating  revenue of $44.9  million for the fiscal year
ended December 31, 2004 and $23.2 million for the six months ended June 30, 2005
and  sustained  net  operating  losses  of  approximately  $8.0,  $12.7 and $5.6
million,   respectively,   during  such   periods.   Although   Empire   Resorts
significantly  increased  its level of  operations  during  the third and fourth
quarters of 2004 and the first two quarters of 2005,  it has yet to  demonstrate
that such  operations  can be profitable.  Therefore,  there can be no assurance
that Empire Resorts will have the ability to meet its obligations under our line
of credit.



                                       12


ITEM 3.  CONTROLS AND PROCEDURES

(a) The Litigation  Trust carried out an evaluation,  under the  supervision and
with the participation of the Litigation Trust's management, including Joseph E.
Bernstein  (acting  Chief  Executive  Officer) and Paul A. deBary  (acting Chief
Financial  Officer),   the  Litigation  Trust's  Litigation  Trustees,   of  the
effectiveness of the design and operation of the Litigation Trust's  "disclosure
controls and procedures",  as such term is defined in Exchange Act Rule 15d-15e,
as of the end of the period covered by this report.  Based upon that evaluation,
Messrs.  Bernstein  and  deBary  have  concluded  that  the  Litigation  Trust's
disclosure  controls and procedures  were effective as of the end of the periods
covered by this report to provide reasonable assurance that information required
to be  disclosed  by the  Litigation  Trust in reports  that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods specified in SEC rules and forms.

(b) There have been no significant  changes in the Litigation  Trust's  internal
controls or in other  factors  that could  significantly  affect the  Litigation
Trust's  internal  controls  subsequent to the date the Litigation Trust carried
out this evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

        A control system, no matter how well conceived and operated, can provide
only  reasonable,  not absolute  assurance  that the  objectives  of the control
system are met. Because of the inherent  limitations in all control systems,  no
internal  controls can provide  absolute  assurance  that all control issues and
instances of fraud, if any, within a company have been detected.



                                       13


PART  I -   OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

        We are a statutory trust created under Delaware law. Our formation was a
condition to the  consolidation  of Empire  Resorts with MRMI,  MCM,  MRDC,  and
Mohawk.  Also as a condition to that consolidation,  each of Catskill,  MRDC and
Mohawk,  agreed to  assign to us all of their  claims  under or  related  to the
alienation and frustration of their  agreements and business  relations with the
St. Regis Mohawk Tribe. That assignment included rights to any proceeds from any
settlement or award that may arise from any  litigation  relating to that claim.
Our  litigation  claims  arise from the  efforts of each of  Catskill,  MRDC and
Mohawk to develop with the St. Regis Mohawk Tribe a gaming casino in Monticello,
New York.  We spent several  years and  substantial  funds to develop and obtain
required  approvals  for the  casino.  Subsequently,  Park  Place  Entertainment
Corporation,  the world's largest gaming corporation and Atlantic City's largest
casino  operator,  entered into an agreement  providing for the St. Regis Mohawk
Tribe to commit their future  casino  development  efforts  exclusively  to Park
Place  Entertainment  Corporation.  That  agreement  conflicted  with the Mohawk
Tribe's agreements with Catskill MRDC and Mohawk.

        There  is one  lawsuit  now  pending  and  one  lawsuit  that  has  been
discontinued.  The  first  lawsuit  is  Catskill  Development,   L.L.C.,  Mohawk
Management,   L.L.C.,  and  Monticello  Raceway  Development  Company,   L.L.C.,
Plaintiffs. v. Park Place Entertainment  Corporation,  Defendant.  (Civil Action
No. 00CIV8660  (CM)(GAY)) (United States District Court Southern District of New
York).  This  lawsuit  had  initially  been  dismissed  on a motion for  summary
judgment. However, the trial court vacated the earlier decision granting summary
judgment to Park Place  Entertainment,  in order to allow  consideration  of new
evidence and  additional  discovery  proceedings.  Following  those  proceedings
judgment in favor of the defendant was reinstated.  An appeal has been taken and
briefs  have been  filed by the  Litigation  Trust.  In  preparing  the brief on
appeal,  our counsel became aware of a case that was decided  shortly before the
plaintiffs  brought  the  original  complaint.  The  effect of this case is that
jurisdiction may not be found to exist for two of the three plaintiff  entities.
We have  made the  Court of  Appeals  aware of this  circumstance.  If the Court
determines that the federal courts lack jurisdiction over these plaintiffs, they
may be  required  to pursue  their  claims in the New York  courts.  This  could
increase the expense  involved,  and result in additional  delay, in prosecuting
their  claims.  The  respondent's  brief  was  filed  on  June 9,  2005  and the
Litigation Trust's reply brief was filed on July 12, 2005. Oral arguments on the
appeal were heard on October  17,  2005.  At that time,  one member of the panel
questioned whether there were factual issues that needed to be determined before
the  jurisdictional  issues could be resolved.  The Litigation Trust's attorneys
took the  position  that  there  were not and this was not  contradicted  by the
attorneys  for the  defendants.  However,  a return of the case to the  District
Court for additional  findings on  jurisdiction  could result in some additional
expense for the Litigation Trust and also, possibly,  significant delay. Barring
an interim  decision  on  jurisdiction,  it is  unlikely  that a decision on the
appeal will be issued prior to the first quarter of 2006.

        The second lawsuit is Catskill  Development,  L.L.C., Mohawk Management,
L.L.C., and Monticello Raceway Development Company, L.L.C., Plaintiffs.  against
Gary Melius,  Ivan Kaufman,  Walter Horn,  President R.C. - St. Regis Management
Company,  et al,  Defendants.  (Index No. 891/03) (Supreme Court of the State of
New York  County of  Sullivan).  This  lawsuit  has been  discontinued  under an
agreement that permits it to be refiled at a future date without being barred by
the statute of  limitations.  Our purposes are the prosecution of our claims now
through the recovery of any settlement or final  judgments and the  distribution
of the net amount of any such recoveries to our beneficiaries.



                                       14


ITEM 6.  EXHIBITS

a:  Exhibits

          *31.1  Certification  of Acting Chief  Executive  Officer  pursuant to
                 Section 302 of the Sarbanes-Oxley Act of 2002.

          *31.2  Certification  of Acting Chief  Financial  Officer  pursuant to
                 Section 302 of the Sarbanes-Oxley Act of 2002.

          *32.1  Certification of the Acting Chief Executive Officer pursuant to
                 18  U.S.C.  Section  1350  adopted  pursuant  to  Section  906
                 of the Sarbanes-Oxley Act of 2002.

          *32.2  Certification of the Acting Chief Financial Officer pursuant to
                 18  U.S.C.  Section  1350  adopted  pursuant  to  Section  906
                 of the Sarbanes-Oxley Act of 2002.

          *Filed herewith



                                   SIGNATURES

        In  accordance  with the  requirements  of the  Exchange  Act,  Catskill
Litigation  Trust  caused  this  report  to be  signed  on  its  behalf  by  the
undersigned, thereunto duly authorized.


                                           CATSKILL LITIGATION TRUST
                                           (Registrant)


DATE:  November 11, 2005                    By: /s/ Joseph E. Bernstein
                                              ----------------------------------
                                              Joseph E. Bernstein
                                              Litigation Trustee



DATE:  November 11, 2005                    By: /s/ Paul A. deBary
                                              ----------------------------------
                                              Paul A. deBary
                                              Litigation Trustee

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