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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 June 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 / /

As of August 15, 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 June 30, 2005                              3

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

     Condensed Statements of Cash Flows for the period six months
     ended June 30, 2005 and for the period January 12, 2004
     (Date of Inception) to June 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                                     12-13

PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS                                              14

     ITEM 6.  EXHIBITS                                                       14

SIGNATURES                                                                   15

                                       2




                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

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

ASSETS
   Current Assets
         Cash and Cash Equivalents                                    $  48,870
                                                                      ---------
   Total Current Assets                                                  48,870
                                                                      ---------
TOTAL ASSETS                                                          $  48,870
                                                                      =========

LIABILITIES AND TRUST DEFICIENCY
      Current Liabilities
           Accrued legal and administrative expenses                  $  76,960
           Accounts Payable                                              84,735
           Line of credit-related party                                 650,000
                                                                      ---------
      Total Current Liabilities                                       $ 811,695
Trust Deficiency
      Units of Beneficial Interest: authorized
      22,702,896; issued and outstanding 22,702,896                      26,590
      Accumulated deficit                                              (789,415)
                                                                      ---------
      Total Trust Deficiency                                           (762,825)
                                                                      ---------
TOTAL LIABILITIES AND TRUST DEFICIENCY                                $  48,870
                                                                      =========


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   Six Months Ended    (Date of Inception)
                                               June 30, 2005        June 30, 2004       June 30, 2005       June 30, 2004
                                              ------------------------------------------------------------------------------

General and Administrative Expenses:
Litigation Trustee Fees                       $     30,000      $     30,000           $     60,000         $     56,130
Administrative Trustee Fees                          1,500             1,500                  3,000                7,500
Consulting Fees                                      1,500             5,000                  3,000               11,000
Legal Fees                                         120,122            12,109                276,372               83,314
Accounting Fees                                     14,750             9,270                 24,750               26,453
Interest                                             7,998             3,428                 14,873                3,428
Other                                                1,555             3,341                  3,742                4,331
                                              --------------------------------------------------------------------------
Total General and Administrative Expenses     $    177,425      $     64,648           $    385,737         $    192,156
Other Income                                           428               276                  1,382                  276
                                              --------------------------------------------------------------------------
Net Loss                                      $   (176,997)     $    (64,372)          $   (384,355)        $   (191,880)
                                              ==========================================================================
Loss per unit outstanding                     $      (0.01)     $      (0.00)          $      (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 STATEMENT OF CASH FLOWS
                                                   (Unaudited)
                                                                                               For the
                                                                                             Period from
                                                                            For the        January 12, 2004
                                                                       Six Months Ended    (Date of Inception)
                                                                         June 30, 2005        June 30, 2004
                                                                     -----------------------------------------
OPERATING ACTIVITIES
Net Loss                                                                 $(384,355)            $(191,880)
   Adjustments to reconcile net loss to net cash used in operations:
      Imputed interest expense                                              14,873                 3,428
      Increase in Accounts Payable                                             614                  --
      Increase in accrued legal and administrative expenses                 45,245                90,370
                                                                         -------------------------------
Net cash used in operating activities                                    $(323,623)            $ (98,082)

Cash flow provided by financing activities
      Increase in line of credit-related party                             150,000               250,000
                                                                         -------------------------------
(Decrease) Increase in Cash and Cash Equivalents                         $(173,623)            $ 151,918
                                                                         -------------------------------
Cash and Cash Equivalents-beginning of period                            $ 222,493             $    --
                                                                         -------------------------------
Cash and Cash Equivalents- end of period                                 $  48,870             $ 151,918
                                                                         ===============================

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

                                                       5





                            CATSKILL LITIGATION TRUST

       Notes to Condensed Financial Statements--June 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  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  that are not
         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 as the  Litigation  Trust  generally  does not maintain  high cash
         balances for any significant period.

         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 will be 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 June 30,  2005,  $650,000  had  been  drawn  against  the line of
         credit.  On July 28, 2005, an additional  $50,000 was drawn against the
         line of credit.

         The  Litigation  Trust  imputed  interest on the  borrowings  at Empire
         Resorts'  borrowing  rate (5.50% per annum at June 30, 2005).  Interest
         expense  for the three  months  ended June 30,  2005 and June 30,  2004
         amounted to $7,998 and $3,428,  respectively.  Interest expense for the
         six months  ended June 30,  2005 and for the period  January  12,  2004
         (date of  inception)  to June 30, 2004  amounted to $14,873 and $3,428,
         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:

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

                                       7





         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%,  and the other 1%, 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 .5% per annum on the first  $10,000,000 of fair value and
         3% 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.


NOTE 6 - CERTAIN RELATIONSHIPS

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

                                       8





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.  It is not  likely  that the
         appeal will be scheduled for oral arguments prior to October of 2005 or
         that a decision in 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. It is not likely that
the appeal will be scheduled for oral arguments prior to late October of 2005 or
that a decision in the appeal will be issued prior to the first quarter of 2006.

                                       10





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 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 June 30,  2005,  we reported a net loss of $176,997.
Included  in these net losses are legal fees of  $120,122  (of which  legal fees
related to litigation were $107,622),  and  administrative  expenses of $57,303,
offset by dividend income of $428, but no proceeds from any litigation.  For the
three months ended June 30, 2004, we reported a net loss of $64,372. Included in
this net loss are legal fees of $12,109  (all of which  related to  litigation),
and administrative expenses of $52,539 offset by dividend income of $276, but no
proceeds from any litigation.

For the six months  ended June 30,  2005,  we  reported a net loss of  $384,355.
Included  in these net losses are legal fees of  $276,372  (of which  legal fees
related to litigation were $251,372),  and administrative  expenses of $109,365,
offset by dividend income of $1,382,  but no proceeds from any  litigation.  For
the period  January 12, 2004 (Date of Inception) to June 30, 2004, we reported a
net loss of  $191,880.  Included  in this net loss  are  legal  fees of  $83,313
(77,598 of which related to litigation), and administrative expenses of $108,842
offset by dividend income of $276, 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  quarter 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

                                       11





pursue  their  claims in the 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 Commissions 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 or a trial  (which is itself  dependent on the outcome of the appeal)
until at least the first quarter of 2006.

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 (5.5% per annum at June 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.

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

                                       12





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 period
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 II - 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 presently
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. It is not likely that
the appeal will be scheduled for oral arguments prior to late October of 2005 or
that a decision in 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.

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.

                                       14





         *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:  August 15, 2005                    By: /s/ Joseph E. Bernstein
                                              ----------------------------------
                                              Joseph E. Bernstein
                                              Litigation Trustee



DATE:  August 15, 2005                    By: /s/ Paul A. deBary
                                              ----------------------------------
                                              Paul A. deBary
                                              Litigation Trustee

                                       15`