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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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 March 31, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-24711

EBS LITIGATION, L.L.C.

(Exact name of registrant as specified in its charter)

(212) 682-7474

(Registrant’s telephone number, including area code)

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 May 1, 2004 there were 10,000,000 Class A Membership Units outstanding and no Class B Membership Units outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EBS LITIGATION, L.L.C.

Statements of Operations

For the Three Month Periods

Ended March 31, 2004 and 2003

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

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EBS LITIGATION, L.L.C.

Balance Sheets

March 31, 2004 and December 31, 2003

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

3

EBS LITIGATION, L.L.C.

Statements of Changes in Members’ Equity

For the Periods Ended

March 31, 2004 and December 31, 2003

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

4

EBS LITIGATION, L.L.C.

Statements of Cash Flows

For the Three Months Ended

March 31, 2004 and 2003

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

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EBS Litigation, L.L.C.

Notes to Financial Statements

March 31, 2004 and December 31, 2003

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 & Buster’s, Inc. (“D&B” or “Dave & Buster’s”) 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.

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 2000, the Bankruptcy Court granted the Company’s motion to extend the existence of the Company for an additional two-year term. In September 2002, the Company filed a motion with the Bankruptcy Court to reopen the Edison bankruptcy case for the limited purpose of extending the term of the Company. The Court approved the motion at that time, extending the existence of the company for an additional two-year term.

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 accounting principles generally accepted in the United States. 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, 2003 through December 31, 2003, January 1, 2003 through March 31, 2003 (unaudited) and January 1, 2004 to March 31, 2004 (unaudited).

Cash and Cash Equivalents

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

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

Accrued Expenses

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

Defendant Payment Revenue

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

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EBS Litigation, L.L.C.

Notes to Financial Statements

March 31, 2004 and December 31, 2003

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.

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.

On September 25, 1997, Edison transferred its rights, title and interest in the Unresolved Avoidance Claims to the Company. In addition, as of September 25, 1997, Edison was obligated to provide $2 million of cash funding to the Company (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 of D&B Spinoff Settlement Proceeds (as defined in the Plan) to holders of Class A Membership Units. In addition, $0.8 million was reserved for holders of the Class A Membership Units that were distributed in December 1998.

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

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

During 2002 and 2003, the Company did not make any distributions to holders of Class A Membership Units.

At March 31, 2004, the Company has no Class B Membership Units outstanding.

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. See Note 5 below with respect to settlement proceeds received after March 31, 2004.

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

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EBS Litigation, L.L.C.

Notes to Financial Statements

March 31, 2004 and December 31, 2003

The matter of EBS Litigation, L.L.C. v. Barclays Global Investors, et al., filed in the District Court for the District of Delaware, involves an action to recover damages associated with fraudulent conveyances from a defendant class (the “Defendant Class”), who received shares of D&B stock in the spin-off transaction. On January 22 and 23, 2002, the Company’s claims against the Defendant Class were tried before Judge Robinson in the District Court for the District of Delaware (the “District Court”). Judge Robinson made the decision to dismiss the case. After the trial, on September 18, 2002, the United States Court of Appeals for the Third Circuit (the “Third Circuit”) issued a decision on the Defendant Class’ interlocutory appeal of Judge Robinson’s decision to dismiss their third party claims against directors and officers of Dave & Buster’s. 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.

In February 2003, the District Court referred the D&B Spinoff Litigation to mediation before a magistrate judge. The mediation took place on March 28, 2003 and continued thereafter. The mediation involved all claims: the Company’s claim against the Defendant Class, the Defendant Class’ third party claims against the officers and directors of Dave & Buster’s and Edison, as well as the threatened indemnification claims by the officers and directors of Edison against the Company (see discussion below), pursuant to indemnification provisions in the Debtor’s Amended Joint Plan of Reorganization.

The mediation process concluded with the parties reaching a proposed settlement. On January 29, 2004, Judge Robinson in the District Court approved the notice of settlement. The notice of pendency of the Defendant Class action settlement was mailed to the members of the Defendant Class on February 12, 2004. The hearing occurred on March 31, 2004.

The Company and EBS Pension were served on March 28, 2003, with a Fourth Party Complaint brought by the Third-Party Defendants, David B. Cooper, Jr., Julian I. Edison, Peter A. Edison, Jane Evans, Alan A. Sachs, Craig D. Schnuck, and Martin Sneider (collectively, the “Edison Directors”) in the matter of EBS Pension, L.L.C. v. Barclays Global Investors, N.A., et al. C.A. No. 98-547 SLR (Dist. Del) (the “Litigation”). Briefly, the Litigation brought by EBS Pension alleged that the Third Party Plaintiffs were liable for the return of D&B stock received by them as a distribution from Edison in 1995. The Third-Party Plaintiffs subsequently brought a Third-Party claim in the Litigation alleging that if the Third-Party Plaintiffs were found liable then the Edison Directors are liable to the Third-Party Plaintiffs for all or a part of the recovery. The Fourth Party Complaint brought by the Edison Directors alleges that if the Edison Directors are found liable in the Third Party claim, then pursuant to Section 5.1(f) of the Plan establishing the Indemnification Reserve, the Company and EBS Pension are liable to the Edison Directors for all costs and expenses the Edison Directors have incurred or will incur in connection with the Edison Director’s defense of the Third Party claim and with the prosecution of their Fourth Party Complaint.

Prior to the Litigation being filed, in February 2003, the District Court hearing the Litigation referred the matter to mediation before a magistrate judge. The mediation took place on March 28, 2003. The mediation involved all claims involved in the Litigation, as well as, the Fourth Party Complaint indemnification claims brought by the Edison Directors against the Company and EBS Pension pursuant to indemnification provisions in the Debtor’s Amended Joint Plan or Reorganization.

On March 31, 2004 the District Court granted the motion to approve the settlement of all claims in the Litigation. The settlement allowed for members of the defendant class to opt out of the portion of the settlement addressing the claims of the Company against the defendant class. The District Court’s Order and Final Judgment provides for releases of all Third-party claims and Fourth-party claims brought in the Litigation. In accordance with the Order and Final Judgment members of the defendant class paid $5.00 per Dave & Buster share received in the dividend, with $.50 per share going to defray the litigation costs and fees incurred by the Class Representatives on behalf of the Defendant Class, and the remaining 4.50 per share

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EBS Litigation, L.L.C.

Notes to Financial Statements

March 31, 2004 and December 31, 2003

being paid to the Company. The Order and Final Judgment was subject to various contingencies, including the receipt by counsel for the defendant class of settlement payments by members of the class in excess of $1.8 million dollars. To the Company’s knowledge, the contingencies have been met and no members of the Defendant Class have opted out of the settlement. On May 13, 2004, the Company received a wire of $2,490,570 in settlement proceeds from counsel for the defendant class. In accordance with the Order and Final Judgment, the Company will have a judgment in the amount of $5.00 per share against class members who have not already paid to settle claims, with $.50 per share being paid to the defendant class representatives in satisfaction of their defense expenses. The Company is in the process of determining what steps, if any, should be taken as to these remaining class members.

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The following is a discussion and analysis of the financial condition and results of operations of the Company as of and for the years ended December 31,2003, 2002, 2001, 2000, 1999 and 1998 and as of and for the periods ended December 31, 1997, January 1, 2003 through March 31, 2003 (unaudited), January 1, 2004 through March 31, 2004 (unaudited), and of certain factors that may affect the Company’s prospective financial condition and results of operations. The following 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, 2003. 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. During the three months ended March 31, 2003, the Company recognized additional defendant payment revenue in the amount $615,940. The Company did receive any defendant payment received during the three months ended March 31, 2004. 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 income.

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, 2003, 2002, 2001, 2000, 1999 and 1998, and the period ended December 31, 1997, the Company recognized approximately $7,000, $13,000, $51,000, $98,000, $92,000, $388,000 and $106,000 of interest income, respectively. During the three month periods ended March 31, 2004 and 2003, the Company recognized approximately $1,139 and $1,952 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 $363,000, $691,000, $442,000, $489,000, $299,000, $671,000 and $176,000, for the years ended December 31, 2003, 2002, 2001, 2000, 1999 and 1998, and the period ended December 31, 1997, respectively. During the three month periods ended March 31, 2004 and 2003, the Company had expenses of approximately $85,751 and $59,308, 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, 2003, 2002, 2001, 2000, 1999, 1998 and 1997, the Company had cash and cash equivalents of approximately $1.1 million, $778,000, $ 1.2 million, $1.5 million, $1.9 million, $3.0 million and $12.0 million, respectively. At March 31, 2004, the Company had cash and cash equivalents of approximately $965,254. During 2003, 2002, 2001 and 2000, the Company did not make any distributions 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 1998, the Company distributed an aggregate amount of $13.7 million to holders of Class A Membership Units. During 1997, the Company did not make any distributions to holders of Class A Membership Units. The Company made no distributions during the three month period ending March 31, 2004. 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”) and against the D&B Third-party Defendants (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.

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.

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

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

On January 22 and 23, 2002, the D&B Spinoff Litigation was tried before Judge Robinson in the United States District Court for the district of Delaware. The Company continues to prosecute the D&B Spinoff Litigation vigorously, and to pursue the maximum available recoveries.

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.

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 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.

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

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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.

Prior to the Litigation being filed, in February 2003, the District Court hearing the Litigation referred the matter to mediation before a magistrate judge. The mediation took place on March 28, 2003. The mediation involves all claims involved in the Litigation, as well as, the Fourth Party Complaint indemnification claims brought by the Edison Directors against the Company and EBS Pension pursuant to indemnification provisions in the Debtor’s Amended Joint Plan or Reorganization.

On March 31, 2004 the District Court granted the motion to approve the settlement of all claims in the Litigation. The settlement allowed for members of the defendant class to opt out of the portion of the settlement addressing the claims of the Company against the defendant class. The District Court’s Order and Final Judgment provides for releases of all Third-party claims and Fourth-party claims brought in the Litigation. The Order and Final Judgment requires members of the defendant class to pay $5.00 per Dave & Buster share received in the dividend, with $.50 per share going to defray the litigation costs and fees incurred by the Class Representatives on behalf of the defendant class, and the remaining 4.50 per share being paid to the Company. The Order and Final Judgment was subject to various contingencies, including the receipt by counsel for the defendant class of settlement payments by members of the class in excess of $1.8 million dollars. To our knowledge, the contingencies have been met and no members of the Defendant Class have opted out of the settlement. On May 13, 2004, the Company received a wire of $2,490,570 in settlement proceeds from counsel for the defendant class. Pursuant to the Order and Final Judgment, the Company will have a judgment in the amount of $5.00 per share against class members who have not already paid to settle claims, with $.50 per share being paid to the defendant class representatives in satisfaction of their defense expenses. The Company is in the process of determining what steps, if any, should be taken as to these remaining class members.

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

Three Months Ended March 31, 2004 Compared to the Three Months Ended March 31, 2003

Total income for the three months ended March 31, 2004 and 2003, was $1,139 and $617,892, respectively. This decrease is due primarily to the decrease in defendant payment income while the Company pursued the settlement discussed above.

Total expenses increased for the three months ended March 31, 2004, as compared to the three months ended March 31, 2003, by $28,443 due primarily to an increase in legal fees associated with pursuing the settlement discussed above.

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. As of March 31, 2004, 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.

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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.

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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.

Date: May 14, 2004

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