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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 24, 2007
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Catskill Litigation Trust
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(Exact name of registrant as specified in its charter)
Delaware333-112603 16-6547621
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
c/o Christiana Bank & Trust Company,
1314 King Street, Wilmington, Delaware19801
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (302) 888-7400
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On January 24, 2007, Catskill Litigation Trust (the "Litigation Trust")
entered into an agreement (the "Joint Alliance Agreement") with the St. Regis
Mohawk Tribe (the "Tribe") and representatives of the litigants in a separate
lawsuit. That lawsuit pursued claims on behalf of tribal members that are
similar to the claims that the Litigation Trust is pursuing on behalf of its
beneficiaries. The lawsuit resulted in a $1.787 billion judgment in the St.
Regis Mohawk Tribal Court, rendered on March 20, 2001, but an enforcement action
by the plaintiffs to enforce that judgment in a federal district court was
subsequently dismissed, without prejudice. At the time of the enforcement
action, the validity of the Tribal Court was in question and the matter was the
subject of other judicial and administrative proceedings.
A subsequent decision issued in one of the related court cases reviewed
several determinations of the Department of the Interior, in light of prior
litigation relating to the governmental organization of the Tribe. As a result
of its review, the court vacated certain determinations made by the Department
of the Interior and ordered review of the matters DE NOVO. A final determination
in this regard may affect the ultimate recognition of the validity of the St.
Regis Mohawk Tribal Court by the federal courts.
As a result of the common interests of the Litigation Trust's
beneficiaries and the class of enrolled tribal members, the parties to the Joint
Alliance Agreement have agreed to work together to merge their respective
interests and share in any recoveries of their respective claims. The term of
the Joint Alliance Agreement extends through July 30, 2007.
During the term of the Joint Alliance Agreement, the parties have agreed
to work together to accomplish a merger of their respective litigation interests
in the Litigation Trust. The litigants in the Tribal Court litigation have
agreed to execute and deliver appropriate documentation providing for the
transfer of all their right title and interest in their claims to the Litigation
Trust. The Litigation Trustees have agreed to request the consent of the
beneficiaries of the Litigation Trust to an amendment of the Declaration of
Trust establishing the Trust that would permit the prosecution of such claims by
the Litigation Trust and a doubling of the authorized ownership units of the
Litigation Trust. Upon the effectiveness of such amendment, the Litigation Trust
will obtain complete ownership rights to the claims of the tribal litigants,
including the Tribal Court judgment, and 50% of the ownership units of the
Litigation Trust will become beneficially owned by the enrolled members of the
St Regis Mohawk Tribe, as the class of plaintiffs certified by the Tribal Court.
Consummation of the merger of claims will require the consent of the unitholders
of the Litigation Trust pursuant to Section 9.3 of the Litigation Trust and
satisfaction of other conditions. No assurance can be given that such merger
will be completed or completed on a timely basis.
If the merger of these claims is consummated, the enrolled members of the
St. Regis Mohawk Tribe, as beneficial owners of the new units, will be entitled
to share in any future recovery or settlement in the litigation currently being
prosecuted by the Litigation Trust. Similarly, the existing unitholders will be
entitled to share in any future recovery or settlement of the claims of the
tribal litigants that are granted to the Litigation Trust.
In addition, in the Joint Alliance Agreement, the parties have further
agreed to support the preservation and prosecution of their respective claims
and cooperate in the mutual pursuit of such claims. The Litigation Trustees,
acting with the advice and counsel of the representatives of the tribal court
litigants and the St. Regis Mohawk Tribe, will act as the exclusive
representatives and spokespersons of the tribal court litigants and the
Litigation Trust with regard to the recovery or settlement of their respective
claims against all the defendants. The Litigation Trustees, however, will have
no power or authority to settle or discontinue any claim unless all the claims
are settled or discontinued and any proceeds of the settlement are distributed
among the unitholders and the members of the St. Regis Mohawk Tribe on the same
basis as if the merger had occurred.
In addition, on January 24, 2007, the Litigation Trust retained the
services of JAF Management, LLC to serve as a consultant to the Litigation Trust
concerning strategic and structuring alternatives, capital market and industry
conditions and financial valuations relating to potential settlement
opportunities or active settlement negotiations. The term of the consulting
agreement runs through March 31, 2008. Joel Asen is to supervise the assignment
for JAF Management, LLC. As compensation for the services of JAF Management,
LLC, the Litigation Trust has agreed to pay a success fee in connection with any
out-of-court settlement or termination arrangement with respect to any of the
litigations equal to three percent (3%) of the amount by which the cumulative
gross realizable value of any such settlement or termination arrangement during
the term of the consulting agreement exceeds $200 million. Any compensation
payable to the consultant is to be treated as an expense of the Litigation
Trust.
The Litigation Trust is not engaged in settlement negotiations with
respect to any of the claims at this time. The defendants have raised numerous
defenses to the various claims in the litigations and have pursued them
vigorously resulting in dismissals or judgments in their favor. The ability of
the Litigation Trust to prevail in the various litigations will depend on a
number of factors, including the ability to obtain reversals in the appellate
courts and to pursue the litigations successfully in the trial courts
notwithstanding potential defenses to the claims and the St. Regis Mohawk Tribal
Court judgment, including the alleged invalidity of the Tribal Court.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No. Description
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99.1 Joint Alliance Agreement, dated January 24,2007, by and among the Catskill Litigation
Trust, the St. Regis Mohawk Tribe, et al.
99.2 Consulting Agreement, dated January 24, 2007, by
and among the Catskill Litigation Trust and JAF
Management, LLC.
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 hereunto duly authorized.
CATSKILL LITIGATION TRUST
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(Registrant)
Date: January 26, 2007
By: /s/ Joseph E. Bernstein
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Joseph E. Bernstein
Litigation Trustee
By: /s/ Paul deBary
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Paul deBary
Litigation Trustee
Dates Referenced Herein and Documents Incorporated by Reference
