St. Regis Mohawk Tribal Court confirms post-trial interest

17 July 2007

WILMINGTON, Delaware -- (PRESS RELEASE) -- The Catskill Litigation Trust announced today that the St. Regis Mohawk Tribal Court has confirmed that over $1 billion of post judgment interest has accumulated on a Default Judgment Order that the Trust is seeking to enforce against Park Place Entertainment Corporation ("Park Place") and Clive Cummis, its former General Counsel. The Trust had requested clarification from the Tribal Court of the rate of interest applicable to a $1,787,000,000 judgment entered by the Tribal Court on March 20, 2001. The Order was issued in a class action lawsuit brought on behalf of members of the St. Regis Mohawk Tribe on April 26, 2000, claiming that the defendants had interfered with a proposed casino project in the Catskills.

The underlying claim of the tribal class members was initiated in the Tribal Court, which was established in 1994 with funding assistance being provided by the United States Department of Interior, Bureau of Indian Affairs. The United States Supreme Court, in a case decided in 1985 recognized the jurisdiction of tribal courts over lawsuits that involved non- tribal members. In National Farmers Ins. Cos. v. Crow Tribe, 471 U.S. 845 (1985), the Supreme Court ruled that any challenge to the jurisdiction of a tribal court had to first be presented to the tribal court; and, in 1997, in Basil Cook Enterprises Inc. v. St. Regis Mohawk Tribe, 117 F. 3rd 61 (2d Cir. 1997), the US Court of Appeals for the Second Circuit applied this doctrine to uphold a challenge against the St. Regis Mohawk Tribal Court.

In announcing the ruling of the Tribal Court, Dennis C. Vacco, former United States Attorney for the Western District of New York and Attorney General for the State of New York, who now serves as a Trustee, stated, "This ruling on post judgment interest was helpful in establishing, in a court of unquestioned authority over this issue, the cost of further delay in satisfying the judgment. The billion plus dollars in interest represent the cost to the defendants for ignoring the Tribal Court judgment for the last six years." The Tribal Court Order was issued on July 12, 2007 and provides that interest on any unsatisfied portion of the judgment accrues from date of entry of the judgment at 9% per annum simple interest, as provided in sections 5003 and 5004 of the New York Civil Practice Law and Rules. Such accumulated interest exceeded $1 billion as of July 12, 2007.

In its Order, the Court also amended the caption of the judgment to reflect that Harrah's Operating Company, Inc. ("Harrah's") is now the proper judgment debtor rather than its predecessor, Park Place. Harrah's acquired Park Place and assumed all of its litigation liabilities in June 2005. Harrah's Entertainment, Inc. (NYSE:HET ), the parent company of Harrah's, has indicated in its 2006 financial statements that, prior to its acquisition of Caesars Entertainment, Inc., it was believed that the judgment was settled:

"In April 2000, the Saint Regis Mohawk Tribe (the "Tribe") granted Caesars the exclusive rights to develop a casino project in the State of New York. On April 26, 2000, certain individual members of the Tribe purported to commence a class action proceeding in a 'Tribal Court' in Hogansburg, New York, against Caesars seeking to nullify Caesars' agreement with the Tribe.

On March 20, 2001, the 'Tribal Court' purported to render a default judgment against Caesars in the amount of $1.787 billion. Prior to our acquisition of Caesars in June 2005, it was believed that this matter was settled pending execution of final documents and mutual releases. However, these documents were never executed. The Company believes this matter to be without merit and will vigorously contest any attempt to enforce the judgment." (Source: Harrah's Entertainment, Inc., Consolidated Statements, Form 10-K (2006), Note 14-Litigation)

The Tribal Court recently approved an assignment of the class action judgment to the Trust, which then filed a suit to enforce the judgment in the United States District Court for the Northern District of New York on behalf of the beneficiaries of the Trust, which include the enrolled members of the St. Regis Mohawk Tribe. Under US law, tribal court judgments are recognized by US courts under principles of comity or state statutes applicable to recognition of judgments of foreign states or territories.

Attorneys for the defendants had originally appeared before the Tribal Court after the suit was initiated in April 2000 and moved to dismiss the case on the merits in May 2000.

Immediately after filing the motion to dismiss in Tribal Court, defendants sought an injunction against the Tribal Court proceedings in the United States District Court for the Northern District of New York, which was denied on the basis that the District Court lacked subject matter jurisdiction. On appeal, the United States Court of Appeals for the Second Circuit remanded the case to the District Court without expressing any opinion on the merits of the case. Thereafter, upon failure of the defendants to appear and defend ensuing proceedings against them in the Tribal Court, the Default Judgment Order was issued in the amount of $1,782,000,000 in compensatory damages and $5,000,000 in punitive damages. Harrah's and Mr. Cummis similarly did not appear before the Tribal Court in connection with the issuance of the July 12, 2007 Order.