Exhibit 5.1
August 18, 2005
ECC Capital Corporation
1833 Alton Parkway
Irvine, California 92606
| Re: | Registration Statement on Form S-8 |
Ladies and Gentlemen:
We have served as Maryland counsel to ECC Capital Corporation, a Maryland corporation (the “Company”), in connection with certain matters of Maryland law arising out of the registration of up to 5,760,000 shares (the “Shares”) of the Company’s Common Stock, par value $.001 per share (“Common Stock”), covered by the above-referenced Registration Statement (the “Registration Statement”), under the Securities Act of 1933, as amended (the “1933 Act”). The Shares may be issued under the Encore Credit Corp. 2001 Stock Option Plan (the “Plan”).
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
1. The Registration Statement and all amendments thereto, filed with the Securities and Exchange Commission (the “Commission”) pursuant to the 1933 Act;
2. The charter of the Company (the “Charter”), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the “SDAT”);
3. The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
4. Resolutions (the “Encore Board Resolutions”) adopted by the Board of Directors of Encore Credit Corp., a California corporation (“Encore”), relating to the adoption of
ECC Capital Corporation
August 18, 2005
Page 2
the Plan and the issuance of shares of Encore common stock under the Plan, certified as of the date hereof by an officer of the Company;
5. The Agreement of Merger, dated as of August 9, 2004 (the “Merger Agreement”), among the Company, Encore and ECC Merger Sub, a California corporation, pursuant to which the Company assumed the obligations of Encore under the Plan upon the effective time of the merger provided for in the Merger Agreement (the “Merger”), certified as of the date hereof by an officer of the Company;
6. The Plan, certified as of the date hereof by an officer of the Company;
7. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
8. A certificate executed by an officer of the Company, dated as of the date hereof; and
9. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or
ECC Capital Corporation
August 18, 2005
Page 3
relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
5. The Plan was approved by the stockholders of Encore by the vote and in the manner required by all applicable laws, rules and regulations of governmental authority.
6. The Merger has been effected under the laws of the State of California.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
2. The Shares have been duly authorized for issuance as provided under the Plan, and, when and if issued and delivered against payment therefor and/or otherwise in the manner described in the Encore Board Resolutions, the Merger Agreement and the Plan, will be (assuming that upon any such issuance the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter) validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the substantive laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with any federal or state securities laws, including the securities laws of the State of Maryland. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement and, accordingly, may not be relied upon by, quoted in any manner to, or delivered to any other person or entity without, in each instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit
ECC Capital Corporation
August 18, 2005
Page 4
that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Venable, LLP
