EXHIBIT 5.2
[LETTERHEAD OF RICHARDS, LAYTON & FINGER, PA]
November 15, 2000
Downey Financial Corp.
3501 Jamboree Road
Newport Beach, California 92660
Re: Downey Financial Capital Trust II and Downey Financial Capital
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Trust III
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Ladies and Gentlemen:
We have acted as special Delaware counsel for Downey Financial Capital
Trust II ("Trust II") and Downey Financial Capital Trust III ("Trust III"), each
a Delaware business trust, in connection with the matters set forth herein.
Trust II and Trust III are hereinafter collectively referred to as the "Trusts"
and sometimes hereinafter individually referred to as a "Trust". At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of Trust II, as filed with the Secretary
of State of the State of Delaware (the "Secretary of State") on November 3,
2000;
(b) The Certificate of Trust of Trust III, as filed with the Secretary
of State on November 3, 2000 (the documents in items (a) and (b) above are
hereinafter collectively referred to as the "Certificates of Trust" and
sometimes hereinafter individually referred to as a "Certificate of Trust");
(c) The Trust Agreement of Trust II, dated as of November 3, 2000,
among Downey Financial Corp., a Delaware corporation (the "Company"), and the
trustees of Trust II named therein;
(d) The Trust Agreement of Trust III, dated as of November 3, 2000,
among the Company and the trustees of Trust III named therein;
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(e) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus with respect to the Trusts (the
"Prospectus"), relating to the Capital Securities of the Trusts representing
preferred undivided beneficial interests in the assets of the Trusts (each, a
"Capital Security" and collectively, the "Capital Securities"), in the form to
be filed by the Company and the Trusts with the Securities and Exchange
Commission on or about November 15, 2000;
(f) A form of Amended and Restated Trust Agreement for each of the
Trusts, to be entered into among the Company and the trustees of the Trust named
therein (collectively, the "Trust Agreements" and individually, a "Trust
Agreement"), attached as an exhibit to the Registration Statement (including
Exhibit D thereto); and
(g) A Certificate of Good Standing for each of the Trusts, dated
November 14, 2000, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreements.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (g) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (g) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each of the
Trust Agreements will constitute the entire agreement among the parties thereto
with respect to the subject matter thereof, including with respect to the
creation, operation and termination of the applicable Trust, and that the Trust
Agreements and the Certificates of Trust will be in full force and effect and
will not be amended, (ii) except to the extent provided in paragraph 1 below,
the due organization or due formation, as the case may be, and valid existence
in good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Capital Security is to be issued by the Trusts (collectively, the "Capital
Security Holders") of a Capital Security Certificate for such Capital Security
and the payment for such Capital Security, in accordance
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with the Trust Agreements and the Registration Statement, and (vii) that the
Capital Securities are authenticated, issued and sold to the Capital Security
Holders in accordance with the Trust Agreements and the Registration Statement.
We have not participated in the preparation of the Registration Statement or the
Prospectus and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is validly existing
in good standing as a business trust under the Business Trust Act.
2. The Capital Securities of each Trust will be, when issued,
validly issued, fully paid and nonassessable beneficial interests in the assets
of the applicable Trust, subject to the qualifications set forth in paragraph 3
below,.
3. The Capital Security Holders, as beneficial owners of the
applicable Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Capital
Security Holders may be obligated to make payments as set forth in the Trust
Agreements.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
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