[LETTERHEAD OF IRELL & MANELLA LLP]
August 27, 2002
EXHIBIT 5.1
Pinnacle Entertainment, Inc.
330 North Brand Street
Suite 1100
Glendale, CA 91203
Ladies and Gentlemen:
We have acted as special counsel to Pinnacle Entertainment, Inc., a
Delaware corporation (the "Company"), in connection with the Registration
Statement on Form S-3 (File No. 333-90426) (the "Registration Statement")
originally filed by the Company and the subsidiaries of the Company indicated on
the Registration Statement as being additional registrants (the "Subsidiary
Guarantors") with the Securities and Exchange Commission (the "Commission") on
June 13, 2002 under the Securities Act of 1933, as amended (the "Act"). The
Registration Statement relates to the resale from time to time by a certain
stockholder of the Company (the "Selling Stockholder") of up to 2,322,699 shares
of Common Stock (as defined below) owned by the Selling Stockholder (the
"Secondary Shares"), and the issuance and sale from time to time by the Company,
pursuant to Rule 415 of the General Rules and Regulations promulgated under the
Act, of the following securities of the Company with an aggregate public
offering price of up to U.S. $500,000,000 or the equivalent thereof, based on
the applicable exchange rate at the time of sale, in one or more foreign
currencies, currency units or composite currencies as shall be designated by the
Company, less the aggregate public offering price of any sales of Secondary
Shares: (i) debt securities, which may be in one or more series (the "Debt
Securities"), and which may be issued under an indenture the form of which has
been filed as an exhibit to the Registration Statement (the "Indenture"), which
Indenture is proposed to be entered into between the Company and a trustee to be
named (the "Trustee"); (ii) shares of preferred stock, $1.00 par value per
share, of the Company (the "Preferred Stock"), in one or more series; (iii)
shares of common stock, $0.10 par value per share, of the Company ("Common
Stock"); (iv) warrants ("Warrants") to purchase Common Stock, which may be
issued pursuant to one or more warrant agreements (each, a "Warrant Agreement")
which may be entered into between the Company and one or more warrant agents to
be named (the "Warrant Agent" or "Warrant Agents"); (v) shares of the Preferred
Stock represented by depositary shares ("Depositary Shares"), evidenced by
depositary receipts (the "Receipts"), which may be issued pursuant to one or
more deposit agreements (each, a "Deposit Agreement") which may be entered into
between the Company and a depositary to be named; and (vi) guarantees of the
Subsidiary Guarantors to be issued in connection with the Debt Securities (the
"Debt
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Guarantees"). In addition, the Company may issue an indeterminate number of
shares of Common Stock upon conversion or exercise of any Warrants, an
indeterminate number of shares of Preferred Stock or Common Stock upon
conversion of any Debt Securities, and an indeterminate number of shares of
Common Stock or Preferred Stock upon conversion of any Preferred Stock (the
"Indeterminate Stock"). The Debt Securities, the Preferred Stock, the Common
Stock, the Warrants, the Depositary Shares, the Debt Guarantees and the
Indeterminate Stock are collectively referred to herein as the "Offered
Securities."
This opinion is being delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Act.
In connection with this opinion we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of the
Company, such agreements, certificates of public officials, and certificates of
officers or other representatives of the Company and others, and such other
documents, instruments, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed: (a) the legal capacity of all natural
persons; (b) the genuineness of all signatures; (c) the authenticity of all
documents submitted to us as originals; (d) the conformity to original documents
of all documents submitted to us as certified, conformed, photostatic or
facsimile copies; (e) the authenticity of the originals of such latter
documents; and (f) the truth, accuracy and completeness of the information,
representations and warranties contained in the records, documents, instruments,
certificates and records we have reviewed. In making our examination of executed
documents or documents to be executed, we have assumed that the parties thereto,
other than the Company, had or will have the power, corporate or other, to enter
into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution,
countersignature (if necessary) and delivery by such parties of such documents
and that such documents constitute or will constitute valid and binding
obligations of such parties enforceable against such parties in accordance with
their terms. As to any facts material to the opinions expressed herein which
were not independently established or verified, we have relied upon oral or
written statements and representations of officers and other representatives of
the Company and others.
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August 27, 2002
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Members of our firm are admitted to the bar in the State of California and
the State of New York, and we do not express any opinion herein concerning the
applicability of, compliance with, or effect of any laws other than the laws of
the State of California with respect to instruments and agreements specifically
governed by the laws of such jurisdiction, and the laws of the State of New York
with respect to instruments and agreements specifically governed by the laws of
such jurisdiction, the Federal law of the United States and the Delaware General
Corporation Law (including the statutory provisions, all applicable provisions
of the Delaware Constitution and required judicial decisions interpreting the
foregoing).
Based on and subject to the foregoing and to the other qualifications and
limitations set forth herein, we are of the opinion that:
1. With respect to any series of Debt Securities (the "Offered Debt
Securities"), when (i) the Registration Statement, as finally amended (including
all necessary post-effective amendments), has become effective under the Act and
the Indenture has been qualified under the Trust Indenture Act of 1939, as
amended (and a Form T-1 shall have been properly filed as an exhibit to the
Registration Statement); (ii) an appropriate prospectus supplement or term sheet
with respect to the Offered Debt Securities has been prepared, delivered and
filed in compliance with the Act and the applicable rules and regulations
thereunder; (iii) if the Offered Debt Securities are to be sold pursuant to a
firm commitment underwritten offering, the underwriting agreement with respect
to the Offered Debt Securities has been duly authorized, executed and delivered
by the Company and the other parties thereto; (iv) the Board of Directors,
including any appropriate committee appointed thereby, and appropriate officers
of the Company have taken all necessary corporate action to approve the issuance
and terms of the Offered Debt Securities and related matters and have duly
authorized, executed and delivered the Indenture; (v) the terms of the Offered
Debt Securities and of their issuance and sale have been duly established in
conformity with the Indenture so as not to violate any applicable law, the
Certificate of Incorporation or the By-laws of the Company or result in a
default under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company; and (vi) the Offered
Debt Securities have been duly executed and authenticated in accordance with the
provisions of the Indenture and duly delivered to the purchasers thereof upon
payment of the agreed-upon consideration therefor, the Offered Debt Securities,
when issued and sold in accordance with the Indenture and the applicable
underwriting agreement, if any, or any other duly authorized, executed and
delivered valid and legally binding purchase or agency agreement, will be valid
and binding
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obligations of the Company, enforceable against the Company in accordance with
their respective terms.
2. With respect to any series of Warrants (the "Offered Warrants"), when
(i) the Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Act; (ii) an
appropriate prospectus supplement or term sheet with respect to the Offered
Warrants has been prepared, delivered and filed in compliance with the Act and
the applicable rules and regulations thereunder; (iii) if the Offered Warrants
are to be sold pursuant to a firm commitment underwritten offering, an
underwriting agreement with respect to the Offered Warrants has been duly
authorized, executed and delivered by the Company and the other parties thereto;
(iv) the Board of Directors, including any appropriate committee appointed
thereby, and appropriate officers of the Company have taken all necessary
corporate action to approve the issuance and terms of the Offered Warrants and
related matters and have duly authorized, executed and delivered the Warrant
Agreement; (v) the terms of the Offered Warrants and of their issuance and sale
have been duly established in conformity with the Warrant Agreement so as not to
violate any applicable law, the Certificate of Incorporation or By-laws of the
Company or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company;
and (vi) the Offered Warrants have been duly executed, delivered and
countersigned in accordance with the provisions of the applicable Warrant
Agreement and duly issued and sold in the applicable form to be filed as an
exhibit to the Registration Statement or any amendment thereto and in the manner
contemplated in the Registration Statement or any prospectus supplement or term
sheet relating thereto, the Offered Warrants, when issued and sold in accordance
with the applicable Warrant Agreement and the applicable underwriting agreement,
if any, or any other duly authorized, executed and delivered valid and legally
binding purchase or agency agreement, will be valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms.
3. With respect to the shares of any series of Preferred Stock (the
"Offered Preferred Stock"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) an appropriate prospectus supplement or term sheet
with respect to the shares of the Offered Preferred Stock has been prepared,
delivered and filed in compliance with the Act and the applicable rules and
regulations thereunder; (iii) if the Offered Preferred Stock is to be sold
pursuant to a firm commitment underwritten offering, the underwriting agreement
with respect to the shares of the Offered Preferred Stock has been duly
authorized, executed and delivered by the Company and the other parties thereto;
(iv) the Board of Directors, including any appropriate committee appointed
thereby, and appropriate officers of the Company have taken all necessary
corporate action to approve the issuance and terms of the shares of the Offered
Preferred Stock and related matters, including the adoption of a Certificate of
Designations for the Offered Preferred Stock in accordance with the applicable
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provisions of the corporate laws of the State of Delaware (the "Certificate of
Designations") in the form to be filed as an exhibit to the Registration
Statement, any amendment thereto or any document incorporated by reference
therein; (v) the filing of the Certificate of Designations with the Secretary of
State of the State of Delaware has duly occurred; (vi) the terms of the Offered
Preferred Stock and of their issuance and sale have been duly established in
conformity with the Company's Certificate of Incorporation, including the
Certificate of Designations relating to the Offered Preferred Stock, and the
By-laws of the Company so as not to violate any applicable law, the Certificate
of Incorporation or By-laws of the Company or result in a default under or
breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company; and (vii) certificates in the form
required under Delaware corporate law representing the shares of the Offered
Preferred Stock are duly executed, countersigned, registered and delivered upon
payment of the agreed-upon and legal consideration therefor, the shares of the
Offered Preferred Stock (including any Preferred Stock duly issued upon
conversion, exchange or exercise of any Debt Securities or Preferred Stock
and/or underlying any Depositary Shares), when issued or sold in accordance with
the applicable underwriting agreement, if any, or any other duly authorized,
executed and delivered valid and binding purchase or agency agreement, will be
duly authorized, validly issued, fully paid and nonassessable.
4. With respect to the shares of Common Stock, when (i) the Registration
Statement, as finally amended (including all necessary post-effective
amendments), has become effective under the Act; (ii) an appropriate prospectus
supplement or term sheet with respect to the Common Stock has been prepared,
delivered and filed in compliance with the Act and the applicable rules and
regulations thereunder; (iii) if the Common Stock is to be sold pursuant to a
firm commitment underwritten offering, the underwriting agreement with respect
to the Common Stock has been duly authorized, executed and delivered by the
Company, the Selling Stockholders, if applicable, and the other parties thereto;
and (iv) in the case of Common Stock being issued and sold by the Company (the
"Offered Common Stock"), (A) the Board of Directors, including any appropriate
committee appointed thereby, and appropriate officers of the Company have taken
all necessary corporate action to approve the issuance of the Offered Common
Stock and related matters; (B) the terms of the issuance and sale of the Offered
Common Stock have been duly established in conformity with the Certificate of
Incorporation and the By-laws of the Company so as not to violate any applicable
law, the Certificate of Incorporation or the By-laws of the Company or result in
default under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company; and (C) certificates in
the form required under Delaware corporate law representing the shares of
Offered Common Stock have been duly executed, countersigned, registered and
delivered upon payment of the agreed-upon and legal consideration therefor
(provided that such consideration is not less than the par value thereof); and
in the case of the Secondary Shares, when the actions described in clauses (i),
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(ii) and (iii) above have taken place and assuming that such Secondary Shares
had been duly authorized and validly issued and were fully paid and
nonassessable in connection with the original issuance and sale of such
Secondary Shares, the shares of Offered Common Stock (including any Common Stock
duly issued upon conversion, exercise or exchange of any other Offered
Securities) and the Secondary Shares, when issued and sold in accordance with
the applicable underwriting agreement, if any, or any other duly authorized,
executed and delivered valid and binding purchase or agency agreement, will be
duly authorized, validly issued, fully paid and nonassessable.
5. With respect to any offering of Depositary Shares (the "Offered
Depositary Shares"), when (i) the Registration Statement, as finally amended
(including all necessary post-effective amendments), has become effective under
the Act; (ii) an appropriate prospectus supplement or term sheet with respect to
the Offered Depositary Shares has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations thereunder;
(iii) if the Offered Depositary Shares are to be sold pursuant to a firm
commitment underwritten offering, the underwriting agreement with respect to the
Offered Depositary Shares has been duly authorized, executed and delivered by
the Company and other parties thereto; (iv) the Board of Directors, including
any appropriate committee appointed thereby, and appropriate officers of the
Company have taken all necessary corporate action to approve the issuance of the
Offered Depositary Shares and related matters, including the adoption of a
Certificate of Designations for such related series of Preferred Stock in
accordance with the applicable provisions of the corporate laws of the State of
Delaware in the form to be filed as an exhibit to the Registration Statement,
any amendment thereto or any document incorporated by reference therein; (v) the
filing of such Certificate of Designations with the Secretary of State of the
State of Delaware has duly occurred; (vi) the terms of the Offered Depositary
Shares and of their issuance and sale have been duly established in conformity
with the Company's Certificate of Incorporation, including the Certificate of
Designations relating to such related series of Preferred Stock, and the By-laws
of the Company so as not to violate any applicable law, the Certificate of
Incorporation or By-laws of the Company or result in a default under or breach
of any agreement or instrument binding upon the Company and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company; (vii) the applicable Deposit Agreement has been
duly authorized, executed and delivered; (viii) the related series of Preferred
Stock has been duly authorized and validly issued in accordance with the
corporate laws of the State of Delaware and delivered to the depositary for
deposit in accordance with the Deposit Agreement; and (ix) the Receipts
evidencing the Depositary Shares have been duly issued against deposit of the
related series of Preferred Stock with the depositary in accordance with the
Deposit Agreement, the issuance and sale of the Depositary Shares will be
validly issued and the Receipts will entitle the holders thereof to the rights
specified therein and in the Deposit Agreement.
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6. With respect to the Debt Guarantees, when (i) the Registration
Statement, as finally amended (including all necessary post-effective
amendments), has become effective under the Act; (ii) the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (and a Form T-1
shall have been properly filed as an exhibit to the Registration Statement);
(iii) an appropriate prospectus supplement or term sheet with respect to the
applicable Debt Securities has been prepared, delivered and filed in compliance
with the Act and the applicable rules and regulations promulgated thereunder;
(iv) if the applicable Debt Securities are to be sold pursuant to a firm
commitment underwritten offering, the underwriting agreement with respect to
such Debt Securities has been duly authorized, executed and delivered by the
parties thereto; (v) the Board of Directors (or comparable governing body),
including any appropriate committee appointed thereby, and appropriate officers
of the applicable Subsidiary Guarantors have taken all necessary corporate (or
limited liability company, partnership or other) action to approve the issuance
and terms of the Debt Guarantees and related matters and have duly authorized,
executed and delivered the Indenture, if applicable; (vi) the terms of the Debt
Guarantees and their issuance and sale have been duly established in conformity
with the Indenture so as not to violate any applicable law, the Certificate of
Incorporation or the By-laws (or comparable instruments) of the applicable
Subsidiary Guarantors or result in default under or breach of any agreement or
instrument binding upon such Subsidiary Guarantors and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over such Subsidiary Guarantors; and (vii) the Debt Guarantees have
been duly executed and delivered in accordance with the provisions of the
Indenture and the applicable Debt Securities have been duly delivered to the
purchasers thereof upon payment of the agreed-upon consideration therefor, the
Debt Guarantees, when issued in accordance with the provisions of the Indenture,
will constitute valid and binding obligations of the applicable Subsidiary
Guarantors, enforceable against such Subsidiary Guarantors in accordance with
their terms.
The opinions set forth above are subject to the following additional
exceptions, limitations and qualifications: (a) the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally; (b) the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), and the
discretion of the court before which any proceeding therefor may be brought; (c)
public policy considerations which may limit the rights of parties to obtain
remedies; (d) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification or contribution
to a party with respect to a liability, whether because such indemnification or
contribution is contrary to public policy or otherwise; (e) we express no
opinion concerning the enforceability of the waiver of rights or defenses
contained in the Indenture; (f) the unenforceability of any provision requiring
the payment of attorneys' fees, except to the extent a court determines such
fees to be reasonable; (g) we express no opinion with respect to any provisions
of the Offered Debt Securities or the Indenture that may provide for interest on
interest or penalty interest or
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whether acceleration of the Offered Debt Securities may affect the
collectibility of that portion of the stated principal amount thereof which
might be determined to constitute unearned interest thereon; (h) requirements
that a claim with respect to any Offered Debt Securities denominated in a
currency, currency unit or composite currency other than United States dollars
(or a judgment denominated other than in United States dollars in respect of
such claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law; (i) governmental
authority to limit, delay or prohibit the making of payments outside the United
States or in foreign currencies, currency units or composite currencies; (j) we
express no opinion regarding the effectiveness of any waiver in respect of any
of the Offered Securities of any rights that a party has, or of duties that are
owed to it, as a matter of law, or that is broadly stated or does not describe
the right or duty purportedly waived with reasonably specificity; (k) we express
no opinion on the effect on the enforceability of the Debt Guarantees against
any Subsidiary Guarantor of any facts or circumstances that would constitute a
defense to the obligation of a surety, unless such defense has been waived
effectively by such Guarantor, and we also express no opinion as to the
effectiveness of any waiver of any such defense by any Guarantor; (l) the
Offered Securities being offered, issued and sold solely in the manner stated in
the Registration Statement and any appropriate prospectus supplement; and (m) in
the case of the Warrant Agreement, the Offered Warrants, the Deposit Agreement,
the Offered Depositary Shares, the Receipts, the Debt Guarantees, any
Certificates of Designations, any underwriting agreement and any other
agreements or instruments pursuant to which any Offered Securities or Secondary
Shares are to be issued or sold that come into existence after the date of this
opinion or that were otherwise not provided to us (including, without
limitation, any supplements to or other amendments of the Indenture), that such
agreements or instruments shall, if necessary, have been duly filed as exhibits
to the Registration Statement or duly incorporated therein by reference and that
there shall be no terms or provisions contained therein that would have the
effect, under applicable law, of vitiating or creating a contractual defense to
the validity and binding nature of such instrument or agreement, or that would
affect the validity of any of the opinions rendered herein.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also hereby consent to the use of our
name under the heading "Legal Matters" in the prospectus which forms a part of
the Registration Statement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission promulgated
thereunder.
Irell & Manella LLP
A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
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August 27, 2002
Page 9
Very truly yours,
/s/ Irell & Manella LLP