DLA Piper Rudnick Gray Cary US LLP
1251 Avenue of the Americas
New York, New York 10020-1104
T 212.835.6000
F 212.835.6001
W www.dlapiper.com
April 21, 2006
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
100 South Bedford Road
Mt. Kisco, NY 10549
Ladies and Gentlemen:
We have acted as counsel to American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP"), and American Real Estate Finance Corp. ("AREP
Finance"), with respect to the preparation and filing of a Registration
Statement on Form S-3 (File No. 333-126069) with the Securities and Exchange
Commission (the "Commission") on June 23, 2005, as amended by Amendment No. 1 to
such Registration Statement to be filed with the Commission as of the date
hereof (as amended, the "Registration Statement"), in connection with the offer
and sale by AREP from time to time, pursuant to Rule 415 under the Securities
Act of 1933, as amended (the "Securities Act"), of:
(a) depositary units representing limited partner interests in AREP (the
"Depositary Units");
(b) preferred units of AREP having rights senior to the Depositary Units
(the "Preferred Units");
(c) debt securities, which may be co-issued by AREP Finance, and which may
be either senior debt securities or subordinated debt securities (the "Debt
Securities");
(d) a guarantee by AREP (the "Guarantee") with respect to any Debt
Securities issued by AREP Finance; and
(e) warrants to purchase Depositary Units, Preferred Units or Debt
Securities evidenced by warrant certificates independently or together with
any securities offered by a prospectus supplement (the "Warrants").
The Depositary units, the Preferred Units, the Debt Securities, the Guarantee
and the Warrants are collectively referred to herein as the "Securities" and
each, a "Security."
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
April 21, 2006
Page 2
In connection with the opinions expressed herein, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
or comparable documents, certificates of public officials and officers and
representatives of the general partner of AREP and the officers and
representatives of AREP Finance, and such other documents, records and
instruments, and we have made such inquiries of such officers and
representatives of the general partner of AREP and the officers and
representatives of AREP Finance, as we have deemed necessary or appropriate as a
basis for our opinion. In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. Based on the foregoing,
and subject to further limitations, qualifications and assumptions set forth
herein, we are of the opinion that:
(a) The Depositary Units, upon receipt by AREP of such lawful consideration
therefor as the Board of Directors of the general partner of AREP (or a
duly authorized committee thereof) may determine, will be validly issued,
fully paid and nonassessable.
(b) The Preferred Units, upon receipt by AREP of such lawful consideration
therefor as the Board of Directors of the general partner of AREP (or a
duly authorized committee thereof) may determine, will be validly issued,
fully paid and nonassessable.
(c) The Debt Securities and the Guarantee, upon receipt by AREP and AREP
Finance of such lawful consideration therefor as the Board of Directors of
the general partner of AREP and the Board of Directors of AREP Finance (or
a duly authorized committee thereof) may determine, will constitute valid
and binding obligations of AREP and AREP Finance, respectively.
(d) The Warrants, upon receipt by AREP of such lawful consideration
therefor as the Board of Directors of the general partner of AREP (or a
duly authorized committee thereof) may determine, will constitute valid and
binding obligations of AREP.
In rendering the foregoing opinions, we have assumed that: (i) the Registration
Statement, and any amendments thereto, will have become effective (and will
remain effective at the time of issuance of any Securities thereunder); (ii) a
prospectus supplement describing each class and/or series of Securities offered
pursuant to the Registration Statement, to the extent required by applicable law
and relevant rules and regulations of the Commission, will be timely filed with
the Commission; (iii) the definitive terms of each class and/or series of
Securities will have been established in accordance with the authorizing
resolutions of the Board of Directors of the general partner of AREP and the
Board of Directors of AREP Finance, respectively (or a duly
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
April 21, 2006
Page 3
authorized committee thereof), each of their respective organizational and
governing documents and applicable law; (iv) AREP and AREP Finance will issue
and deliver the Securities in the manner contemplated by the Registration
Statement and any Securities will have been duly authorized and reserved for
issuance; (v) the resolutions authorizing the issuance, offering and sale of the
Securities will have been adopted by the Board of Directors of the general
partner of AREP, if applicable, and the Board of Directors of AREP Finance and
will be in full force and effect at all times at which the Securities are
offered or sold by AREP and, if applicable, AREP Finance; (vi) a definitive
purchase, underwriting or similar agreement with respect to any Securities will
have been duly authorized and validly executed and delivered by the Board of
Directors of the general partner of AREP and the other parties thereto; and
(vii) all Securities will be issued in compliance with applicable federal and
state securities laws.
With respect to any Securities consisting of any series of Debt Securities and
with respect to the Guarantee, we have further assumed that: (i) such Debt
Securities and Guarantee will have been issued pursuant to an applicable
indenture that has been duly authorized, executed and delivered by AREP and AREP
Finance and the applicable trustee in a form approved by us, and such indenture
will have been qualified under the Trust Indenture Act of 1939 and will be
governed by and construed in accordance with New York law; and (ii) such Debt
Securities and Guarantee will be duly executed, authenticated, issued and
delivered in accordance with the provisions of the applicable indenture.
With respect to any Securities consisting of Preferred Units, we have further
assumed that AREP issues and delivers the units after an amendment to its
partnership agreement establishing the designations, preferences and rights of
the class or series of the Preferred Units being issued, and duly authorized,
executed and delivered by the general partner of AREP.
With respect to any Securities consisting of Warrants, we have further assumed
that (i) a Warrant agreement relating to the Warrants (the "Warrant Agreement")
to be entered into between AREP and an entity selected by AREP to act as the
Warrant agent (the "Warrant Agent") will have been duly authorized, executed and
delivered by the general partner of AREP, and (ii) the Warrants will be duly
authorized, executed and delivered by the general partner of AREP and the
Warrant Agent in accordance with the provisions of the Warrant Agreement.
The opinion expressed above is limited by, subject to and based on the
assumptions, limitations and qualifications set forth below:
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
April 21, 2006
Page 4
(a) The validity and binding effect of the Securities may be limited or
affected by bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws relating to or affecting creditors' rights
generally and by general equitable principles (regardless of whether such
validity and binding effect are considered in a proceeding in equity or at
law), and may be limited by applicable laws or policies underlying such
laws.
(b) The foregoing opinion is limited to the laws of the State of New York
and the Delaware General Corporation Law and the Delaware Revised Uniform
Limited Partnership Act. We do not express any opinion herein concerning
the laws of any other jurisdiction.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the prospectus included in the Registration
Statement. In giving this consent, we do not thereby admit that we are included
in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission.
Very truly yours,
/s/ DLA PIPER RUDNICK GRAY CARY US LLP