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Exhibit 5
September 29, 1998
Pen Holdings, Inc.
5110 Maryland Way, Suite 300
Brentwood, TN 37027
Ladies and Gentlemen:
We have acted as special counsel to Pen Holdings, Inc., a Tennessee
corporation ("Pen" or the "Registrant"), in connection with the proposed
exchange (the "Exchange") by Pen of 9-7/8% Series B Senior Notes Due 2008 ("New
Notes") for an equal principal amount of its outstanding 9-7/8% Senior Notes Due
2008 ("Old Notes"). Each of the capitalized terms used herein and not defined
herein shall have the meaning ascribed to them in the registration statement
(the "Registration Statement") to which this opinion is an exhibit.
In connection with the proposed Exchange, we have examined (i) the
charter documents and bylaws of each of the Company and the Guarantors (except
for The Elk Horn Coal Corporation ("Elk Horn")) each as presently in effect and
(ii) the forms of the amended and restated certificate of incorporation (the
"Amended and Restated Elk Horn Certificate") and amended and restated bylaws
(the "Amended and Restated Elk Horn Bylaws") of Elk Horn filed as exhibits to
the Registration Statement, the Company's and the Guarantors' relevant corporate
proceedings, the draft Registration Statement on Form S-4 covering the proposed
Exchange (the "Registration Statement"), including the Prospectus filed as a
part of the Registration Statement, the Indenture dated June 8, 1998, in respect
of the Old Notes and the New Notes (the "Indenture"), and such other documents,
records, certificates of public officials, statutes and decisions as we
considered necessary to express the opinions contained herein. In the
examination of such documents, we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals and the
conformity to the original documents of all documents submitted to us as
certified or photostatic copies.
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Pen Holdings, Inc.
September 29, 1998
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We understand that the New Notes are to be issued to the holders of the
Old Notes in the Exchange and are to be available for resale by such holders,
all in the manner described in the Prospectus, which is a part of the
Registration Statement, and in the Indenture.
Based on the foregoing, we are of the opinion that, upon the approval
of the Amended and Restated Elk Horn Certificate by the board of directors and
the sole shareholder of Elk Horn, the approval of the Amended and Restated Elk
Horn Bylaws by the board of directors of Elk Horn and the filing of the the
Amended and Restated Elk Horn Certificate with the Secretary of State in the
State of West Virginia that:
1. The issuance of the New Notes to the holders of the Old Notes
pursuant to the terms of the Exchange and the Indenture have
been duly authorized by proper corporate action of the
Registrant.
2. The guarantees to be endorsed on the New Notes have been duly
authorized by proper corporate action by each of the
Guarantors.
3. When the Registration Statement has been declared effective by
order of the Securities and Exchange Commission (the
"Commission"), the New Notes, having been (i) executed by the
Company and authenticated by the Trustee and (ii) duly issued
to and exchanged for the Old Notes, all in accordance with the
terms of the Exchange, the Indenture and the Registration
Statement, will be validly issued and will constitute binding
obligations of the Registrant, subject, as to enforcement (A)
to any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
relating to or affecting creditors' rights and remedies
generally and (B) to general principles of judicial discretion
and equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity or in a
bankruptcy proceeding and except that (x) rights to
contribution or indemnification may be limited by the laws,
rules or regulations of any governmental authority or agency
thereof or by public policy and (y) waivers as to usury, stay
or extension laws may be unenforceable).
4. When the Registration Statement has been declared effective by
order of the Commission, the guarantees to be endorsed on the
New Notes, having been executed by the Guarantors and
authenticated by the Trustee in accordance with the terms of
the Exchange, the Indenture and the Registration Statement,
will be validly issued and will constitute binding obligations
of the respective Guarantors, subject, as to enforcement (i)
to any applicable bankruptcy, insolvency, fraudulent
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Pen Holdings, Inc.
September 29, 1998
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conveyance, reorganization, moratorium and similar laws
relating to or affecting creditors' rights and remedies
generally and (ii) to general principles of judicial
discretion and equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in
equity or in a bankruptcy proceeding and except that (A)
rights to contribution or indemnification may be limited by
the laws, rules or regulations of any governmental authority
or agency thereof or by public policy and (B) waivers as to
usury, stay or extension laws may be unenforceable).
We express no opinion whether a subsidiary may guarantee or otherwise
become liable for, or pledge its assets to secure, indebtedness incurred by its
parent, except to the extent such subsidiary may be determined to have benefited
from the occurrence of such indebtedness by its parent or whether such benefit
may be measured other than by the extent to which the proceeds of the
indebtedness incurred by the parent are directly or indirectly made available to
such subsidiary for its corporate purposes.
The opinions expressed herein are limited to and concern only the
effect of the corporate law of the State of Delaware and the laws of the State
of New York and United States of America, without regard to conflict or choice
of law provisions, in each case as they currently exist.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to any reference to us contained under the caption
Legal Matters in the Prospectus which is a part hereof.
Sincerely,
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
By: /s/ RONALD BASSO
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RB/mm