EXHIBIT 5.01
SIDLEY & AUSTIN
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
DALLAS One First National Plaza WASHINGTON, D.C.
______ Chicago, Illinois 60603 ______
LOS ANGELES Telephone 312 853 7000 LONDON
______ Facsimile 312 853 7036 ______
NEW YORK SINGAPORE
Founded 1866 ______
TOKYO
WRITER'S DIRECT NUMBER
(312) 853-7557
January 28, 1997
Merrill Lynch Investment Partners Inc.,
as general partner of ML Principal Protection L.P.
Merrill Lynch World Headquarters
South Tower, 6th Floor
World Financial Center
New York, New York 10080-6106
RE: ML PRINCIPAL PROTECTION L.P.
$100,000,000 OF UNITS OF LIMITED PARTNERSHIP INTEREST (THE
"UNITS")
Dear Sir or Madam:
We refer to the Registration Statement on Form S-1 (Registration No. 333-
7593) (the "Registration Statement") filed by ML Principal Protection L.P.
(formerly, ML Principal Protection Plus L.P.), a Delaware limited partnership
(the "Partnership"), and ML Principal Protection Trading L.P. (formerly, ML
Principal Protection Plus Trading L.P.), a Delaware limited partnership (the
"Trading Partnership"), with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), declared effective on
November 29, 1996, as amended by Post-Effective Amendment No. 1 thereto filed
with the Securities and Exchange Commission on or about January 28, 1997.
Pursuant to Rule 429 under the Securities Act, the form of prospectus set forth
in the Registration Statement (the "Prospectus") also relates to the
Registration Statement on Form S-1 declared effective on July 14, 1994
(Registration No. 33-73914). Capitalized terms not defined herein have the
meanings specified in the Registration Statement.
We are familiar with the proceedings to date with respect to the
proposed issuance and sale of the Units pursuant to the Prospectus and have
examined such records, documents and questions of law, and satisfied ourselves
as to such matters of fact, as we have considered relevant and necessary as a
basis for this opinion.
For purposes of rendering this opinion, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as certified or photostatic copies
and the authenticity of the original of such copies.
Based on the foregoing, we are of the opinion that:
SIDLEY & AUSTIN CHICAGO
Merrill Lynch Investment Partners Inc.
January 28, 1997
Page 2
1. The Partnership and the Trading Partnership have each been duly
formed and are validly existing in good standing as limited partnerships under
the Delaware Revised Uniform Limited Partnership Act (the "Act").
2. The General Partner has taken all necessary corporate action
required to be taken by it to authorize the issuance and sale of the Units to
the Limited Partners and to authorize the admission to the Partnership of the
Limited Partners as limited partners of the Partnership.
3. Assuming (i) the due authorization, execution and delivery to the
General Partner of a Subscription Agreement by each subscriber for Units (the
"Subscribers"), (ii) the due acceptance by the General Partner of each
Subscription Agreement and the due acceptance by the General Partner of the
admission of each of the Subscribers as limited partners of the Partnership,
(iii) the payment by each Subscriber of the full consideration due for the Units
to which it subscribed, (iv) that the books and records of the Partnership set
forth all information required by the Limited Partnership Agreement and the Act,
including all information with respect to all persons and entities to be
admitted as Partners and their contributions to the Partnership, (v) that the
Subscribers, as limited partners of the Partnership, do not participate in the
control of the business of the Partnership within the meaning of the Act, (vi)
that the Units are offered and sold as described in the Prospectus and the
Limited Partnership Agreement and (vii) that the Subscribers meet all of the
applicable suitability standards set forth in the Prospectus and that the
representations and warranties of the Subscribers in their respective
Subscription Agreements are true and correct, the Units to be issued to the
Subscribers will represent valid and legally issued limited partner interests in
the Partnership and will be fully paid and nonassessable limited partner
interests in the Partnership, as to which the Subscribers, as limited partners
of the Partnership, will have no liability in excess of their obligations to
make contributions to the Partnership, their obligations to make other payments
provided for in the Limited Partnership Agreement and their share of the
Partnership's assets and undistributed profits (subject to the obligation of a
Limited Partner to repay funds distributed to such Limited Partner by the
Partnership in certain circumstances).
4. There are no provisions in the Limited Partnership Agreement the
inclusion of which, subject to the terms and conditions therein, would cause the
Limited Partners, as limited partners of the Partnership, to be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act.
This opinion is limited to the Act and the General Corporation Law of
the State of Delaware. We express no opinion as to the application of the
securities or blue sky laws of the various states (including the State of
Delaware) to the sale of the Units.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement.
Very truly yours,
SIDLEY & AUSTIN