1
EXHIBIT 5.1
HOLT NEY ZATCOFF & WASSERMAN, LLP
American Realty Trust, Inc.
As of February 11, 1997
Page 1
HOLT NEY ZATCOFF & WASSERMAN, LLP
ATTORNEYS AT LAW
100 GALLERIA PARKWAY, SUITE 600
ATLANTA, GEORGIA 30339-5911
TELEPHONE 770-956-9600 FACSIMILE 770-956-1490
Charles D. Vaughn
e-mail cvaughn@hnzw.com
As of February 11, 1997
American Realty Trust, Inc.
10670 North Central Expressway
Suite 300
Dallas, Texas 75231
Re: Registration on Form S-4 under the Securities Act of 1933,
as amended (the "Act"), of an indeterminate number of shares of
the $2.00 Par Value Special Stock (the "Special Stock"), which
may be issued in series from time to time, of American Realty
Trust, Inc., a Georgia corporation ("ART")
Ladies and Gentlemen:
We have acted as counsel to ART with respect to the application and
interpretation of the Georgia Business Corporation Code (the "GBCC") in
connection with the preparation of the Registration Statement on Form S-4 (the
"Registration Statement") filed with the Securities and Exchange Commission
(the "SEC") under the Act relating to the offering from time to time of one or
more series of Special Stock (hereinafter referred to as "Preferred Shares"),
as set forth in the prospectus contained in the Registration Statement (the
"Prospectus") and as to be set forth in one or more supplements to the
Prospectus (each such supplement, a "Prospectus Supplement"). This Opinion
Letter is rendered at the request of ART to facilitate the registration of the
Preferred Shares on the Registration Statement.
This Opinion Letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards (the "Interpretive
Standards") Applicable to Legal Opinions to Third Parties in Corporate
Transactions adopted by the Legal Opinion Committee of the Corporate and
Banking Law Section of the State Bar of Georgia, which Interpretive Standards
are incorporated in this Opinion Letter by this reference.
2
HOLT NEY ZATCOFF & WASSERMAN, LLP
American Realty Trust, Inc.
As of February 11, 1997
Page 2
In the capacity described above, we have considered such matters of law
and of fact, including the examination of originals or copies, certified or
otherwise identified to our satisfaction, of such records and documents of ART,
certificates of officers and representatives of ART, certificates of public
officials and such other documents as we have deemed appropriate as a basis for
the opinions hereinafter set forth.
The opinions set forth herein are limited to the laws of the State of
Georgia.
Based upon the foregoing, as of this date, and subject to the
assumptions, limitations and qualifications set forth in the Interpretive
Standards and as set forth after the following numbered paragraphs, it is our
opinion that:
(1) ART is a corporation existing under the laws of the State of
Georgia.
(2) Each series of the Preferred Shares will be validly issued, fully
paid and nonassessable by ART when (i) the Registration Statement shall have
become effective under the Act; (ii) a Prospectus Supplement with respect to
such series shall have become effective under the Act; (iii) ART's Board of
Directors shall have duly adopted resolutions (the "Preferred Shares
Resolutions") authorizing the issuance and sale of such series as contemplated
in the Registration Statement, the Prospectus, and the applicable Prospectus
Supplement; (iv) Articles of Amendment of the Articles of Incorporation of ART
setting forth the terms of such series in accordance with the applicable
Preferred Shares Resolutions shall have been duly executed and filed with the
Secretary of State of the State of Georgia; and (v) certificates evidencing
such series shall have been duly issued in exchange for the consideration
specified in and as contemplated in the Prospectus, the applicable Prospectus
Supplement, and the applicable Preferred Shares Resolutions.
The opinions expressed herein are subject to the Interpretive Standards
and to the following assumptions, limitations and qualifications:
A. As to various questions of fact material to this opinion,
we have relied solely upon the statements and certifications of
Mr. Robert A. Waldman, Secretary of ART.
B. Other than as described in paragraph A above and elsewhere
herein, we have made no investigation regarding the accuracy or
truthfulness of any representations, warranties, statements of
fact or assumptions of fact contained in any documents, records,
instruments, letters or other writings examined by us, and we
express no opinion herein regarding the same.
3
HOLT NEY ZATCOFF & WASSERMAN, LLP
American Realty Trust, Inc.
As of February 11, 1997
Page 3
C. Other than resolutions adopted by the Board of Directors
of ART that authorize the filing of the Registration Statement,
certified as true and correct by Mr. Waldman, we have not
examined the minute book of ART, and we assume that no
resolutions of the Board of Directors modifying the Bylaws of ART
or its procedures for issuing shares are in effect.
D. We did not assist ART in its incorporation and
organization, and we assume that it was duly organized.
E. We expressly note that our opinion in paragraph (2) does
not mean that: (a) the authorization and issuance of each series
of the Preferred Shares will comply with agreements by which ART
is bound; (b) the authorization and issuance of each series of
the Preferred Shares will comply with the fiduciary duties of the
directors of ART; (c) the authorization and issuance of each
series of the Preferred Shares will comply with any law other
than the GBCC (e.g., federal or state securities laws); (d) the
consideration received for each series of the Preferred Shares
will be adequate as a matter of fairness to ART and its
shareholders or that ART will receive a reasonably equivalent
value and fair equivalent value in good faith for each series of
the Preferred Shares; (e) holders of the Preferred Shares will be
immune from other types of liabilities, such as liability for
distributions in violation of Section 640 of the GBCC, or under
the "piercing the corporate veil" theory; or (f) the directors
will not have unfairly diluted the investment value of existing
shareholders of ART. Our opinion in paragraph (2) assumes that
each of items (a), (b), (c), (d), (e) and (f) is in fact true.
F. Our opinion in paragraph (2) is subject to the exceptions
stated in paragraphs 23(i) and 23(ii) of the Interpretive
Standards, which make exception for the effect of, respectively,
bankruptcy and general principles of equity, as more fully
described therein.
G. This opinion is limited to the particular matters and the
particular transactions described herein, and no opinion should
be inferred or implied beyond these particular matters or these
particular transactions. This opinion is being provided solely
for the benefit of ART, and no other person or entity shall be
entitled to rely hereon without the express written consent of
this firm. This opinion may not be quoted from, in whole or in
part, or otherwise be referred to in any financial statement or
other document, nor filed with or furnished to any person or
entity other than ART and Andrews & Kurth, L.L.P., including, but
not limited to, any governmental agency, without the prior
written consent of this firm; provided, however, that this
opinion may be attached as an exhibit to the Form S-4 and
4
HOLT NEY ZATCOFF & WASSERMAN, LLP
American Realty Trust, Inc.
As of February 11, 1997
Page 4
delivered to the SEC therewith and our firm may be referenced
under the heading "Legal Matters" in the Prospectus.
Very truly yours,
HOLT NEY ZATCOFF & WASSERMAN, LLP
By: /s/ CHARLES D. VAUGHN
----------------------------------
Charles D. Vaughn, a partner
CDV:pg