Atlantic Coast Entertainment Holdings, Inc.
c/o Sands Hotel & Casino
Indiana Avenue & Brighton Park
Atlantic City, NJ 08401 November 13, 2003
Re: Atlantic Coast Entertainment Holdings, Inc.
Registration Form S-4
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Ladies and Gentlemen:
We have acted as counsel to Atlantic Coast Entertainment Holdings,
Inc., a Delaware corporation (the "Company"), in connection with the public
offering by the Company of up to 10,000,000 shares (the "Shares") of the
Company's common stock, par value $0.01 per share (the "Common Stock") and up to
$110,000,000 principal amount of 3% Notes due 2008 (the "Notes", and together
with the Common Stock, the "Securities").
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates and written statements of certain
officers of the Company. We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such instruments, documents and
records as we have deemed relevant and necessary to examine for the purpose of
this opinion, including (i) the Registration Statement on Form S-4 (File
No.333-_______) filed with the Securities and Exchange Commission (the
"Commission") on _____, ___ under the Act (such Registration Statement, as so
amended, being hereinafter referred to as the "Registration Statement"); (ii) a
form of the proposed Notes; (iii) the form of the proposed Indenture, by and
among the Company, as issuer, ACE Gaming, LLC ("ACE"), as guarantor, and the
trustee, governing the Notes (the "Indenture"); (iv) the Amended and Restated
Indenture, dated as of October 12, 2001, by and among GB Property Funding
Corp.("Funding"), as issuer, GB Holdings, Inc. ("Parent") and Greate Bay Hotel
and Casino, Inc. ("Operating"), as guarantors, and Wells Fargo Bank Minnesota,
National Association ("Wells Fargo"), as trustee, governing the 11% Notes due
2005 issued by Funding; (v) the form of the proposed Amendment to the Amended
and Restated Indenture by and among Funding, as issuer, Parent and Operating, as
guarantors, and Wells Fargo, as trustee; (vi) the form of the proposed Second
Amended and Restated Indenture by and among the Company and Wells Fargo, as
trustee, (vii) the Certificate of Incorporation of the Company, as presently in
effect; (viii) the By-Laws of the Company, as presently in effect; (ix) the form
of the proposed Contribution Agreement by and among Parent, the Company,
Operating, and ACE, (x) the form of the proposed Merger Agreement among Parent,
Funding and Operating and (xi) certain resolutions of the Board of Directors of
the Company relating to the issuance and sale of the Securities and related
matters.
In connection with this opinion, we have assumed the legal capacity of
all natural persons, the accuracy and completeness of all documents and records
that we have reviewed, the genuineness of all signatures, the due authority of
the parties signing such documents, the authenticity of the documents submitted
to us as originals and the conformity to authentic original documents of all
documents submitted to us as certified, conformed or reproduced copies. In
making our examination of documents executed or to be executed by parties other
than the Company, we have assumed that such parties 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 the execution and delivery by such parties, of such documents and the
validity and binding effect thereof.
Based upon and subject to the foregoing, it is our opinion that:
1. When (i) the Registration Statement becomes effective and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended; (ii) the
Indenture has been duly executed and delivered; and (iii) the Notes have been
duly executed and authenticated in accordance with the terms of the Indenture,
the issuance of the Notes will have been duly authorized, and the Notes will be
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except to the extent that (a) enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, receivership, fraudulent conveyance,
moratorium, or other similar laws now or hereinafter in effect relating to
creditors' rights generally and (2) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity) and
(b) the waiver contained in Section 513 of the Indenture may be deemed
unenforceable; and
2. When issued in accordance with the terms of the Indenture, the Shares will be
validly issued, fully paid and nonassessable.
We also note that the Securities are subject to forfeiture and certain
other restrictions under certain provisions of New Jersey law as described in
the Registration Statement and insofar as our opinions may relate to matters
governed by the laws of the State of New Jersey, we have relied, without further
investigation, upon the opinion of Sterns & Weinroth as local counsel, a copy of
which is attached hereto as Exhibit A.
Our opinion expressed above is limited to the General Corporation Law
of the State of Delaware, including the applicable provisions of the
Constitution of the State of Delaware and the reported judicial decisions
interpreting such laws and provisions. This opinion is given as of the date
hereof and we assume no obligation to advise you of changes that may hereafter
be brought to our attention.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" 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 Act or the
rules and regulations of the Commission.
Very truly yours,
KATTEN MUCHIN ZAVIS ROSENMAN
By: /S/ Joel A. Yunis
-------------------------
Partner
_____, 2003
Katten Muchin Zavis Rosenman
575 Madison Avenue
New York, NY 10022
RE: CONSENT SOLICITATION AND OFFER TO EXCHANGE DETAILED IN THAT CERTAIN
FORM S-4 REGISTRATION STATEMENT ANTICIPATED TO BE FILED ON OR ABOUT
NOVEMBER 13, 2003 BY ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
("ATLANTIC") AND ACE GAMING, LLC ("ACE") WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION ("NOTE REGISTRATION STATEMENT")
AND
PROXY STATEMENT AND PROSPECTUS ANTICIPATED TO BE FILED ON OR ABOUT
NOVEMBER 13, 2003 BY ACE AS REGISTRANT WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION ("COMMON STOCK REGISTRATION
STATEMENT")
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Gentlemen:
We have acted as special regulatory counsel on gaming matters in the
State of New Jersey to Atlantic Coast Entertainment Holdings, Inc. ("Atlantic")
and ACE Gaming, LLC ("ACE", with Atlantic, the "Companies), in connection with
the above-referenced Note Registration Statement and Common Stock Registration
Statement (the "Registration Statements") with respect to matters relating to
the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et seq., to regulations
promulgated thereunder, N.J.A.C. 19:40-1.1 et seq. and the decisions of the
Casino Control Commission thereunder ("New Jersey Gaming Laws"). Capitalized
terms used but not otherwise defined herein shall have the respective ascribed
to them in the Registration Statements.
In connection with this opinion, we have reviewed originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents:
(a) Note Registration Statement;
(b) the Common Stock Registration Statement; and
Katten Muchin Zavis Rosenman
_______________, 2003
Page 2
(c) the Certificate of Incorporation of Atlantic.
We have also examined such other documents as we have considered
necessary or appropriate under the circumstances to render the opinions below.
In such examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, and the conformity and completeness to authentic original
documents of all documents submitted to us as certified, conformed or
photostatic copies.
In rendering the opinion below, the scope of our review has been
limited to a review of the New Jersey Gaming Laws. We do not hold ourselves out
as experts in and express no opinion as to the laws of any state or jurisdiction
other than New Jersey Gaming Laws. Accordingly, this opinion is confined to such
matters as are governed by New Jersey law.
Based upon the foregoing, and subject to the qualifications,
limitations, exceptions and assumptions hereinafter set forth, it is our opinion
that the provisions contained in section EIGHTH of the Certificate of
Incorporation of Atlantic regarding redemption of the securities of the
Corporation are required by the New Jersey Gaming Laws.
(a) We express no opinion herein with regard to any authorizations,
consents, or approvals of the Commission which may be required in connection
with the consummation of the transactions contemplated by the Registration
Statements.
(b) In acting as special gaming counsel for the Companies, we have
represented them on specific matters referred to us from time to time, but we
have not represented the Companies generally. We have made no independent
investigation of their files, nor have we made independent inquiries in
connection with this opinion as to factual matters.
(c) We do not hold ourselves as experts in and express no opinion as to
the laws of any state or jurisdiction other than the laws of the State of New
Jersey. In rendering the opinions set forth herein, the scope of our review has
been limited to our review of the New Jersey Casino Control Act and the
regulations thereunder.
(d) Our opinions set forth herein are based and rely upon the current
state of the law, and in all respects are subject to and may be limited by new
legislation and Commission regulations, as well as by developing administrative
and case law.
(e) We assume no obligation to update or supplement our opinions set
forth herein to reflect any facts or circumstances that may hereafter come to
our attention or any changes in laws that may hereafter occur.
(f) This letter is limited to the matters stated herein and no opinion
is implied or may be inferred beyond the matters stated. This letter is solely
for your benefit in connection
Katten Muchin Zavis Rosenman
__________________, 2003
Page 3
with the transactions referred to above. Without our prior written consent, this
letter may not be quoted in whole or in part or otherwise referred to in any
document and may not be furnished to or used by any other person or entity, and
no other person or entity shall be entitled to rely upon the opinions herein
expressed.
Very truly yours,
STERNS & WEINROTH
A Professional Corporation