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[Letterhead of Morris, Nichols, Arsht & Tunnell]
Exhibit 5.2
June 29, 1999
American Financial Capital Trust II
c/o American Financial Group, Inc.
One East Fourth Street
Cincinnati, OH 45202
Re: American Financial Capital Trust II
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Ladies and Gentlemen:
We have acted as special Delaware counsel to American
Financial Capital Trust II, a Delaware statutory business trust (the "Trust"),
in connection with certain matters relating to the formation of the Trust and
the proposed issuance of preferred securities in the Trust ("Preferred
Securities") to beneficial owners pursuant to and as described in the
Registration Statement (and the prospectus forming a part thereof) on Form S-3
filed with the Securities and Exchange Commission (the "Commission") by American
Financial Group, Inc., an Ohio corporation (the "Company"), and the Trust on or
about the date hereof (the "Registration Statement").
In rendering this opinion, we have examined copies of the
following documents in the forms provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "State Office") on February 4, 1997 (the "Certificate"); a Declaration of
Trust of the Trust dated as of February 3, 1997 (the "Original Governing
Instrument"); the Registration Statement; the amended and restated declaration
of trust of American Financial Capital Trust I attached as an exhibit to
Registration Statement No. 333-12537 on Form S-3 filed with the Commission on
September 24, 1996, as amended by Pre-Effective Amendment Nos. 1 and 2 thereto
(the "AFC Trust I Governing Instrument"); and a certification of good standing
of the Trust obtained as of a recent date from the State Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents
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American Financial Capital Trust II
c/o American Financial Group, Inc.
June 29, 1999
Page 2
submitted to us as drafts or copies or forms of documents to be executed and the
legal capacity of natural persons to complete the execution of documents. We
have further assumed for purposes of this opinion: (i) the due formation or
organization, valid existence and good standing of each entity that is a party
to any of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents; (iii) that the Company, The Bank of New York, The
Bank of New York (Delaware) and the regular trustees of the Trust will duly
authorize, execute and deliver an amended and restated declaration of trust in
the form of the AFC Trust I Governing Instrument (the "Governing Instrument")
and all other documents contemplated thereby or by the Registration Statement to
be executed in connection with the issuance by the Trust of Preferred Securities
prior to the first issuance of the Preferred Securities; (iv) that the Preferred
Securities will be offered and sold pursuant to the prospectus forming a part of
the Registration Statement and a prospectus supplement thereto (collectively,
the "Prospectus") that will be consistent with, and accurately describe, the
terms of the Governing Instrument and all other relevant documents; (v) that no
event has occurred subsequent to the filing of the Certificate, or will occur
prior to the issuance of the Preferred Securities, that would cause a
dissolution or liquidation of the Trust under the Original Governing Instrument
or the Governing Instrument, as applicable; (vi) that the activities of the
Trust have been and will be conducted in accordance with the Original Governing
Instrument or the Governing Instrument, as applicable, and the Delaware Business
Trust Act, 12 DEL. C. section 3801 ET SEQ. (the "Delaware Act"); (vii) that
prior to the first issuance of the Preferred Securities, payment of the required
consideration therefor will have been made in accordance with the terms and
conditions of the Governing Instrument and as described in the Prospectus, and
that the Preferred Securities are otherwise issued and sold in accordance with
the terms, conditions, requirements and procedures set forth in the Governing
Instrument and as described in the Prospectus; and (viii) that the documents
examined by us are in full force and effect, express the entire understanding of
the parties thereto with respect to the subject matter thereof and have not been
amended, supplemented or otherwise modified, except as herein referenced. No
opinion is expressed with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. We have not participated in the
preparation of the Registration Statement or any other offering materials
relating to the Preferred Securities and we assume no responsibility for their
contents. As to any fact material to our opinion, other than those assumed, we
have relied without independent investigation on the above-referenced documents
and on the accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that, upon issuance, the
Preferred Securities will constitute validly issued and, subject to the
qualifications set forth below, fully paid and nonassessable beneficial
interests in the assets of the Trust. We note that pursuant to Section 11.04 of
the Governing Instrument, the Trust may withhold amounts otherwise distributable
to a Preferred Security holder and pay over such amounts to the applicable
jurisdictions in accordance with federal, state and local
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American Financial Capital Trust II
c/o American Financial Group, Inc.
June 29, 1999
Page 3
law and any amount withheld will be deemed to have been distributed to such
Preferred Security holder and that, pursuant to the Governing Instrument,
Preferred Security holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name under the heading
"LEGAL MATTERS" in the prospectus forming a part thereof. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Commission thereunder. This opinion
speaks only as of the date hereof and is based on our understandings and
assumptions as to present facts, and on our review of the above referenced
documents and the application of Delaware law as the same exist as of the date
hereof, and we undertake no obligation to update or supplement this opinion
after the date hereof for the benefit of any person or entity with respect to
any facts or circumstances that may hereafter come to our attention or any
changes in facts or law that may hereafter occur or take effect. This opinion is
intended solely for the benefit of the addressee hereof in connection with the
matters contemplated hereby and may not be relied on by any other person or
entity or for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL