Exhibit 5.1
[Letterhead of Richards, Layton & Finger]
August 26, 1999
Lodgian, Inc.
3445 Peachtree Road, N.E.
Suite 700
Atlanta, Georgia 30326
Re: Lodgian Capital Trust I
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Ladies and Gentlemen:
We have acted as special Delaware counsel for Lodgian, Inc., a Delaware
corporation (the "Company") and Lodgian Capital Trust I, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, as filed with the office of
the Secretary of State of the State of Delaware (the "Secretary of State") on
May 15, 1998;
(b) The Declaration of Trust of the Trust, dated as of May 15, 1998,
among the Company and the trustees named therein;
(c) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-1, including a preliminary prospectus with respect to
the Trust (the "Prospectus"), relating to the 7% Convertible Redeemable
Equity Structured Trust Securities-SM- of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), to be filed by the
Company and the Trust with the Securities and Exchange Commission on or about
August 26, 1999;
(d) The Amended and Restated Declaration of Trust of the Trust, dated
as of June 17, 1998 (including Exhibits A and B thereto) (the "Declaration"),
among the Company, the
Lodgian, Inc.
August 26, 1999
Page 2
trustees of the Trust named therein, and the holders, from time to time, of
the undivided beneficial interests in the assets of the Trust; and
(e) A Certificate of Good Standing for the Trust, dated August 26,
1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in
paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there
exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies
or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to
the subject matter thereof, including with respect to the creation, operation
and termination of the Trust, and that the Declaration and the Certificate of
Trust are in full force and effect and have not be amended, (ii) except to
the extent provided in paragraph 1 below, the due organization or due
formation, as the case may be, and valid existence in good standing of
each party to the documents examined by us under the laws of the jurisdiction
governing its organization or formation, (iii) the legal capacity of natural
persons who are parties to the documents examined by us, (iv) that each of the
parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security was issued by the Trust (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for such Preferred Security, in accordance with the Declaration
and (vii) that the Preferred Securities have been issued and sold to the
Preferred Security Holders in accordance with the Declaration. We have not
participated in the preparation of the Registration Statement or the
Prospectus and assume no responsibility for their contents.
Lodgian, Inc.
August 26, 1999
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders
thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Preferred Securities of the Trust represent valid and, subject
to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
are entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, 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 Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Richards, Layton & Finger
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