Exhibit 5.1
XXXXXX, XXXX & XXXXXXX
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
EXCHANGE PLACE
00 XXXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000-0000
TELEPHONE (000) 000-0000
FACSIMILE (000) 000-0000
TELEX 49615860
September 4, 1998
Fountain View, Inc.
00000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Re: Fountain View, Inc. - Registration of $120,000,000
Aggregate Principal Amount of 11 1/4% Senior Subordinated
Notes Due 2008, Series B on Form S-4
------------------------------------
Ladies and Gentlemen:
This opinion is furnished in connection with the registration, pursuant to
a Registration Statement on Form S-4 under the Securities Act of 1933, as
amended (the "Act"), filed with the Securities and Exchange Commission on June
19, 1998 (as amended, the "Registration Statement"), of $120,000,000 aggregate
principal amount of 11 1/4% Senior Subordinated Notes due 2008, Series B (the
"Exchange Notes") of Fountain View, Inc. (the "Company"), together with
guarantees thereof (the "Exchange Guarantees") by Fountain View Holdings, Inc.,
Locomotion Holdings, Inc. and Locomotion Therapy, Inc. (collectively, the
"Delaware Guarantors") and by Summit Care Corporation, Summit Care-California,
Inc., Summit Care Pharmacy, Inc., Summit Care Texas Equity, Inc., Summit Care
Texas, Xx. 0, Xxx., Xxxxxx Xxxx Xxxxx, Xx. 0, Inc., Summit Care Management
Texas, Inc., Summit Care Texas, L.P., AIB Corp., Alexandria Convalescent
Hospital, Inc., BIA Hotel Corp., Brier Oak Convalescent, Inc., Elmcrest
Convalescent Hospital, Fountainview Convalescent Hospital, Fountain View
Management, Inc., Rio Hondo Nursing Center, On-track Therapy Center, Inc., I.'N
O, Inc. and Sycamore Park Convalescent Hospital (collectively, the "Other
Guarantors"; the Delaware Guarantors and the Other Guarantors are sometimes
together referred to herein as the "Guarantors").
The Exchange Notes and the Exchange Guarantees will be offered in exchange
for the Company's outstanding 11 1/4% Senior Subordinated Notes due 2008 (the
"Outstanding Notes"), which have also been guaranteed by the Guarantors,
pursuant to the terms of
Fountain View, Inc.
September 4, 1998
Page 2
the exchange offer (the "Exchange Offer") set forth in the form of prospectus
included in the Registration Statement.
We have acted as counsel to the Company and the Guarantors in connection
with the foregoing registration of the Exchange Notes. We have examined and
relied upon the originals or copies, certified or otherwise identified to our
satisfaction, of such records, instruments, certificates, memoranda and other
documents as we have deemed necessary or advisable for purposes of this opinion
and have assumed, without independent inquiry, the accuracy of those documents.
In that examination, we have assumed the genuineness of all signatures, the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing such
documents.
As to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intent or other state of mind),
we have relied on the representations of the Company and the Guarantors, and we
have assumed, without independent inquiry, the accuracy of those
representations.
We have also assumed that the Indenture (as defined in the Registration
Statement) has been duly authorized and validly executed and delivered by each
of the Other Guarantors and that the Exchange Guarantees will be duly authorized
and validly executed by each of the Other Guarantors.
The opinion set forth below relating to the due authorization and valid
execution and delivery of the Indenture, the Exchange Notes and the Exchange
Guarantees (collectively, the "Operative Documents") by the Company and the
Delaware Guarantors is subject to the following general qualifications:
(i) as to any instrument delivered by the Company or the Guarantors as
contemplated by the Operative Documents, we assume that the Company or
the respective Guarantor has received the agreed to consideration
therefor;
Fountain View, Inc.
September 4, 1998
Page 3
(ii) as to any agreement to which the Company or a Guarantor is a party,
we assume that such agreement is the binding obligation of each party
thereto other than the Company or the Guarantors;
(iii) the enforceability of any obligation of the Company or the Guarantors
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshalling or other laws and rules of
law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights);
(iv) no opinion is given herein as to the enforceability of any particular
provision of any of the Operative Documents relating to remedies
after default or as to the availability of any specific or equitable
relief of any kind;
(v) no opinion is given herein as to the enforceability of any particular
provision of any of the Operative Documents relating to (A) waivers
of defenses, of rights to trial by jury, or rights to obtain
jurisdiction or venue and other rights or benefits bestowed by
operation of law, (B) waivers of provisions which are not capable of
waiver under Section 1-102(3) of the Uniform Commercial Code, or (C)
exculpation clauses, indemnity or contribution clauses and clauses
relating to releases or waivers of unmatured claims or rights; we
express no opinion as to the effect of suretyship defenses, or
defenses in the nature thereof, with respect to the obligor or of any
guarantor, joint obligor or surety;
(vi) with respect to any liquidated damages provisions, we have assumed
that the amount of the liquidated damages specified in such provision
bears a reasonable proportion to the probable loss from failure to
comply with the relevant covenant and the amount of actual loss is
incapable of precise estimation or difficult to estimate precisely;
and
(vii) the enforcement of any rights may in all cases be subject to an
implied duty of good faith and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
Fountain View, Inc.
September 4, 1998
Page 4
We do not hold ourselves out as experts in, and express no opinion as to,
the applicability or effect of the laws of any state or jurisdiction other than
the laws of the Commonwealth of Massachusetts, the General Corporation Law of
the State of Delaware and the federal law of the United States of America. We
note that the Operative Documents provide that they are to be governed by the
laws of the State of New York. We express no opinion as to the validity,
binding nature or enforceability of any of the Operative Documents. We
understand that you are receiving an opinion from Xxxxxxx, Xxxxxxx & Xxxxxxxx
LLP addressing, inter alia, the validity, binding nature and enforceability of
the Operative Documents, subject to any exceptions and assumptions set forth in
such opinion. We express no opinion as to, and assume compliance, with any
applicable, federal or state securities law.
We understand that all of the foregoing assumptions and limitations are
acceptable to you.
Based upon the foregoing, we are of the opinion that:
1. the Indenture has been duly authorized and validly executed and
delivered by the Company and the Delaware Guarantors;
2. the Exchange Guarantees have been duly authorized by the Delaware
Guarantors; and
3. the Exchange Notes, when issued by the Company in accordance with the
terms of the Indenture against receipt of Outstanding Notes pursuant to the
terms of the Exchange Offer, will have been duly authorized and validly executed
and delivered by the Company.
We consent to the filing of a copy of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the Registration
Statement under the caption "Legal Matters."
Very truly yours,
/s/ Xxxxxx Hall & Xxxxxxx
