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Exhibit 5.1
KELLEY DRYE & WARREN LLP
101 Park Avenue
New York, New York 10178
September 12, 2000
Viatel, Inc.
Viatel Financing Trust I
685 Third Avenue
New York, New York 10017
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to Viatel, Inc., a Delaware corporation
(the "Company"), and Viatel Financing Trust I, a business trust formed under the
Business Trust Act of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. L. Sec. 3801 et. seq.) (the "Trust"), in connection with
the preparation of the Registration Statement on Form S-3 (such Registration
Statement being hereinafter referred to as the "Registration Statement") to be
filed by the Company and the Trust with the Securities and Exchange Commission
(the "Commission") on the date hereof with respect to the registration under the
Securities Act of 1933, as amended (the "Act"), (i) by the Trust of 3,600,000
7 3/4% Trust Convertible Preferred Securities (the "Convertible Preferred
Securities"); (ii) by the Company of its guarantee of payments of cash
distributions and payments on liquidation of the Trust or redemption of the
Convertible Preferred Securities pursuant to the Preferred Securities Guarantee
Agreement (the "Guarantee Agreement"), (iii) by the Company of $180,000,000
aggregate principal amount of its 7 3/4% Convertible Junior Subordinated
Debentures due April 15, 2015 (the "Convertible Debentures") and (iv) by the
Company of such number of shares of common stock of the Company, par value $0.01
per share ("Company Common Stock"), as are issuable upon conversion of the
Convertible Debentures and such indeterminate number of shares of Company Common
Stock as may be issuable pursuant to certain anti-dilution adjustments.
The Convertible Preferred Securities were issued pursuant to the Amended
and Restated Declaration of Trust of the Trust, dated as of April 12, 2000 (the
"Declaration"), among Michael J. Mahoney, Allan L. Shaw and James P. Prenetta,
as regular trustees, The Bank of New York, as trustee (the "Institutional
Trustee"), The Bank of New York (Delaware), as Delaware trustee and the Company,
as sponsor and debenture issuer.
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
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In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement; (ii) an executed copy of the Registration Rights Agreement, dated as
of April 6, 2000 (the "Registration Rights Agreement"), among the Company, the
Trust and Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc. and Banc
of America Securities LLC; (iii) an executed copy of the Indenture, dated as of
April 12, 2000, between The Bank of New York, as trustee, and the Company; (iv)
the form of the Convertible Preferred Securities and a specimen certificate
thereof; (v) the form of the Convertible Debentures and a specimen certificate
thereof; (vi) the Guarantee Agreement; (vii) the Amended and Restated
Certificate of Incorporation and Third Amended and Restated By-Laws of the
Company; (viii) the Certificate of Trust of the Trust filed with the Secretary
of State of the State of Delaware on March 30, 2000; and (ix) the Declaration.
We have also examined originals or copies, certified or otherwise identified to
our satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
The documents referred to in clauses (ii), (iii), (vi), (viii) and (ix) are
hereinafter referred to as the "Operative Documents".
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company and the
Trust, we have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all action, corporate or other, and execution and delivery by
such parties of such documents and the validity and binding effect thereof on
such parties.
Members of our firm are admitted to the Bar of the State of New York, and
we do not express any opinion as to the laws of any jurisdiction other than the
laws of the State of New York, the Delaware General Corporation Law (the "DGCL")
and the Business Trust Act of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Convertible Preferred Securities have been duly authorized by the
Declaration and are duly and validly issued and, subject to the qualifications
set forth herein, fully paid and nonassessable undivided beneficial interests in
the assets of the Trust. The holders of the Convertible Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the DGCL. We note that the holders of the Convertible Preferred
Securities may be obligated, pursuant to the Declaration, (A) to provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of certificates representing the
Convertible Preferred Securities and the issuance of replacement certificates
representing the Convertible Preferred Securities, and (B) to provide security
or indemnity in connection with requests of or directions to the Institutional
Trustee to exercise its rights and powers under the Declaration.
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2. The Guarantee Agreement has been duly authorized, executed and
delivered by the Company, and is a valid, legal and binding agreement of the
Company in favor of the holders of Convertible Preferred Securities, enforceable
against the Company in accordance with its terms, except (a) to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law), and
(b) we express no opinion regarding the enforceability or effect of Section 8.2
of the Guarantee Agreement.
3. The Convertible Debentures have been duly authorized, executed, issued
and delivered by the Company, and constitute valid, legal and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except (a) to
the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and (b) we express no opinion regarding the enforceability or effect of
Section 6.7 of the Indenture.
4. The shares of Company Common Stock initially issuable upon conversion
of the Convertible Subordinated Debentures have been duly authorized and
reserved for issuance by the Company and, if and when issued, upon conversion of
the Convertible Subordinated Debentures in accordance with the provisions of the
Indenture, at conversion prices at or in excess of the par value of such shares
of Company Common Stock, such shares of Company Common Stock will be validly
issued, fully paid and nonassessable.
5. 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. This opinion is expressed as of the
date hereof, and we disclaim any undertaking to advise you of any subsequent
changes in the facts stated or assumed herein or of any subsequent changes in
applicable law.
Very truly yours,
/s/ KELLEY DRYE & WARREN LLP
