EX-5.2 4 dex52.htm OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Opinion of Skadden, Arps, Slate, Meagher & Flom LLP

EXHIBIT 5.2

[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]

April 20, 2009

KAR Holdings, Inc.

13085 Hamilton Crossing Boulevard

Carmel, Indiana 46032

 

Re:    Registration Statement on Form S-1 and Post-Effective Amendment
   No. 2 to Form S-1 Registration Statement (File No.: 333-149137)
   (collectively, the “Registration Statement”)
    

Ladies and Gentlemen:

We have acted as special counsel to KAR Holdings, Inc., a Delaware corporation (the “Company”), in connection with the registration of (i) $150,000,000 aggregate principal amount of Floating Rate Senior Notes due 2014 (the “Floating Notes”) and $450,000,000 aggregate principal amount of 8 3/4% Senior Notes due 2014 (the “Fixed Notes” and, together with the Floating Notes, the “Senior Notes”) and, in each case, the applicable Senior Guarantees (defined below), and (ii) $425,000,000 aggregate principal amount of 10% Senior Subordinated Notes due 2015 (the “Subordinated Notes” and, together with the Senior Notes, the “Notes”) and the Subordinated Guarantees (defined below), each of which may be offered and sold from time to time by Goldman, Sachs & Co. in market-making transactions, in each case pursuant to the Registration Statement filed by the Company and the Guarantors (defined below) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”).

The Floating Notes were issued under an indenture dated as of April 20, 2007, among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated December 26, 2007, among the Company, the guarantors party thereto and the Trustee, the Second Supplemental Indenture, dated January 22, 2008, among the Company, the guarantors party thereto and the Trustee, the Third Supplemental Indenture, dated May 6, 2008, among the Company, Auto Disposal of Bowling Green, Inc., Auto Disposal of


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April 20, 2009

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Chattanooga, Inc., Auto Disposal of Memphis, Inc., Auto Disposal of Nashville, Inc., Auto Disposal of Paducah, Inc., Salvage Disposal Company of Georgia, ADESA Minnesota, LLC and ADESA Missouri Redevelopment Corporation (collectively, the “Third Supplemental Indenture Guarantors”), the other guarantors party thereto and the Trustee, the Fourth Supplemental Indenture, dated September 30, 2008, among the Company, LiveBlock Auctions International, Inc. and Live Global Communications USA Incorporated (collectively, the “Fourth Supplemental Indenture Guarantors”), the other guarantors party thereto and the Trustee, and the Fifth Supplemental Indenture, dated March 26, 2009, among the Company, CarBuyCo, LLC (together with the Third Supplemental Indenture Guarantors and the Fourth Supplemental Indenture Guarantors, the “Additional Guarantors”), the other guarantors party thereto and the Trustee (as so supplemented, the “Floating Indenture”). The Floating Indenture provides for the guarantee of the Floating Notes (the “Floating Guarantees”) by certain subsidiaries of the Company incorporated or formed pursuant to the laws of the State of Delaware or New York and listed on Schedule I hereto (the “DE/NY Guarantors”) and other subsidiaries listed on Schedule II hereto (the “Non-DE/NY Guarantors” and, together with the DE/NY Guarantors, the “Guarantors”).

The Fixed Notes were issued under an indenture, dated as of April 20, 2007, among the Company, the guarantors named therein and the Trustee, as supplemented by the First Supplemental Indenture, dated December 26, 2007, among the Company, the guarantors party thereto and the Trustee, the Second Supplemental Indenture, dated January 22, 2008, among the Company, the guarantors party thereto and the Trustee, the Third Supplemental Indenture, dated May 6, 2008, among the Company, the Third Supplemental Indenture Guarantors, the other guarantors party thereto and the Trustee, the Fourth Supplemental Indenture, dated September 30, 2008, among the Company, the Fourth Supplemental Indenture Guarantors, the other guarantors party thereto and the Trustee, and the Fifth Supplemental Indenture, dated March 26, 2009, among the Company, CarBuyCo, LLC the other guarantors party thereto and the Trustee (as so supplemented, the “Fixed Indenture”). The Fixed Indenture provides for the guarantee of the Fixed Notes (the “Fixed Guarantees” and, together with the Floating Guarantees, the “Senior Guarantees”) by the Guarantors.

The Subordinated Notes were issued under an indenture, dated as of April 20, 2007, among the Company, the guarantors named therein and the Trustee, as supplemented by the First Supplemental Indenture, dated December 26, 2007, among the Company, the guarantors party thereto and the Trustee, the Second Supplemental Indenture, dated January 22, 2008, among the Company, the guarantors party thereto and the Trustee, the Third Supplemental Indenture, dated May 6, 2008, among the Company, the Third Supplemental Indenture Guarantors, the other guarantors party thereto and the Trustee, the Fourth Supplemental Indenture, dated September 30, 2008, among the Company, the Fourth Supplemental Indenture Guarantors, the other guarantors party thereto and the Trustee, and the Fifth Supplemental Indenture, dated March 26, 2009, among the Company, CarBuyCo,


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LLC, the other guarantors party thereto and the Trustee (as so supplemented, the “Subordinated Indenture” and, together with the Floating Indenture and the Fixed Indenture, the “Indentures”). The Subordinated Indenture provides for the guarantee of the Subordinated Notes (the “Subordinated Guarantees” and, together with the Senior Guarantees, the “Guarantees”) by the Guarantors.

The Floating Notes were exchanged by the Company for $150,000,000 aggregate principal amount of its outstanding Floating Rate Senior Notes due 2014; the Fixed Notes were exchanged by the Company for $450,000,000 aggregate principal amount of its outstanding 8 3/4% Fixed Rate Senior Notes due 2014; and the Subordinated Notes were exchanged by the Company for $425,000,000 aggregate principal amount of its outstanding 10% Senior Subordinated Notes due 2015 (collectively, the “Original Notes”), in each case pursuant to a Registration Statement on Form S-4 filed with the SEC on January 25, 2008, as amended by Amendment No. 1 thereto filed with the SEC on February 8, 2008 (the “Exchange Offer Registration Statement”). The foregoing exchange offers are referred to herein collectively as the “Exchange Offer.”

This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.

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 Exchange and Registration Rights Agreement, dated as of April 20, 2007, by and among the Company, the guarantors named in the respective Indentures, and Goldman, Sachs & Co., Bear, Stearns & Co. Inc., UBS Securities LLC and Deutsche Bank Securities Inc., as representatives of the several Initial Purchasers as defined therein (the “Registration Rights Agreement”);

 

  (iii) executed copies of the Indentures;

 

  (iv) the Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), on Form T-1, of the Trustee with respect to the Floating Indenture, filed as an exhibit to the Exchange Offer Registration Statement;

 

  (v) the Statement of Eligibility and Qualification under the Trust Indenture Act, on Form T-1, of the Trustee with respect to the Fixed Indenture, filed as an exhibit to the Exchange Offer Registration Statement; and


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  (vi) the Statement of Eligibility and Qualification under the Trust Indenture Act, on Form T-1, of the Trustee with respect to the Subordinated Indenture, filed as an exhibit to the Exchange Offer Registration Statement; and

 

  (vii) the form of the Notes, included as an exhibit to the applicable Indentures.

We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and the Guarantors and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company, the Guarantors and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinion set forth below.

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 facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents, we have assumed that the parties thereto, other than the Company and the DE/NY Guarantors, had 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 on such parties. We have also assumed that each of the Guarantors has been duly organized and is validly existing in good standing, and has requisite legal status and legal capacity, under the laws of the respective jurisdictions of organization or incorporation, as applicable, and that each of the Guarantors, other than the DE/NY Guarantors, has complied and will comply with all aspects of the laws of all relevant jurisdictions in connection with the transactions contemplated by, and the performance of its obligations under, the Indentures, the Registration Rights Agreement, the Notes and the Guarantees (collectively, the “Transaction Documents”), other than the laws of the State of New York in so far as we express our opinion herein. As to any facts material to the opinion expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company, the Guarantors and others and of public officials.

The opinion set forth below is subject to the following further qualifications, assumptions and limitations:

(a) we have assumed that the execution and delivery by the Company and the Guarantors of the Transaction Documents and the performance by the Company and the Guarantors of their respective obligations thereunder do not and will not violate, conflict with or constitute a default under any agreement or instrument to which the Company, the Guarantors or any of their properties are subject;


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(b) the validity or enforcement of any agreements or instruments may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law); and

(c) we do not express any opinion as to the applicability or effect of any fraudulent transfer, preference or similar law on the Transaction Documents or any transactions contemplated thereby.

Our opinion set forth herein is limited to the laws, rules and regulations of the State of New York and the federal laws, rules and regulations of the United States of America, in each case that, in our experience, are normally applicable to transactions of the type contemplated by the Registration Statement and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”). We do not express any opinion with respect to the laws of any jurisdiction other than the Opined on Law or as to the effect of any such non-opined on law on the opinion herein stated.

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that the Guarantees of the Additional Guarantors have been duly executed and delivered by the Additional Guarantors in accordance with the provisions of the applicable Indenture (to the extent such execution and delivery are matters governed by the laws of the State of New York), and the Guarantee of each Additional Guarantor constitutes valid and binding obligations of such Additional Guarantor, enforceable against such Additional Guarantor in accordance with its terms.

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 prospectus included 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,
/s/    Skadden, Arps, Slate, Meagher & Flom LLP

 


Schedule I

DE/NY Guarantors

 

1. ADESA, Inc., a Delaware corporation

 

2. ADESA Arkansas, LLC, a Delaware limited liability company

 

3. ADESA New York, LLC, a New York limited liability company

 

4. Axle Holdings, Inc., a Delaware corporation

 

5. IAA Acquisition Corp., a Delaware corporation

 

6. Insurance Auto Auctions Corp., a Delaware corporation

 


Schedule II

Non-DE/NY Guarantors

 

1. A.D.E. of Ark-La-Tex, Inc., a Louisiana corporation

 

2. A.D.E. of Knoxville, LLC, a Tennessee limited liability company

 

3. ADESA Ark-La-Tex, LLC, a Louisiana limited liability company

 

4. ADESA Atlanta, LLC, a New Jersey limited liability company

 

5. ADESA Birmingham, LLC, an Alabama limited liability company

 

6. ADESA California, LLC, a California limited liability company

 

7. ADESA Charlotte, LLC, a North Carolina limited liability company

 

8. ADESA Colorado, LLC, a Colorado limited liability company

 

9. ADESA Corporation, LLC, an Indiana limited liability company

 

10. ADESA Dealer Services, LLC, a Indiana limited liability company

 

11. ADESA Des Moines, LLC, an Iowa limited liability company

 

12. ADESA Florida, LLC, a Florida limited liability company

 

13. ADESA Impact Texas, LLC, a Texas limited liability company

 

14. ADESA Indianapolis, LLC, an Indiana limited liability company

 

15. ADESA Lansing, LLC, a Michigan limited liability company

 

16. ADESA Lexington, LLC, a Kentucky limited liability company

 

17. ADESA Mexico, LLC, an Indiana limited liability company

 

18. ADESA Minnesota, LLC, a Minnesota limited liability company

 

19. ADESA Missouri, LLC, a Missouri limited liability company

 

20. ADESA Missouri Redevelopment Corporation, a Missouri corporation

 

21. ADESA New Jersey, LLC, a New Jersey limited liability company

 

22. ADESA Ohio, LLC, an Ohio limited liability company

 

23. ADESA Oklahoma, LLC, an Oklahoma limited liability company

 

24. ADESA Pennsylvania, LLC, a Pennsylvania limited liability company

 

25. ADESA Phoenix, LLC, a New Jersey limited liability company

 

26. ADESA San Diego, LLC, a California limited liability company

 

27. ADESA South Florida, LLC, an Indiana limited liability company

 

28. ADESA Southern Indiana, LLC, an Indiana limited liability company

 

29. ADESA Texas, Inc., a Texas corporation


30. ADESA Virginia, LLC, a Virginia limited liability company

 

31. ADESA Washington, LLC, a Washington limited liability company

 

32. ADESA Wisconsin, LLC, a Wisconsin limited liability company

 

33. ADS Ashland, LLC, an Ohio limited liability company

 

34. ADS Priority Transport Ltd., an Ohio limited liability company

 

35. AFC Cal, LLC, a California limited liability company

 

36. Asset Holdings III, L.P., an Ohio limited partnership

 

37. Auto Dealers Exchange of Concord, LLC, a Massachusetts limited liability company

 

38. Auto Dealers Exchange of Memphis, LLC, a Tennessee limited liability company

 

39. Auto Disposal Systems, Inc., an Ohio corporation

 

40. Auto Disposal of Bowling Green, Inc., a Tennessee corporation

 

41. Auto Disposal of Chattanooga, Inc., a Tennessee corporation

 

42. Auto Disposal of Memphis, Inc., a Tennessee corporation

 

43. Auto Disposal of Nashville, Inc., a Tennessee corporation

 

44. Auto Disposal of Paducah, Inc., a Tennessee corporation

 

45. Automotive Finance Consumer Division, LLC, an Indiana limited liability company

 

46. Automotive Finance Corporation, an Indiana corporation

 

47. Automotive Recovery Services, Inc., an Indiana corporation

 

48. AutoVIN, Inc., an Indiana corporation

 

49. CarBuyCo, LLC, a North Carolina limited liability company

 

50. Dent Demon, LLC, an Indiana limited liability company

 

51. IAA Services, Inc., an Illinois corporation

 

52. Insurance Auto Auctions, Inc., an Illinois corporation

 

53. LiveBlock Auctions International, Inc., a Nevada corporation

 

54. PAR, Inc., an Indiana corporation

 

55. Salvage Disposal Company of Georgia, a Georgia corporation

 

56. Sioux Falls Auto Auction, Inc., a South Dakota corporation

 

57. Tri-State Auction Co., Inc., a North Dakota corporation

 

58. Zabel & Associates, Inc., a North Dakota corporation