Exhibit 12(a)
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 | | SIDLEY AUSTIN LLP
787 SEVENTH AVENUE
NEW YORK, NY 10019 (212) 839 5300 (212) 839 5599 FAX | | | | BEIJING
BOSTON BRUSSELS CENTURY CITY CHICAGO DALLAS GENEVA | | HONG KONG
HOUSTON LONDON LOS ANGELES NEW YORK PALO ALTO SAN FRANCISCO | | SHANGHAI
SINGAPORE SYDNEY TOKYO WASHINGTON, D.C. |
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| | | | | | FOUNDED 1866 | | | | |
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| | | | | | | | | | [ ], 2015 |
BlackRock Liquidity Funds
MuniCash
100 Bellevue Parkway
Wilmington, DE 19809
Funds For Institutions Series
FFI Institutional Tax-Exempt Fund
60 State Street
Boston, MA 02109
Master Institutional Money Market LLC
Master Institutional Tax-Exempt Portfolio
60 State Street
Boston, MA 02109
| | Re: | Liquidation of Master Institutional Tax-Exempt Portfolio, a Class of Master Institutional Money Market LLC, and Reorganization of FFI Institutional Tax-Exempt Fund a Series of Funds For Institutions Series with MuniCash, a Series of BlackRock Liquidity Funds |
Ladies and Gentlemen:
You have requested our opinion on certain Federal income tax consequences of the following events, which will occur simultaneously: (i) the transfer by Master Institutional Tax-Exempt Portfolio (the “Master Target Fund”), a separate class of Master Institutional Money Market LLC (the “Master Target LLC”), a registered investment company and a Delaware limited liability company, of substantially all of its assets to FFI Institutional Tax-Exempt Fund (the “Target Fund”), a series of Funds For Institutions Series, organized as a Massachusetts business trust (the “Target Company”) in exchange for the assumption by the Target Fund of the Master Target Fund Stated Liabilities and all of the interests in the Master Target Fund owned by the Target Fund (the “Liquidation”), (ii) the acquisition by MuniCash (the “Acquiring Fund”), a series of BlackRock Liquidity Funds, an open-end registered investment company, organized as a Delaware statutory trust (the “Acquiring Company”), of substantially all of the assets of the Target Fund and the assumption by the Acquiring Fund of certain liabilities of the Target Fund (the “Assumed Liabilities”) and (iii) the distribution of newly-issued shares of the Acquiring
Sidley Austin (NY) LLP is a Delaware limited liability partnership doing business as Sidley Austin LLP and practicing in affiliation with other Sidley Austin partnerships.
MuniCash, a Series of BlackRock Liquidity Funds
FFI Institutional Tax-Exempt Fund, a Series of BlackRock Fund For Institutions Series
Master Institutional Money Market LLC, a Class of Master Institutional Tax-Exempt Portfolio
[ ], 2015
Page 2
Fund (the “Acquiring Fund Shares”) to the shareholders of the Target Fund ((ii) and (iii) together, the “Funds Reorganization,” and together with the Liquidation, the “Reorganization”). After the Liquidation, the Master Target Fund will terminate. After the Funds Reorganization, the Target Fund will cease to operate, will have no assets remaining, will have final Federal and state (if any) tax returns filed on its behalf and will have all of its shares cancelled under Massachusetts law.
The Target Fund has historically held its investible assets in the Master Target Fund. We have been informed that the Master Target Fund has considered itself as a two-member limited liability company and has classified itself as a partnership for purposes of filing Federal income tax returns. We have also been informed that the member of the Master Target Fund other than the Target Fund was redeemed out of the Master Target Fund for cash (the “Redemption”), on [ ], 2015 and no new members were, or will be, admitted.
This opinion letter is furnished pursuant to Section 9.8 of the Agreement and Plan of Reorganization, dated as of [ ], 2015, by and between the Target Company, Master Target LLC and the Acquiring Company (the “Plan”), as a condition of closing. All terms used herein, unless otherwise defined, are used as defined in the Plan.
In rendering our opinion, we have reviewed and relied upon (a) the Plan, (b) the Combined Prospectus/ Proxy Statement of the Acquiring Company on behalf of the Acquiring Fund and the Target Company on behalf of the Target Fund, dated [ ], 2015, contained in the Registration Statement on Form N-14 (File No. [ ]) of the Acquiring Company on behalf of the Acquiring Fund, as amended and supplemented to date (the “N-14 Registration Statement”), and (c) certain representations concerning the Reorganization made by the Acquiring Company on behalf of the Acquiring Fund and the Target Company on behalf of the Target Fund in letters dated [ ], 2015 (the “Representations”). We have also assumed as correct (i) the Master Target Fund’s treatment of itself as a limited liability company separate from the Target Fund and (ii) the Master Target Fund’s classification of itself as a partnership prior to the Redemption.
Based upon current law, including cases and administrative interpretations thereof and on the reviewed materials listed above, and subject to the conditions and limitations set forth herein, it is our opinion that:
(a) Pursuant to Treasury Regulation section 301.7701-3(b)(1), immediately following the Redemption. the Master Target Fund became, and currently is, disregarded as an entity separate and apart from the Target Fund and the assets and liabilities of the Master Target Fund will be treated as the assets and liabilities of the Target Fund for all federal income tax
MuniCash, a Series of BlackRock Liquidity Funds
FFI Institutional Tax-Exempt Fund, a Series of BlackRock Fund For Institutions Series
Master Institutional Money Market LLC, a Class of Master Institutional Tax-Exempt Portfolio
[ ], 2015
Page 3
purposes and consequently, the distribution of the assets of the Master Target Fund in the Liquidation will not result in the recognition of any income, gain or loss for U.S. federal income tax purposes;
(b) The transfer by the Target Fund of the Assets of the Target Fund to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of the Target Fund Stated Liabilities followed by the distribution of Acquiring Fund Shares to the Target Fund Shareholders in complete dissolution and liquidation of the Target Fund, all pursuant to the Plan, will constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986 (the “Code”), and the Acquiring Fund and the Target Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code;
(c) Under Section 1032 of the Code, no gain or loss will be recognized by the Acquiring Fund upon the receipt of the Assets of the Target Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of the Target Fund Stated Liabilities;
(d) Under Sections 361 and 357(a) of the Code, no gain or loss will be recognized by the Target Fund upon the transfer of the Assets of the Target Fund to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of the Target Fund Stated Liabilities or upon the distribution of Acquiring Fund Shares to Target Fund Shareholders in exchange for such shareholders’ shares of the Target Fund in liquidation of the Target Fund, except for any gain or loss that may be required to be recognized solely or as a result of the close of the Target Fund’s taxable year due to the Reorganization or as a result of the transfer of any stock in a passive foreign investment company as defined in Section 1297(a) of the Code;
(e) Under Section 354 of the Code, no gain or loss will be recognized by the Target Fund Shareholders upon the exchange of their Target Fund shares solely for Acquiring Fund Shares pursuant to the Reorganization;
(f) Under Section 358 of the Code, the aggregate tax basis of Acquiring Fund Shares received by each Target Fund Shareholder pursuant to the Reorganization will be the same as the aggregate tax basis of the Target Fund shares exchanged therefor by such shareholder;
(g) Under Section 1223(1) of the Code, the holding period of Acquiring Fund Shares to be received by each Target Fund Shareholder pursuant to the Reorganization will include
MuniCash, a Series of BlackRock Liquidity Funds
FFI Institutional Tax-Exempt Fund, a Series of BlackRock Fund For Institutions Series
Master Institutional Money Market LLC, a Class of Master Institutional Tax-Exempt Portfolio
[ ], 2015
Page 4
the period during which the Target Fund shares exchanged therefor were held by such shareholder, provided such Target Fund shares are held as capital assets at the time of the Reorganization;
(h) Under Section 362(b) of the Code, the tax basis of the Assets acquired by the Acquiring Fund will be the same as the tax basis of such Assets to the Target Fund immediately before the Reorganization, except for certain adjustments that may be required to be made solely as a result of the close of the Target Fund’s taxable year due to the Reorganization or as a result of gain recognized on the transfer of certain assets of the Target Fund; and
(i) Under Section 1223(2) of the Code, the holding period of the Assets in the hands of the Acquiring Fund will include the period during which those Assets were held by the Target Fund except for any assets which may be marked to market for U.S. federal income tax purposes on the termination of the Target Fund’s taxable year or on which gain was recognized upon the transfer to the Acquiring Fund.
In rendering our opinion, we have considered the applicable provisions of the Code, Treasury Department regulations promulgated thereunder, pertinent judicial authorities, interpretative rulings of the IRS and such other authorities as we have considered relevant. It should be noted that such statutes, regulations, judicial authorities, administrative interpretations and other authorities are subject to change. Any such changes may be retroactive and could have an effect on the conclusions stated herein. We undertake no obligation to update this opinion or advise you of any such changes unless we are specifically engaged to do so.
Our opinion represents our best legal judgment with respect to the proper Federal income tax treatment of the Reorganization, based on the facts contained in the Plan, the N-14 Registration Statement and the Representations. Our opinion assumes the accuracy of the facts as described in the Plan, the N-14 Registration Statement and the Representations and could be affected if any of the facts as so described are inaccurate. Our opinion does not address any gain or loss that may be recognized or any related adjustment to tax basis as a result of the closing of the taxable year of the Target Fund, or any gain or loss that may be recognized or any related adjustment to tax basis on account of the transfer of particular assets of the Target Fund that are subject to special gain recognition rules under the Code.
We are furnishing this opinion letter to the Acquiring Company, the Target Company and the Master Target LLC, and the Board of Trustees of the Acquiring Company and the Target Company and the Board of Directors of the Master Target LLC, solely for their benefit in
MuniCash, a Series of BlackRock Liquidity Funds
FFI Institutional Tax-Exempt Fund, a Series of BlackRock Fund For Institutions Series
Master Institutional Money Market LLC, a Class of Master Institutional Tax-Exempt Portfolio
[ ], 2015
Page 5
connection with the Reorganization. This opinion letter is not to be used, circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
