Exhibit 8.1
August 8, 1995
The Andersons and
The Andersons Management Corp.
480 West Dussel Drive
Maumee, Ohio 43537
Re: Merger Agreement
Ladies and Gentlemen:
We have acted as counsel to The Andersons, an Ohio limited
partnership (the "Partnership"), and The Andersons Management Corp., an Ohio
corporation and the sole general partner of the Partnership (the "General
Partner"), in connection with the Agreement and Plan of Merger dated as of
April 28, 1995 (as amended and restated on August 9, 1995, the "Agreement").
The Agreement provides, among other things, for the merger of the Partnership
with and into the General Partner (the "Merger"). Thereafter, the General
Partner will be the sole surviving entity (the "Surviving Corporation") and
will change its name to The Andersons, Inc.
You have requested our opinion as to certain United States federal
income tax consequences of the Merger. In preparing our opinion, we have
reviewed and relied upon the Agreement, the Form S-4 Registration Statement
and accompanying Joint Proxy Statement/Prospectus (both dated May 1, 1995) as
amended (including, without limitation, Amendment No. 2, dated August 9,
1995) (collectively, the "Registration Statement"), and such other documents
as we deemed necessary. In preparing this opinion we have also assumed that
(1) the Merger will be effected in accordance with the terms of the Agreement,
(2) the representations provided by the General Partner are true and accurate
in all material respects (which representations are attached hereto as Exhibit
A), (3) there is no binding commitment (a "Commitment") on the part of any
Limited Partner (as defined in the Registration Statement) to engage in a
sale, exchange, or other disposition of Common Shares to be received in the
Merger, and (4) there will be no change in any of the facts material to this
opinion between the date of this opinion and the date of the Merger.
Capitalized terms used but not defined herein have the meanings specified in
the Agreement.
On the basis of the foregoing, it is our opinion that:
1. The Merger will be treated for United States federal income tax
purposes as:
a. A transfer by the Partnership, under Section 351(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), of all
its assets and liabilities to the General Partner in exchange
for Common Shares representing a controlling interest (within
the meaning of Code Section 368(c)) in the Surviving
Corporation;
b. An immediate distribution by the Partnership to the Limited
Partners of Common Shares in complete liquidation of their
interests in the Partnership under Code Sections 731 and 736;
and
c. An exchange by the shareholders of the General Partner (the
"Shareholders") of Class A and Class B Common Shares of the
General Partner for Common Shares of the Surviving Corporation
under Code Sections 1036 and 368(a)(1)(E).
Accordingly, no gain or loss will be recognized by the Partnership
or the General Partner (i.e., the Surviving Corporation) and no gain
or loss will be recognized by the Limited Partners and Shareholders
who receive only Common Shares in the Merger.
2. Any cash received by a Limited Partner or Shareholder in lieu of the
issuance of fractional Common Shares will be treated as the receipt
of cash in redemption of such fractional Common Shares. Unless such
redemption is essentially equivalent to a dividend (as determined
under the rules of Code Section 302), a Limited Partner or
Shareholder receiving cash in lieu of fractional Common Shares will
recognize gain or loss measured by the difference between such
Limited Partner's or Shareholder's basis in the fractional share
surrendered and the cash received. Any cash received by a Limited
Partner for his, her, or its interest in the Partnership due to such
Limited Partner's proper exercise of appraisal or similar rights
pursuant to Ohio law will be treated as a distribution prior to the
Merger by the Partnership in liquidation of the interest of such
Limited Partner in the Partnership and will result in recognition of
gain or loss by such Limited Partner measured by the difference
between the amount of cash received and such Limited Partner's
aggregate basis in his, her, or its interest in the Partnership.
Any cash received by a Shareholder (an "Appraising Shareholder") for
Class A or Class B Common Shares due to such Shareholder's proper
exercise of appraisal rights pursuant to Ohio law will be treated as
the receipt of cash in redemption of such Class A or Class B Common
Shares. Unless such redemption is essentially equivalent to a
dividend (as determined under the rules of Code Section 302), an
Appraising Shareholder will recognize gain or loss measured by the
difference between such Appraising Shareholder's basis in the Class
A or Class B Common Shares surrendered and the amount of cash
received.
3. The Surviving Corporation's basis in the assets received from the
Partnership in the Merger will be the same as the Partnership's
basis in those assets prior to the Merger. Common Shares received
by a Shareholder in exchange for Class A or Class B Common Shares of
the General Partner (including any fractional Common Shares deemed
to be received and then redeemed) will have an aggregate basis equal
to the basis of the Class A and Class B Common Shares that are
exchanged. The aggregate basis of any Common Shares received in the
Merger by a Limited Partner in exchange for limited partnership
interests (including any fractional Common Shares deemed to be
received and then redeemed) will equal the aggregate basis in such
Limited Partner's interest in the Partnership immediately before the
Merger.
4. The Surviving Corporation will have a holding period in the assets
acquired in the Merger that includes the Partnership's holding
period in those assets. A Common Share received in the Merger by a
Shareholder of the General Partner in exchange for any Class A or
Class B Common Shares of the General Partner will have a holding
period that includes that Shareholder's holding period in such Class
A or Class B Common Shares, provided such Class A or Class B Common
Shares constitute capital assets in such Shareholder's hands prior
to the Merger. A Common Share received in the Merger in exchange
for a limited partnership interest in the Partnership will have a
holding period that:
a. Begins on the day following the Merger, to the extent that the
value of such Common Share is attributable to Partnership
assets transferred in the Merger that are not capital assets or
assets described in Code Section 1231; and
b. Includes the holding period of the Limited Partner in his, her
or its limited partnership interest, to the extent of the
balance.
The opinions set forth above are based upon the applicable
provisions of the Code; the Treasury Regulations promulgated or proposed
thereunder; current positions of the Internal Revenue Service (the "IRS")
contained in published revenue rulings, revenue procedures, and announcements;
existing judicial decisions; and other applicable authorities. No rulings
have been sought from the IRS with respect to any of the matters discussed
herein. Opinions of counsel are not binding on the IRS. Hence, no assurance
can be given that the opinions stated in this letter will not be successfully
challenged by the IRS or disagreed with by a court. We express no opinion
concerning any United States federal income tax consequences of the Merger
except as expressly set forth above. We consent to the filing of this letter
as an exhibit to the Registration Statement and to the references to our firm
in the Joint Proxy Statement/Prospectus.
Very truly yours,
/s/ Kirkland & Ellis
KIRKLAND & ELLIS