EXHIBIT (8)-1
Haskell Slaughter Young & Johnston,
Professional Association
1200 AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203
December 12, 1995
HEALTHSOUTH Corporation
Two Perimeter Park South
Birmingham, Alabama 35243
Re: Plan and Agreement of Merger by and among HEALTHSOUTH
Corporation, SCA Acquisition Corporation and Surgical Care
Affiliates, Inc.
Gentlemen:
We have acted as counsel to HEALTHSOUTH Corporation, a Delaware
corporation ("HEALTHSOUTH"), in connection with the proposed merger (the
"Merger") of SCA Acquisition Corporation, a Delaware corporation ("Subsidiary"),
with and into Surgical Care Affiliates, Inc., a Delaware corporation ("SCA"),
pursuant to the terms of that certain Amended and Restated Plan and Agreement of
Merger, dated as of October 9, 1995 (the "Merger Agreement"), by and among
HEALTHSOUTH, Subsidiary and SCA, as described in more detail in the Merger
Agreement and in the Registration Statement on Form S-4 filed by HEALTHSOUTH
with the Securities and Exchange Commission on December 12, 1995, (the
"Registration Statement"). This opinion is being rendered pursuant to your
request. All capitalized terms, unless otherwise specified, have the meaning
assigned to them in the Registration Statement.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Merger Agreement, (ii) the Registration Statement, and (iii) such other
documents as we have deemed necessary or appropriate in order to enable us to
render the opinion below. In our examination, we have assumed the genuineness of
all signatures, the legal capacity of all natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified, conformed or photostatic copies
and the authenticity of the originals of such copies. In rendering the opinion
set forth below, we have relied upon certain written representations and
covenants of HEALTHSOUTH, Subsidiary and SCA, which are annexed hereto.
In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations, pertinent judicial authorities, interpretive rulings of the
Internal Revenue Service and such other authorities as we have considered
relevant.
Based upon and subject to the foregoing, we are of the opinion that:
(i) The Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code, and HEALTHSOUTH, Subsidiary and
SCA will each be a party to the reorganization within the
meaning of Section 368(b) of the Code;
(ii) No gain or loss will be recognized by HEALTHSOUTH, Subsidiary or
SCA as a result of the Merger;
(iii) No gain or loss will be recognized by a SCA stockholder who
receives solely shares of HEALTHSOUTH Common Stock in exchange
for SCA Common Stock;
(iv) Thereceipt of cash in lieu of fractional shares of HEALTHSOUTH
Common Stock will be treated as if the fractional shares were
distributed as part of the exchange and then were redeemed by
HEALTHSOUTH. These payments will be treated as having been
received as distributions in full payment in exchange for the
stock redeemed as provided in Section 302(a) of the Code;
(v) The tax basis of the shares of HEALTHSOUTH Common Stock received
by an SCA stockholder will be equal to the tax bases of the SCA
Common Stock exchanged therefor, excluding any basis allocable
to a fractional share of HEALTHSOUTH Common Stock for which cash
is received; and
(vi) The holding period of the shares of HEALTHSOUTH Common Stock
received by an SCA stockholder will include the holding period
or periods of the SCA Common Stock exchanged therefor, provided
that the SCA Common Stock is held as a capital asset within the
meaning of Section 1221 of the Code at the effective time of the
Merger.
The Merger should have no immediate federal income tax consequences to
HEALTHSOUTH stockholders.
Except as set forth above, we express no opinion as to the tax
consequences, whether federal, state, local or foreign, to any party to the
Merger or of any transactions related to the Merger or contemplated by the
Merger Agreement.
We hereby consent to the reference to our Firm under the heading "Legal
Matters" in the Prospectus-Joint Proxy Statement which forms a part of the
Registration Statement, and to the filing of this opinion as an Exhibit thereto.
Very truly yours,
HASKELL SLAUGHTER YOUNG & JOHNSTON
Professional Association
By /s/ Ross N. Cohen
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Ross N. Cohen