Exhibit 12
SIDLEY AUSTIN LLP BEIJING GENEVA SAN FRANCISCO
787 SEVENTH AVENUE BRUSSELS HONG KONG SHANGHAI
SIDLEY AUSTIN LLP NEW YORK, NY 10019 CHICAGO LONDON SINGAPORE
- ----------------- (212) 839 5300 DALLAS LOS ANGELES TOKYO
SIDLEY (212) 839 5599 FAX FRANKFURT NEW YORK WASHINGTON, DC
FOUNDED 1866
October 16, 2006
BlackRock Large Cap Series Funds, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536
BlackRock Large Cap Growth Equity Portfolio
100 Bellevue Parkway
Wilmington, Delaware 19809
Re: Reorganization of BlackRock Large Cap Growth Fund and
BlackRock Large Cap Growth Equity Portfolio
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Ladies and Gentlemen:
You have requested our opinion as to certain Federal income tax
consequences of (i) the acquisition by BlackRock Large Cap Growth Fund
(formerly Merrill Lynch Large Cap Growth Fund) ("Acquiring Fund"), an
open-end, registered management investment company organized as a separate
series of BlackRock Large Cap Series Funds, Inc. (formerly Merrill Lynch Large
Cap Series Funds, Inc.) ("Large Cap Series"), a Maryland corporation, of
substantially all of the assets of BlackRock Large Cap Growth Equity Portfolio
("Target Fund"), an open-end, registered management investment company
organized as a separate series of the BlackRock Funds ("BlackRock Funds"), a
Massachusetts business trust, and the assumption by Acquiring Fund of the
Stated Liabilities of Target Fund, (ii) the simultaneous distribution of newly
issued Investor A, Investor B, Investor C, Institutional and Service shares of
Acquiring Fund, each with a par value of $0.10 per share (collectively, the
"Acquiring Fund Shares") to stockholders of Target Fund (the steps in (i) and
(ii) collectively, the "Reorganization"), and (iii) the contribution by
Acquiring Fund of the assets received from Target Fund to Master Large Cap
Growth Portfolio (the "Portfolio"), a portfolio maintained by the Master Large
Cap Series Trust, a Delaware statutory trust (the "Large Cap Trust"). After
the Reorganization, 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.
This opinion letter is furnished pursuant to Section 8.6 of the
Agreement and Plan of Reorganization, dated as of June 19, 2006, by and
between Large Cap Series, BlackRock Funds, and Large Cap Trust (the "Plan").
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 Registration Statement on Form N-14 (File No. 333-133900) of Merrill
Lynch Large Cap Series Funds, Inc., as amended to date (the "N-14 Registration
Statement"), and (c) certain representations concerning the Reorganization
made by Acquiring Fund, Target Fund and Large Cap Trust in letters dated
October 16, 2006 (the "Representations").
SIDLEY AUSTIN LLP
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SIDLEY
Based upon current law, including cases and administrative
interpretations thereof and on the reviewed materials listed above, it is our
opinion that:
1. The acquisition by Acquiring Fund of substantially all of the assets
of Target Fund and the assumption by Acquiring Fund of the Stated Liabilities,
as described in the Plan, will constitute a reorganization within the meaning
of section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), and Acquiring Fund and Target Fund will each be a "party to a
reorganization" within the meaning of section 368(b) of the Code.
2. In accordance with section 361(a) of the Code, Target Fund will not
recognize any gain or loss either on the transfer of substantially all of its
assets to Acquiring Fund in exchange solely for shares of its common stock and
the assumption by Acquiring Fund of the Stated Liabilities or on the
simultaneous distribution of such common stock to Target Fund stockholders.
3. Under section 1032 of the Code, Acquiring Fund will not recognize any
gain or loss as a result of the acquisition by Acquiring Fund of substantially
all of the assets of Target Fund in the Reorganization.
4. In accordance with section 354(a)(1) of the Code, stockholders of
Target Fund will recognize no gain or loss on the exchange of their shares of
Target Fund common stock solely for corresponding shares of Acquiring Fund
common stock.
5. Under section 362(b) of the Code, the basis of the assets of Target
Fund received by Acquiring Fund will be the same as the basis of such assets
to Target Fund immediately before the Reorganization.
6. Under section 358 of the Code, the aggregate basis of the shares of
Acquiring Fund common stock, including fractional shares, received by each
stockholder of Target Fund will be the same as the aggregate basis of the
shares of common stock of Target Fund exchanged pursuant to the
Reorganization.
7. Under section 1223 of the Code, the holding period of the shares of
Acquiring Fund common stock, including fractional shares, received in the
Reorganization will include the holding period of the shares of Target Fund
common stock exchanged pursuant to the Reorganization, provided that such
shares of common stock were held as a capital asset on the date of the
Reorganization.
8. Under section 1223 of the Code, the holding period of the assets
acquired by Acquiring Fund from Target Fund will include the period during
which such assets were held by Target Fund.
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SIDLEY AUSTIN LLP
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SIDLEY
9. No gain or loss will be recognized by Acquiring Fund or by the
Portfolio upon the contribution by Acquiring Fund of assets received in the
Reorganization from Target Fund to the Portfolio.
10. The contribution by Acquiring Fund of assets received in the
Reorganization from Target Fund to the Portfolio will not affect Acquiring
Fund's basis in or holding period for those assets.
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.
We are furnishing this opinion letter to the addressees hereof,
solely for the benefit of such addressees in 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,
/s/ Sidley Austin LLP
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