September , 2000
The Latin America Equity Fund, Inc.
466 Lexington Avenue, 16th Floor New
York, New York 10017
The Latin America Investment Fund, Inc.
466 Lexington Avenue, 16th Floor
New York, New York 10017
Ladies and Gentlemen:
You have asked us for our opinion concerning certain federal income tax
consequences to (a) The Latin America Equity Fund, Inc., a Maryland
Corporation (the "Target Fund" or "Latin America Equity Fund"), (b) The
Latin America Investment Fund, Inc., a Maryland corporation (the "Acquiring
Fund" or "Latin America Investment Fund"), and (c) holders of shares in
the Target Fund ("Target Fund Shareholders"), when the Target Fund merges
with and into the Acquiring Fund (the "Merger") and shares of the Target
Fund are converted into shares of common stock of the Acquiring Fund (the
"Latin America Investment Fund Common Stock") pursuant to the Merger, all
pursuant to that certain Merger Agreement and Plan of Reorganization (the
"Plan"), effective September 30, 2000 (the "Effective Date"), between
and among the Target Fund and the Acquiring Fund.
We have reviewed such documents and materials as we have considered necessary
for the purpose of rendering this opinion. In rendering this opinion, we have
assumed that such documents as yet unexecuted will, when executed, conform in
all material respects to the proposed forms of such documents that we have
examined. In addition, we have assumed the genuineness of all signatures, the
capacity of each party executing a document to so execute that document, the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as certified or
photostatic copies.
We have made inquiry as to the underlying facts which we considered to be
relevant to the conclusions set forth in this letter. The opinions expressed
in this letter are based upon certain factual statements relating to the
Target Fund and the Acquiring Fund set forth in the Registration Statement on
Form N-14 (the "Acquiring Fund Registration Statement") filed by the
Acquiring Fund with the Securities and Exchange Commission and
representations made in letters from the Target Fund and the Acquiring Fund
addressed to us for our use in rendering this opinion. We have no reason to
believe that these representations and facts are
not valid, but we have not attempted to verify independently any of these
representations and facts, and this opinion is based upon the assumption that
each of them is accurate. Capitalized terms used herein and not otherwise
defined shall have the meaning given them in the Registration Statement.
The conclusions expressed herein are based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations issued thereunder,
published rulings and procedures of the Internal Revenue Service and judicial
decisions, all as in effect on the date of this letter.
Based upon the foregoing, we are of the opinion that for federal income tax
purposes:
(a) the Merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Code and the Latin America Investment Fund and
the Latin America Equity Fund will each be deemed a "party to a
reorganization" within the meaning of Section 368(b) of the Code;
(b) no gain or loss will be recognized to the Latin America Equity Fund as a
result of the Merger or on the conversion of Latin America Equity shares to
Latin America Investment Fund Common Stock [cad 157]except to the extent such
shareholders are paid cash in lieu of fractional shares of Latin America
Investment Fund in the Merger[cad 179];
(c) no gain or loss will be recognized to the Latin America Equity Fund as a
result of the Merger;
(d) no gain or loss will be recognized to the Target Fund Shareholders on
the conversion of their shares into Latin America Investment Fund Common
Stock;
(e) the tax basis of the Latin America Equity Fund assets in the hands of
the Latin America Investment Fund will be the same as the tax basis of such
assets in the hands of the Latin America Equity Fund prior to the
consummation of the Merger;
(f) immediately after the Merger, the tax basis of the Latin America
Investment Fund Common Stock received by the Target Fund Shareholders in the
Merger will be equal, in the aggregate, to the tax basis of the shares of the
Latin America Equity Fund converted pursuant to the Merger;
(g) a Target Fund Shareholder's holding period for the Latin America
Investment Fund Common Stock will be determined by including the period for
which he or she held the shares of the Latin America Equity Fund converted
pursuant to the Merger, provided, that such Latin America Equity Fund shares
were held as a capital asset;
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(h) the Latin America Investment Fund's holding period with respect to the
Latin America Equity Fund assets transferred will include the period for
which such assets were held by the Latin America Equity Fund; [cad 157]and
(i) the payment of cash to the Latin America Equity Fund shareholders in
lieu of fractional shares of the Latin America Investment Fund will be
treated as though the fractional shares were distributed as part of the
Merger and then redeemed by the Latin America Investment Fund with the result
that the Latin America Equity Fund shareholder will generally have capital
gains or losses to the extent the cash distribution differs from such
shareholder's basis allocable to the fractional shares.[cad 179]
Very truly yours,
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