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EXHIBIT 8.1
November 2, 1998
The Board of Directors
Westbank Corporation
225 Park Avenue
West Springfield, MA 01089-3326
Gentlemen:
Set forth below is our opinion regarding certain federal income tax
consequences under the Internal Revenue Code of 1986, as amended (the "Code")
which will result from the transaction described below.
In rendering this opinion, we have reviewed and relied upon statements
made to us by certain of your officers. We have also examined original or
certified copies of such certificates of public officials that have been made
available to us and such other matters as we have deemed relevant for purposes
of this opinion. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as certified copies or
photocopies and the authenticity of the originals of such documents.
We also have relied upon the accuracy of the formal matters set forth
in the Proxy Statement-Prospectus contained in the Registration Statement Number
333-64741 on Form S-4 (the "Registration Statement") filed on September 30, 1998
and Amendment Number One filed thereto on or about November 2, 1998 by Westbank
Corporation, by Westbank Corporation ("Westbank") with the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the
"1933 Act")
Our opinion, in part, is based upon the assumption that the proposed
transaction described herein will occur in accordance with the agreements and
the facts and representations recited or referred to in this opinion letter and
also that the facts set forth herein are accurate as of the date hereof and will
be accurate at the Effective Time. We have undertaken no independent
investigation of the accuracy of the facts and representations recited herein or
therein.
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The Board of Directors
Westbank Corporation
November 2, 1998
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The Proposed Transaction
Based solely upon our review of the documents described herein, and in
reliance upon such documents, subject to the terms of the Affiliation and Merger
Agreement, dated as of July 15, 1998 (the "Merger Agreement"), by and among
Westbank, Park West Bank and Trust Company ("Park West"), a wholly owned bank
subsidiary of Westbank, Cargill Bancorp, Inc. ("Cargill") and Cargill Bank
("Cargill Bank"), a wholly owned subsidiary of Cargill. Pursuant to the terms of
the Merger Agreement, Cargill will merge with and into Westbank, as a result of
which Cargill Bank will become a wholly owned direct subsidiary of Westbank. As
a result of the foregoing transactions, Westbank will be the bank holding
company for Park West and Cargill Bank, and each of Park West and Cargill Bank
will be wholly owned direct subsidiaries of Westbank.
At the Effective Time of the Merger, each outstanding share of Cargill
Common Stock will be converted into and become exchangeable for shares of
Westbank Common Stock plus cash in lieu of any fractional share of Westbank
Common Stock (the "Exchange Ratio"), as follows:
1. If the Westbank Market Value is greater than or equal to $13.07,
then 1.3008 fully paid and nonassessable shares of Westbank Common Stock will be
exchanged for one (1) share of Cargill Common Stock;
2. If the Westbank Market Value is less than $13.07 but greater than or
equal to $12.00, then the number of fully paid and nonassessable shares of
Westbank Common Stock (rounded to the nearest one ten-thousandth of a share) is
obtained by dividing (A) $17.00 per share by (B) the Westbank Market Value and
exchanging the resulting number with one (1) share of Cargill Common Stock; or
3. If the Westbank Market Value is less than $12.00, then 1.4167 fully
paid and nonassessable shares of Westbank Common Stock will be exchanged for one
(1) share of Cargill Common Stock. However, if Westbank's Market Value is less
than $12.00, the Board of Directors of Cargill may elect to, but is not required
to, terminate the Merger Agreement unless Westbank increases the exchange ratio
to (A) $17.00 per share divided by (B) the Westbank Market Value.
The Westbank Market Value is defined in the Merger Agreement as the
average of the closing prices of Westbank Common Stock on the NASDAQ National
Market System for each of the twenty (20) consecutive trading days ending on the
fifth trading day before the last required approval of a governmental entity is
obtained with respect to the transactions contemplated in the Merger Agreement,
without regard to any requisite waiting period in respect thereof, except if the
closing does not occur on or before the sixteenth day following the last
regulatory approval solely because of the non-expiration of waiting periods,
then it shall mean the date five (5) business days before the closing. Cash will
be given in lieu of fractional shares.
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The Board of Directors
Westbank Corporation
November 2, 1998
Page 3
The following representations have been made in connection with the
proposed transaction:
(a) The ratio for the exchange of shares of Cargill common stock
for common stock of Westbank was negotiated through arm's
length bargaining. Accordingly, the fair market value of the
Westbank Common Stock and other consideration received by each
Cargill shareholder in the Merger will be approximately equal
to the fair market value of the Cargill Common Stock
surrendered by such stockholder in exchange therefor.
(b) The management of Cargill and Westbank know of no plan or
intention by any shareholder of Cargill, to sell, exchange, or
otherwise dispose of any of the shares of Westbank Common
Stock to be received in the transaction. In addition, the
management Cargill and Westbank know of no transfers of
Cargill stock by any holders thereof prior to the Effective
Time which were made in contemplation of the Merger.
(c) Westbank has no plan or intention to redeem or otherwise
reacquire any of its own stock to be issued in the
transaction.
(d) Westbank will pay its own expenses incurred in connection with
the proposed transaction. Cargill will pay its own expenses
incurred in connection with the proposed transaction. Cargill
will not pay any of the expenses of the stockholders of
Cargill incurred in connection with the Merger.
(e) The liabilities of Cargill assumed by Westbank and the
liabilities to which the transferred assets of Cargill are
subject were incurred by Cargill in the ordinary course of its
business.
(f) Following the transaction, Westbank will continue the historic
business of Cargill Bank or use of a significant portion of
Cargill Bank's historic business assets in a business.
(g) Neither Cargill nor Westbank are under the jurisdiction of a
court in a Title 11 or similar action with the meaning of
section 368(a)(3)(A) of the Code.
(h) On the date of the Merger, the fair market value of the assets
of Cargill will exceed the sum of its liabilities (including
any liabilities to which its assets are subject).
(i) Neither Westbank nor Cargill is an investment company, as
defined in section 368(a)(2)(F)(iii) and (iv) of the Internal
Revenue Code.
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The Board of Directors
Westbank Corporation
November 2, 1998
Page 4
Opinions
Based on the foregoing description of the Merger and the terms of the
Registration Statement and subject to the assumptions, qualifications and
limitations set forth in this letter, we are of the opinion that if the Merger
is consummated as described above, then:
(i) The Merger will qualify as a
"reorganization" under Section 368(a) of the
Code and Westbank and Cargill 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
Westbank, Park West Bank, Cargill or Cargill
Bank by reason of the Merger.
(iii) No gain or loss will be recognized by any
Cargill shareholder except those who elect
to exercise dissenters' rights (except in
connection with the receipt of cash in lieu
of a fractional share of Westbank Common
Stock) upon the exchange of Cargill Common
Stock for Westbank Common Stock in the
Merger.
(iv) The aggregate tax basis of the Westbank
Common Stock received by a Cargill
shareholder who exchanges Cargill Common
Stock for Westbank Common Stock will be the
same as the aggregate tax basis of the
Cargill Common Stock surrendered in exchange
therefor (subject to any adjustments
required as the result of receipt of cash in
lieu of a fractional share of Westbank
Common Stock).
(v) The holding period for the shares of
Westbank Common Stock received by a Cargill
shareholder receiving Westbank Common Stock
will include the holding period for the
shares of Cargill Common Stock surrendered
in exchange therefore (provided that such
Common Stock of such Cargill shareholder was
held as a capital asset at the Effective
Time).
(vi) Cash received by a Cargill shareholder in
lieu of a fractional share interest of
Westbank Common Stock will be treated as
having been received as a distribution in
full payment in exchange for the fractional
share interest of Westbank Common Stock
which he would otherwise be entitled to
receive and will qualify as capital gain or
loss (assuming the Cargill Common Stock was
a capital asset in his hands at the
Effective Time).
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The Board of Directors
Westbank Corporation
November 2, 1998
Page 5
Our opinion set forth herein is based upon the description of the
Merger as set forth in the Affiliation and Merger Agreement and in the
Registration Statement. If the actual facts relating to any aspect of the Merger
differ from such description in any material respect, the opinions expressed
herein may become inapplicable. Further, our opinions are based upon applicable
provisions of the Code, applicable Treasury Regulations, current published
administrative decisions of the IRS and existing judicial decisions as of the
date hereof. No assurance can be given that legislative, administrative or
judicial decisions or interpretations may not be forthcoming that will
significantly change the opinions set forth herein as our opinions. Further, our
opinion is not binding on the IRS, and the tax effects discussed above are not
subject to absolute resolution prior to the running of the statute of
limitations or the rendering of a final determination by a court of law or by
closing agreement with the IRS. We express no opinions other than those stated
herein as our opinions. In addition, this opinion does not address any aspects
of state, local, foreign or other tax laws that may be relevant to Cargill
shareholders. The foregoing opinion summarizes the material U.S. Federal Income
Tax consequences of the Merger, including certain consequences to shareholders
of Cargill who are citizens or residents of the United States and who hold their
shares as capital assets. It does not discuss all aspects of federal income
taxation that may be relevant to a particular Cargill shareholder in light of
his or her personal circumstances or to Cargill shareholders subject to special
federal income tax treatment (such as insurance companies, dealers in
securities, certain retirement funds, financial institutions, tax exempt
organizations or foreign persons).
This opinion may be relied upon by Cargill, Cargill Bank and the
shareholders of Cargill, except dissenting shareholders of Cargill, as if such
opinion were issued directly to them. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement and to the reference to our
firm made therein under the caption "Legal Matters."
Sincerely,
/s/ Cranmore, FitzGerald & Meaney
CRANMORE, FITZGERALD & MEANEY