Exhibit 8.1
[Letterhead of Luse Gorman Pomerenk & Schick]
September 17, 2002
Board of Directors
Clay County Savings and Loan Association
1178 West 152 Highway
Liberty, Missouri 64068
Re: Federal Income Tax Opinion Relating to the Conversion of
Clay County Savings and Loan Association from a
Federally-Chartered Mutual Savings and Loan Association
to a Federally-Chartered Stock Savings Bank
Gentlemen:
In accordance with your request, set forth below is the opinion of this
firm relating to the Federal income tax consequences of the proposed conversion
(the "Conversion") of Clay County Savings and Loan Association ("Bank") from a
federally-chartered mutual savings and loan association to a federally-chartered
stock savings bank. As part of the Conversion, Bank will change its name to Clay
County Savings Bank. In the Conversion, all of Bank's to-be-issued capital stock
will be acquired by CCSB Financial Corp., a newly organized Delaware corporation
(the "Holding Company"). Hereafter, the term "Stock Bank" shall refer to Bank in
its post-conversion stock form.
For purposes of this opinion, we have examined such documents and
questions of law as we have considered necessary or appropriate, including but
not limited to the Holding Company's Registration Statement on Form SB-2
relating to the proposed issuance of up to 851,000 shares, subject to adjustment
to up to 978,650 shares of common stock par value $.01 per share and the Plan of
Conversion adopted by Bank on July 30, 2002 (the "Plan"), the Federal Mutual
Charter and Bylaws of Bank, the Federal Stock Charter and Bylaws of Bank, and
the Delaware Certificate of Incorporation and Bylaws of the Holding Company. In
such examination, we have assumed and have not independently verified the
authenticity of all original documents, the accuracy of all copies, and the
genuineness of all signatures. We have further assumed the absence of adverse
facts not apparent from the face of the instruments and documents we examined.
Capitalized terms used herein but not defined herein shall have the same meaning
as set forth in said documents.
In issuing our opinion, we have assumed that the Plan has been duly and
validly authorized and has been approved and adopted by the board of directors
of Bank at a meeting duly called and held; that Bank will comply with the terms
and conditions of the Plan, and that the various representations and warranties
which are provided to us are accurate, complete, true and correct.
Clay County Savings and Loan Association
September 17, 2002
Page 2
Accordingly, we express no opinion concerning the effect, if any, of variations
from the foregoing. We specifically express no opinion concerning tax matters
relating to the Plan under state and local tax laws and under Federal income tax
laws except on the basis of the documents and assumptions described above.
In issuing the opinion set forth below, we have relied solely on
existing provisions of the Internal Revenue Code of 1986, as amended (the
"Code"); existing and proposed Treasury Regulations (the "Regulations")
thereunder; current administrative rulings, notices and procedures; and court
decisions. Such laws, regulations, administrative rulings, notices and
procedures and court decisions are subject to change at any time. Any such
change could affect the continuing validity of the opinions set forth below.
This opinion is as of the date hereof, and we disclaim any obligation to advise
you of any change in any matter considered herein after the date hereof.
In rendering our opinion, we have assumed that the persons and entities
identified in the Plan of Conversion will at all times comply with applicable
state and Federal laws and the representations of Bank. In addition, we have
assumed that the activities of the persons and entities identified in the Plan
will be conducted strictly in accordance with the Plan. Any variations may
affect the opinions we are rendering. For purposes of this opinion, we are
relying on the representations provided to us by Bank, which are incorporated
herein by reference.
BACKGROUND
Bank is a federally-chartered mutual savings and loan association which
is in the process of converting to a federally-chartered stock savings bank. As
a federally-chartered mutual savings and loan association, Bank has no
authorized capital stock. Instead Bank, in mutual form, has a unique equity
structure. A depositor in Bank is entitled to payment of interest on his account
balance as declared and paid by Bank. A depositor has no right to a distribution
of any earnings of Bank except for interest paid on his deposit but rather such
earnings become retained earnings of Bank. However, a depositor has a right to
share, pro rata, with respect to the withdrawal value of his account, in any
liquidation proceeds distributed in the event Bank is liquidated. All of the
interests held by a depositor cease when such depositor closes his account with
Bank.
PROPOSED TRANSACTION
The Holding Company has been formed under the laws of the State of
Delaware for the purpose of the proposed transactions described herein, to
engage in business as a savings bank holding company and to hold all of the
stock of Stock Bank. The Holding Company will issue shares of its voting common
stock ("Holding Company Conversion Stock"), upon completion of the
mutual-to-stock conversion of Bank, to persons purchasing such shares as
described in greater detail below.
Clay County Savings and Loan Association
September 17, 2002
Page 3
Following regulatory approval, the Plan provides for the offer and sale
of shares of Holding Company Conversion Stock in a Subscription Offering
pursuant to nontransferable subscription rights on the basis of the following
preference categories: (i) Eligible Account Holders of Bank, (ii) Bank's
tax-qualified employee plans such as the newly formed employee stock ownership
plan, (iii) Supplemental Eligible Account Holders, and (iv) Other Members, as
described in the Plan. All shares must be sold, and to the extent the stock is
available, no subscriber will be allowed to purchase fewer than 25 shares of
Holding Company Conversion Stock. If shares remain after all orders are filled
in the four preference categories described above, the Plan calls for a
Community Offering for the sale of shares not purchased under the preference
categories, and a Syndicated Community Offering for the shares not sold in the
Community Offering.
Pursuant to the Plan, all such shares will be issued and sold at a
uniform price per share. The aggregate purchase price at which all shares of
Holding Company Conversion Stock will be offered and sold pursuant to the Plan
will be equal to the estimated pro forma market value of Bank, as converted. The
estimated pro forma market value will be determined by Keller & Company, an
independent appraiser. The conversion of Bank from mutual-to-stock form and the
sale of newly issued shares of the stock of Stock Bank to the Holding Company
will be deemed effective concurrently with the closing of the sale of Holding
Company Conversion Stock.
OPINION OF COUNSEL
This opinion is given as of the date hereof. In issuing our opinion, we
have referred solely to existing provisions of the Code, existing and proposed
Treasury Regulations promulgated thereunder, current administrative rulings,
notices and procedures and court decisions. Such laws, regulations,
administrative rulings, notices and procedures and court decisions are subject
to change at any time. Any such change could affect the continuing validity of
such opinions.
We emphasize that the outcome of litigation cannot be predicted with
certainty and, although we have attempted in good faith to opine as to the
probable outcome of the merits of each tax issue with respect to which an
opinion was requested, there can be no assurance that our conclusions are
correct or that they would be adopted by the Internal Revenue Service or a
court.
Based solely upon the foregoing information, we render the following
opinion:
1. Pursuant to the Conversion, the changes at the corporate level
other than changes in the form of organization will be
insubstantial. Based upon that fact and the fact that the equity
interest of a depositor/member of a mutual savings association is
more nominal than real, unlike that of a shareholder of a
corporation, the conversion of the Bank from a mutual entity to a
stock savings bank is a tax-free reorganization since it is a mere
change in identity, form or place of organization within the
meaning of Section 368(a)(1)(F) of the Code (see Rev. Rul. 80-105,
1980-1 C.B. 78). Neither the Bank nor the Stock Bank shall
recognize gain or loss as a result of the
Clay County Savings and Loan Association
September 17, 2002
Page 4
Conversion. The Bank and the Stock Bank shall each be "a party to
a reorganization" within the meaning of Section 368(b) of the
Code.
2. No gain or loss shall be recognized by the Stock Bank or the
Holding Company on the receipt by the Stock Bank of money from the
Holding Company in exchange for shares of the Stock Bank's capital
stock or by the Holding Company upon the receipt of money from the
sale of its Common Stock (Section 1032(a) of the Code).
3. The basis of the assets of the Bank in the hands of the Stock Bank
shall be the same as the basis of such assets in the hands of the
Bank immediately prior to the Conversion (Section 362(b) of the
Code).
4. The holding period of the assets of the Bank in the hands of the
Stock Bank shall include the period during which the Bank held the
assets (Section 1223(2) of the Code).
5. No gain or loss shall be recognized by the Eligible Account
Holders and the Supplemental Eligible Account Holders of the Bank
on the issuance to them of withdrawable deposit accounts in the
Stock Bank plus interests in the liquidation account of the Stock
Bank in exchange for their deposit accounts in the Bank or to the
other depositors on the issuance to them of withdrawable deposit
accounts (Section 354(a) of the Code).
6. It is more likely than not that the fair market value of the
nontransferable subscription rights to purchase Common Stock is
zero. Accordingly, no gain or loss will be recognized by Eligible
Account Holders and Supplemental Eligible Account Holders upon the
distribution to them of the nontransferable subscription rights to
purchase shares of Common Stock in the Holding Company (Section
356(a)). Eligible Account Holders and Supplemental Eligible
Account Holders will not realize any taxable income as a result of
the exercise by them of the nontransferable subscription rights
(Rev. Rul. 56-572, 1956-2 C.B. 182).
7. The basis of the deposit accounts in the Stock Bank to be received
by the Eligible Account Holders, Supplemental Eligible Account
Holders and other depositors of the Bank will be the same as the
basis of their deposit accounts in the Bank surrendered in
exchange therefor (Section 358(a)(1) of the Code). The basis of
the interests in the liquidation account of the Stock Bank to be
received by the Eligible Account Holders and Supplemental Eligible
Account Holders of the Bank shall be zero (Rev. Rul. 71-233,
1971-1 C.B. 113).
8. It is more likely than not that the basis of the Holding Company
Common Stock to its stockholders will be the purchase price
thereof (Section 1012 of the Code). The
Clay County Savings and Loan Association
September 17, 2002
Page 5
holding period of the Common Stock purchased pursuant to the
exercise of subscription rights shall commence on the date on
which the right to acquire such stock was exercised (Section
1223(6) of the Code).
9. For purposes of Section 381 of the Code, Stock Bank will be
treated as if there had been no reorganization. Accordingly, the
taxable year of Bank will not end on the effective date of the
Conversion merely because of the transfer of assets of Bank to
Stock Bank, and the tax attributes of Bank will be taken into
account by Stock Bank as if there had been no reorganization.
(Treas. Reg. `1.381(b)-(1)(a)(2)).
10. The part of the taxable year of Bank before the reorganization and
the part of the taxable year of Stock Bank after the
reorganization will constitute a single taxable year of Stock
Bank. See Rev. Rul. 57-276, 1957-1 C.B. 126. Consequently, Bank
will not be required to file a federal income tax return for any
portion of such taxable year solely by reason of the Conversion.
Treas. Reg. `1.381(b)-1(a)(2).
11. The tax attributes of Bank enumerated in Code Section 381(c) will
be taken into account by Stock Bank. Treas. Reg. `1.381(b)-1(a)
(2).
Notwithstanding any reference to Code Section 381 above, no opinion is
expressed or intended to be expressed herein as to the effect, if any, of this
transaction on the continued existence of, the carryover or carryback of, or the
limitation on, any net operating losses of Bank or its successor, Stock Bank,
under the Code.
Our opinion under paragraph 6 above is predicated on the representation
that no person shall receive any payment, whether in money or property, in lieu
of the issuance of subscription rights. Our opinion under paragraphs 6 and 8 is
based on the position that the subscription rights to purchase shares of Common
Stock received by Eligible Account Holders, Supplemental Eligible Account
Holders and Other Members have a fair market value of zero. We understand that
the subscription rights will be granted at no cost to the recipients, will be
legally non-transferable and of short duration, and will provide the recipient
with the right only to purchase shares of Common Stock at the same price to be
paid by members of the general public in any Community Offering. We also note
that the Internal Revenue Service has not in the past concluded that
subscription rights have value. Based on the foregoing, we believe it is more
likely than not that the nontransferable subscription rights to purchase Common
Stock have no value.
If the subscription rights are subsequently found to have a fair market
value, income may be recognized by various recipients of the subscription rights
(in certain cases, whether or not the rights are exercised) and the Holding
Company and/or the Stock Bank may be taxable on the distribution of the
subscription rights.
Clay County Savings and Loan Association
September 17, 2002
Page 6
CONSENT
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form SB-2 ("Registration Statement") of the Holding
Company filed with the Securities and Exchange Commission with respect to the
Conversion and as an exhibit to the Application for Conversion on Form AC ("Form
AC") of Bank filed with the OTS with respect to the Conversion. We also hereby
consent to the references to this firm in the prospectus which is a part of both
the Registration Statement and the Form AC.
USE OF OPINION
This opinion is rendered solely for the benefit of the Holding Company
and Bank, and may not be quoted in whole or in part or otherwise referred to,
nor is it to be filed with any governmental agency or other person without our
prior written consent.
Very truly yours,
LUSE GORMAN POMERENK & SCHICK,
A PROFESSIONAL CORPORATION
By:/s/ Luse Gorman Pomerenk & Schick
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