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Exhibit 8.1
Brown & Wood LLP
555 California Street
San Francisco, CA 94104
February 28, 2001
The Detroit Edison Securitization Funding LLC
2000 2nd Avenue, 937 WCB
Detroit, Michigan 48226-1279
Re: The Detroit Edison Securitization Funding LLC
Ladies and Gentlemen:
We have acted as special federal income tax counsel to the Issuer, in
connection with (a) the sale to the Issuer of Detroit Edison's Securitization
Property, which is the property right created by Michigan's Customer Choice and
Electricity Reliability Act representing the irrevocable right of The Detroit
Edison Company ("Detroit Edison") or its assignee to receive through a
Securitization Bond Charge amounts sufficient to recover all of its Qualified
Costs and (b) the Issuer's issuance of Securitization Bonds which are supported
by Securitization Property and which are offered and sold pursuant to
Registration Statement No. 333-51066 on Form S-3, as amended from time to time
(the "Registration Statement").
In connection with our engagement, we have examined and relied upon the
forms of the Restated Articles of Organization of The Detroit Edison
Securitization Funding LLC and the Limited Liability Company Agreement for The
Detroit Edison Securitization Funding LLC included as exhibits to the
Registration Statement. In addition, the opinion expressed below is based on the
following assumptions:
(a) the Registration Statement will become effective;
(b) the proposed transactions are consummated as contemplated in the
Registration Statement;
(c) prior to the issuance of any series or class of Securitization
Bonds:
(i) all necessary orders, approvals and authorizations for the
Issuer's purchase from time to time of Securitization
Property from Detroit Edison in exchange for the net
proceeds of Securitization Bonds will have been obtained by
the Issuer;
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(ii) the Limited Liability Company Agreement of the Issuer will
have been executed and delivered by an authorized
representative of Detroit Edison as sole member of the
Issuer;
(iii) the Indenture will have been executed and delivered by the
Issuer's authorized representative and The Bank of New
York, as trustee;
(iv) the maturity dates, the bond rates, the redemption
provisions and the other terms of the Securitization Bonds
being offered will be fixed in accordance with the terms of
the Indenture;
(v) the Sale Agreement between the Issuer and Detroit Edison,
as Seller, will have been executed and delivered;
(vi) the Servicing Agreement between the Issuer and Detroit
Edison, as Servicer, will have been executed and delivered;
(vii) the private letter ruling issued by the Internal Revenue
Service dated December 7, 2000 addressed to Detroit Edison
with respect to the issuance of the Securitization Bonds
(the "Detroit Edison Private Letter Ruling") has not been
revoked; and
(viii) the Underwriting Agreement among the Issuer, Detroit Edison
and the underwriters of the Securitization Bonds (the
"Underwriting Agreement") will have been executed and
delivered;
(d) the Indenture will be qualified in accordance with the provisions
of the Trust Indenture Act of 1939, as amended.
Furthermore, we have, or will have, examined and considered executed
originals or counterparts, or certified or other copies identified to our
satisfaction as being true copies of such certificates, instruments, documents
and other corporate records of each of the Issuer and Detroit Edison and matters
of fact and law as we deem necessary for the purposes of the opinion expressed
below, and we have assumed (i) that such documents will in all material respects
conform to the descriptions provided therefor in the Registration Statement,
(ii) that such documents will not be amended and (iii) that the parties to such
documents will comply with the terms thereof. Capitalized terms not otherwise
defined herein have the respective meanings assigned to such terms in the
Registration Statement.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents. As to any facts material to the opinions expressed herein which were
not independently established or verified, we have relied upon statements,
representations, and certifications of officers and other representatives of the
Issuer, Detroit Edison, the Underwriters and others.
In rendering our opinion, we have also considered and relied upon the
Internal Revenue
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Code of 1986, as amended, and administrative rulings, judicial decisions,
Treasury regulations, and such other authorities as we have deemed appropriate,
all as in effect as of the date hereof. In particular we have relied on the
Detroit Edison Private Letter Ruling. The statutory provisions, regulations and
interpretations upon which our opinion is based are subject to changes, and such
changes could apply retroactively. In addition, there can be no assurance that
the Internal Revenue Service will not take positions contrary to those stated in
our opinion.
We also note that the base prospectus included in the Registration
Statement (the "Prospectus") and the Underwriting Agreement do not relate to a
specific transaction. Accordingly, the above-referenced description of federal
income tax consequences may, under certain circumstances, require modification
in the context of an actual transaction.
We express no opinions as to the laws of any jurisdiction other than
the federal laws of the United States of America to the extent specifically
referred to herein.
Based upon and subject to the foregoing, we are of the following
opinions:
1. the Issuer will not be subject to United States federal income tax
as an entity separate from Detroit Edison; and
2. the statements in the Prospectus under the heading "Summary of
Terms - Material Income Tax Consequences" and under the heading
"Material Federal Income Tax Consequences for the Securitization
Bonds" subject to the qualifications set forth therein and the
assumptions stated therein, accurately describe the material
federal income tax consequences under existing law to holders of
the Securitization Bonds that are not U.S. persons (within the
meaning of the Code), and that are U.S. persons who purchase
Securitization Bonds at their original issuance.
Furthermore, subject to the qualifications and assumptions set forth therein, we
hereby adopt and confirm to you our opinion as set forth under the heading
"Material Income Tax Consequences for the Securitization Bonds" in the
Prospectus.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to Brown & Wood LLP under the
captions "Various Legal Matters Relating to the Securitization Bonds" in the
Prospectus and "Material Income Tax Consequences for the Securitization Bonds"
in the Prospectus.
Very truly yours,
/s/ Brown & Wood LLP
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