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EXHIBIT 8.1
[ARTHUR ANDERSEN LETTERHEAD]
March 20, 1997
Board of Directors
GulfMark International, Inc.
5 Post Oak Park, Suite 1170
Houston, Texas 77027-3414
Board of Directors
Energy Ventures, Inc.
5 Post Oak Park, Suite 1760
Houston, Texas 77027-3415
Re: Distribution by GulfMark International, Inc. of the stock of a newly
formed, wholly owned corporation, GulfMark Offshore, Inc., to its
stockholders and related matters
Gentlemen:
You have requested our opinion regarding certain federal income tax, Texas
franchise tax, and Louisiana income and franchise tax consequences of (1) the
merger of Ercon Development Co. ("Ercon") under state law into its parent
company, GulfMark International, Inc. ("GulfMark") (the "Liquidation"); (2) the
transfer by GulfMark of all of the outstanding stock of its marine operating
subsidiaries and certain assets related to their business (individually, a
"Marine Asset"; collectively, the "Marine Assets") to GulfMark Offshore, Inc.
("New GulfMark") solely in exchange for New GulfMark common stock and the
assumption of related liabilities, and the pro rata distribution by GulfMark of
all of the outstanding stock of New GulfMark to the holders of GulfMark common
stock (collectively, the "Spin-off"); and (3) the acquisition of all of the
outstanding shares of GulfMark common stock by Energy Ventures, Inc. ("EVI") in
a transaction in which GulfMark Acquisition Co. ( "Merger Sub"), a newly formed
Delaware subsidiary of EVI, will be merged with and into GulfMark and as a
result thereof the holders of GulfMark common stock will receive solely shares
of EVI voting common stock (the "Merger").
In rendering our opinion, we have relied upon the accuracy and completeness of
the facts, assumptions and representations (without regard to any limitation
based on knowledge or belief) (i) set forth herein, (ii) contained in the
documents listed on Exhibit A to this opinion, and(iii) set forth in the
representation letters, dated March 20, 1997, signed by appropriate officers of
GulfMark and EVI (attached as Exhibit B). GulfMark, as to the Liquidation, the
Spin-off and the Merger, and EVI, as to the Merger, have represented that such
facts, assumptions and representations are true, correct and complete.
However, we have not independently audited or otherwise verified any of these
facts, assumptions or other representations. A misstatement or omission of any
fact or a change or amendment in any of the facts, assumptions or
representations we have relied upon may require a modification of all or a part
of this opinion. In addition,
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our opinion is based on the facts as represented to us as of the date of this
letter. Any changes in the facts or form of the transactions between the date
of this letter and the actual closing of the transactions may require a
modification of all or part of this opinion. We have no responsibility to
update this opinion for events, transactions, circumstances or changes in any
of the facts, assumptions or representations occurring after this date.
Premise of Opinion
Our opinion is expressed only with respect to what we considered to be the
material federal income tax, Texas franchise tax, and Louisiana income and
franchise tax consequences of the Liquidation, the Spin-off and the Merger
under the conditions described herein. The opinion expressed herein is based
upon our interpretation of the Internal Revenue Code of 1986, as amended (the
"Code"), income tax regulations thereunder, court decisions, rulings and
procedures issued by the Internal Revenue Service (the "Service"), the Texas
Tax Code and the Louisiana Revised Statutes, and other authorities that we
deemed relevant, in each case as of the date of this letter. Should there be
any change, including any change having retroactive effect, in any of such
authorities , the opinion expressed herein would necessarily have to be
reevaluated in light of such change. In this regard, President Clinton's
budget recommendations announced in February 1997 called for the enactment of a
new legislative provision that, if enacted in its proposed form with an
effective date applicable to stock distributions made on the date of the Spin-
off, would require GulfMark, for federal income tax purposes, to recognize gain
equal to the excess of the value of the New GulfMark common stock distributed
to GulfMark's stockholders in the Spin-off over GulfMark's basis in such New
GulfMark common stock. As proposed, the provision would be effective for stock
distributions made after the date of first action by a Congressional tax-
writing committee. To date, there has been no such committee action on the
recommendation. In addition, the Service has indicated that regulations will be
issued for certain "inversion" transactions, occurring after September 21,
1994, which depending on the scope and content of those regulations, could
require GulfMark and/or its stockholders to recognize gain or income as a
result of the Merger (see Notice 94-93, 1994-2 C.B. 563). Our opinion is as of
the date hereof and we have no responsibility to update our opinion for changes
in applicable law or other authorities occurring after its date of issuance.
We have not considered any non-income tax consequences, or any state, local,
foreign, or other income tax (other than federal income tax, Texas franchise
tax, and Louisiana income and franchise tax) consequences, and therefore we
express no opinion regarding the treatment that would be accorded the
Liquidation, the Spin-off or the Merger for such purposes. We also express no
opinion on non-tax issues, such as corporate law or securities law matters.
The opinion does not address the tax consequences of the Spin-off or the Merger
to a GulfMark stockholder that has a special status, including insurance
companies; tax-exempt entities; financial institutions or broker-dealers;
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foreign corporations; estates and trusts not subject to U.S. federal income tax
on their income regardless of source; persons who are not citizens or residents
of the United States; and persons who acquired their GulfMark common stock as a
result of the exercise of an employee stock option, pursuant to an employee
stock purchase plan, or otherwise as compensation.
Further, our opinion does not address the potential tax ramifications to New
GulfMark, GulfMark, and their affiliates or stockholders of any transaction
other than the Liquidation, the Spin-off and the Merger.
This opinion is not binding on the Service or the respective state taxing
authorities, and there can be no assurance that the Service or such authorities
will not take positions contrary to the opinion expressed herein. However,
should the Service or such authorities challenge the tax treatment of the
Liquidation, the Spin-off or the Merger, the opinions expressed herein reflect
our assessment of the probable outcome of litigation based solely on an
analysis of the existing tax authorities relating to the issues.
Certain Federal Income Tax, Texas Franchise Tax, and Louisiana Income and
Franchise
Tax Consequences of the Liquidation, the Spin-off and the Merger
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Our opinions are limited to the federal income tax, Texas franchise tax, and
Louisiana income and franchise tax consequences of the Liquidation, the Spin-
off and the Merger that we believe are material to New GulfMark, GulfMark, the
GulfMark common stockholders, and EVI. In our opinion:
Liquidation Opinions
1. GulfMark will recognize no gain or loss upon receipt of Ercon's assets
pursuant to the Form of Agreement and Plan of Merger, by and between
Ercon and GulfMark (Code Section 332(a)).
2. GulfMark's basis in Ercon's assets will be equal to the basis of such
assets in the hands of Ercon immediately prior to the transaction (Code
Section 334(b)(1)).
3. GulfMark's holding period in Ercon's assets will include the period
during which Ercon held such assets (Code Section 1223(2)).
4. Pursuant to Code Section 381(a) and Treas. Reg. Section 1.381(a)-1,
GulfMark will succeed to and take into account the items of Ercon
described in Code Section 381(c), subject to the conditions and
limitations specified in Code Sections 381(b) and (c), 382, 383 and 384.
5. As provided in Code Section 381(c)(2) and Treas. Reg. Section
1.381(c)(2)-1, GulfMark will succeed to and take into account the
earnings and profits or deficit in earnings and profits of Ercon as of
the date of the distribution. Any deficit in earnings and profits
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of Ercon will be used only to offset earnings and profits accumulated
after the date of the distribution.
6. Ercon will recognize no gain or loss on the distribution of its assets
to GulfMark in complete liquidation (Code Section 337(a)).
7. The Texas franchise tax and Louisiana income and franchise tax
consequences of the Liquidation to Ercon and GulfMark will be consistent
with the federal income tax consequences described in opinions 1-6
above.
Spin-off Opinions
8. Under Code Sections 368(a)(1)(D), 361(a), 361(b), and 361(c), GulfMark
will recognize no gain or loss on (i) the transfer of the Marine Assets
to New GulfMark solely in exchange for New GulfMark common stock and the
assumption of related liabilities, and (ii) the distribution by GulfMark
of the New GulfMark common stock to the holders of GulfMark common stock
with respect to their GulfMark common stock.
9. Under Code Section 355(a)(1), the holders of GulfMark common stock will
recognize no gain or loss, and will have no amounts includible in their
income, upon the distribution by GulfMark of the New GulfMark common
stock to such holders with respect to their GulfMark common stock.
10. Under Code Section 1032(a), no gain or loss will be recognized by New
GulfMark on receipt of the Marine Assets in exchange for New GulfMark
common stock.
11. Under Code Sections 358(a)(1) and (b) and Treas. Reg. Section
1.358-2(a)(2), the basis of the shares of the New GulfMark common stock
and GulfMark common stock in the hands of each holder of GulfMark common
stock immediately after the distribution of the New GulfMark common
stock will be determined by allocating the aggregate basis of the shares
of GulfMark common stock held by such holder immediately before the
distribution among the shares of New GulfMark common stock and GulfMark
common stock held by such holder immediately after the distribution in
proportion to the fair market values of the New GulfMark common stock
and the GulfMark common stock held immediately after the distribution.
12. Under Code Section 1223(1), the holding period of the New GulfMark
common stock distributed to each holder of GulfMark common stock will
include the holding period of the GulfMark common stock held by such
holder, provided that such GulfMark common stock is a capital asset in
the hands of such holder on the date of the distribution.
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13. Under Code Section 362(b), the basis of each Marine Asset received by
New GulfMark will be the same as the basis of such Marine Asset in the
hands of GulfMark immediately prior to the distribution.
14. Under Code Section 1223(2), the holding period of each Marine Asset
received by New GulfMark will include the period during which such
Marine Asset was held by GulfMark.
15. The subsequent exchange of GulfMark common stock for EVI voting common
stock in the merger will not adversely affect the distribution of the
New GulfMark common stock under Code Section 355. See Rev. Rul. 68-603,
1968-2 C.B. 148, and Rev. Rul. 70-434, 1970-2 C.B. 83.
16. The Texas franchise tax and Louisiana income and franchise tax
consequences of the Spin-off to GulfMark and New GulfMark will be
consistent with the federal income tax consequences described in
opinions 8-15 above.
Merger Opinions
17. The Merger will be treated for federal income tax purposes as an
exchange of all of the outstanding stock of GulfMark solely for voting
common stock of EVI and will qualify as a reorganization within the
meaning of Code Section 368(a)(1)(B). Under Code Section 368(b),
GulfMark and EVI will be parties to the reorganization. Neither EVI nor
Merger Sub will recognize any gain or loss as a result of the receipt by
EVI of GulfMark common stock solely in exchange for EVI voting common
stock in the Merger pursuant to Code Section 1032(a) and Rev. Rul. 67-
448, 1967-2 C.B. 144.
18. GulfMark will recognize no gain or loss as a result of EVI's acquisition
of all of GulfMark's outstanding common stock in the Merger. Rev. Rul.
67-448.
19. The holders of GulfMark common stock will recognize no gain or loss as a
result of receiving solely EVI voting common stock in exchange for their
GulfMark common stock in the Merger pursuant to Code Section 354(a)(1).
20. Under Code Section 358(a)(1), the basis of the shares of the EVI voting
common stock in the hands of each holder of GulfMark common stock
(including any fractional share interest to which any holder is
entitled) immediately following the Merger will be the same as the basis
of the shares of GulfMark common stock surrendered in exchange therefor.
21. Under Code Section 1223(1), the holding period of the EVI voting common
stock (including any fractional share interest to which any holder is
entitled) received by each holder of GulfMark common stock will include
the holding period of the
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GulfMark common stock held by such holder, provided that such GulfMark
stock is a capital asset in the hands of such holder on the date of the
Merger.
22. The payment of cash (via an exchange agent) in lieu of fractional share
interests in EVI common stock will be treated for federal income tax
purposes as if the fractional shares were issued as part of the Merger
and were subsequently redeemed by EVI. The cash payments will be
treated as having been received as distributions in full payment in
exchange for the stock received as provided in Code Section 302(a).
Rev. Rul. 66-365, 1966-2 C.B. 116 and Rev. Proc. 77-41, 1977-2 C.B. 574.
Provided the fractional share interest is a capital asset in the hands
of the exchanging holder, gain or loss will be recognized on such
exchange (determined under Code Section 1001 and subject to the
limitations of Code Section 267) and will constitute capital gain or
loss to such holder subject to the provisions and limitations of
Subchapter P and Chapter 1 of the Code.
23. The Texas franchise tax and Louisiana income and franchise tax
consequences of the Merger to GulfMark and EVI will be consistent with
the federal income tax consequences as described in opinions 17-22
above.
This opinion is solely for your benefit and that of your stockholders and is
not intended to be relied upon by any other party. Except to the extent
expressly permitted hereby, and without the prior written consent of this firm,
this letter may not be quoted in whole or in part, or otherwise referred to in
any documents or delivered to any person or entity. Any such authorized other
party receiving a copy of this letter must consult and rely upon the advice of
their own counsel, accountant or other advisor.
We hereby consent to the filing of this opinion as an exhibit to the Form S-4
Registration/Proxy Statement and to the reference to us in such document.
Very truly yours,
ARTHUR ANDERSEN LLP
/s/ ARTHUR ANDERSEN LLP
Attachment
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EXHIBIT A
LISTING OF DOCUMENTS
1. Agreement and Plan of Distribution, by and among GulfMark International,
Inc., New GulfMark International, Inc., and Energy Ventures, Inc. dated
December 5, 1996.
2. Agreement and Plan of Merger, among Energy Ventures, Inc., GulfMark
Acquisition Co., GulfMark International, Inc., and New GulfMark
International, Inc. dated December 5, 1996.
3. Form of Agreement and Plan of Merger, by and between Ercon Development
Co. and GulfMark International, Inc.
4. Form S-4 Registration Statement/Proxy Statement, dated March 10, 1997,
including any exhibits and amendments thereto.