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EXHIBIT 8.1
JENKENS & GILCHRIST
A PROFESSIONAL CORPORATION
1445 ROSS AVENUE AUSTIN, TEXAS
SUITE 3200 (512) 499-3800
DALLAS, TEXAS 75202
CHICAGO, ILLINOIS
(214) 855-4500 (312) 425-3900
TELECOPIER (214) 855-4300
HOUSTON, TEXAS
www.jenkens.com (713) 951-3300
LOS ANGELES, CALIFORNIA
(310) 820-8800
NEW YORK, NEW YORK
(212) 704-6000
SAN ANTONIO, TEXAS
(210) 246-5000
February 9, 2001 WASHINGTON, D.C.
(202) 326-1500
The Board of Directors
Baylake Corp.
217 North Fourth Avenue
Sturgeon Bay, Wisconsin 54235
Re: REGISTRATION STATEMENT ON FORM S-3 - TAX OPINION REGARDING CERTAIN
FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CUMULATIVE TRUST PREFERRED SECURITIES TO BE ISSUED
BY BAYLAKE CAPITAL TRUST I
Ladies and Gentlemen:
We have acted as special counsel to Baylake Corp., a Wisconsin
corporation (the "Company"), and Depositor of Baylake Capital Trust I, a
Delaware statutory business trust (the "Trust"), in connection with the
preparation of a Registration Statement, as amended, on Form S-3 (as amended,
the "Registration Statement") filed by the Company and the Trust with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to (i) the proposed issuance by the Trust of
up to $16,100,000 aggregate Liquidation Amount of the Trust's Cumulative Trust
Preferred Securities due March 31, 2031 (the "Preferred Securities") registered
under the Securities Act; (ii) the Company's Subordinated Debentures to be
issued by the Company to the Trust (the "Debentures") registered under the
Securities Act; and (iii) the Company's guarantee (the "Guarantee"), which
guarantees the payment of distributions and payments on liquidation or
redemption of the Preferred Securities as described therein. The Preferred
Securities are issuable under an Amended and Restated Trust Agreement (the
"Trust Agreement") to be entered into between the Company, as Depositor,
Wilmington Trust Company, a Delaware trust company, as Delaware Trustee and as
Property Trustee, and Thomas L. Herlache, an individual, Steven D. Jennerjohn,
an individual, and John A. Hauser, an individual, each an Administrative
Trustee; the Debentures are issuable under an indenture (the "Indenture") to be
entered into between the Company and Wilmington Trust Company, as Trustee; and
the Guarantee relates to the Guarantee Agreement (the "Guarantee Agreement") to
be entered into between the Company and Wilmington Trust Company, as Guarantee
Trustee. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Trust Agreement, the Indenture and
the Guarantee Agreement, as applicable. You have requested the tax opinion set
forth in Section C. hereof. All capitalized terms used in this opinion letter
and not otherwise defined herein have the same meaning as set forth in the
Registration Statement.
Set forth below are our opinions and assumptions and the documents upon
which we have relied in rendering our opinions.
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JENKENS & GILCHRIST
A PROFESSIONAL CORPORATION
February 9, 2001
Page 2
A. Documents Reviewed
In connection with the opinions rendered below, we have relied upon the
following documents:
1. the form of Trust Agreement of the Trust;
2. the Certificate of Trust of the Trust, dated as of October 25,
2000;
3. the form of Preferred Securities Certificate of the Trust;
4. the form of Guarantee Agreement for the Trust;
5. the form of Agreement as to Expenses and Liabilities;
6. the form of Debentures; and
7. the form of Indenture
in each case in the form filed as an exhibit to the Registration Statement. In
addition, we have relied upon representations made to us by the Company (the
"Certificate").
B. Assumptions
In connection with the opinions rendered below, we have assumed:
1. that all signatures on all documents submitted to us are genuine,
that all documents submitted to us as originals are authentic, that all
documents submitted to us as copies are accurate, that all information submitted
to us is accurate and complete, and that all persons executing and delivering
originals or copies of documents examined by us are competent to execute and
deliver such documents; and
2. that the Trust Agreement, the Certificate of Trust, the Preferred
Securities Certificate, the Preferred Securities Guarantee Agreement, the
Agreement as to Expenses and Liabilities; the Debentures and the Indenture when
executed, will be executed in substantially the form reviewed by us and that the
terms of the Debentures when established in conformity with the Indenture will
not violate any applicable law.
C. Opinions
Based solely upon the documents and assumptions set forth above, and
conditioned upon the initial and continuing accuracy of the factual
representations set forth in the Certificate as of the date
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JENKENS & GILCHRIST
A PROFESSIONAL CORPORATION
February 9, 2001
Page 3
hereof, and assuming full compliance with the terms of the Trust Agreement and
the Indenture, it is our opinion that for United States federal income tax
purposes:
1. The Trust will be classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation. Accordingly, each beneficial owner of Preferred Securities will be
treated as owning an undivided beneficial interest in the Debentures.
2. The Debentures will be classified as indebtedness of the
Company for federal income tax purposes.
3. The discussion contained under the heading "Material Federal
Income Tax Consequences" in the preliminary prospectus constituting part of the
Registration Statement, insofar as such statements constitute matters of law or
legal conclusions, as qualified therein, is our opinion and is a fair and
accurate statement of the material United States federal income tax consequences
of the purchase, ownership and disposition of Preferred Securities, based upon
current law as it relates to holders described therein.
D. Limitations
1. Except as otherwise indicated, the opinions contained in this
letter are based upon the Internal Revenue Code of 1986, as amended (the "Code")
and its legislative history, the Treasury regulations promulgated thereunder
(the "Regulations"), judicial decisions, and current administrative rulings and
practices of the Internal Revenue Service, all as in effect on the date of this
letter. These authorities may be amended or revoked at any time. Any such
changes may or may not be retroactive with respect to transactions entered into
or contemplated prior to the effective date thereof and could significantly
alter the conclusions reached in this letter. There is no assurance that
legislative, judicial, or administrative changes will not occur in the future.
We assume no obligation to update or modify this letter to reflect any
developments that may occur after the date of this letter.
2. The opinions expressed herein represent counsel's best legal
judgment and are not binding upon the Internal Revenue Service or the courts and
are dependent upon the accuracy and completeness of the documents we have
reviewed under the circumstances, the assumptions made and the factual
representations contained in the Certificate. To the extent that any of the
factual representations provided to us in the Certificate is with respect to
matters set forth in the Code or the Regulations, we have reviewed with the
individuals making such factual representations the relevant portions of the
Code and the applicable Regulations and are reasonably satisfied that such
individuals understand such provisions and are capable of making such factual
representations. We have made no independent investigation of the facts
contained in the documents and assumptions set forth above, the factual
representations set forth in the Certificate, or the Registration Statement. No
facts have come to our attention, however, that would cause us to question the
accuracy and completeness of such facts or documents in a material way. Any
material inaccuracy or incompleteness in these
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JENKENS & GILCHRIST
A PROFESSIONAL CORPORATION
February 9, 2001
Page 4
documents, assumptions or factual representations (whether made by Baylake or
otherwise) could adversely affect the opinions stated herein.
3. Our opinion is limited to those federal income tax issues
specifically considered herein and no opinion is expressed as to any other
federal income tax consequence of the transactions contemplated by the Trust
Agreement except as specifically set forth herein, and this opinion may not be
relied upon except with respect to the consequences specifically discussed
herein. This opinion does not address the various state, local or foreign tax
consequences that may be applicable as a result from the transactions
contemplated by the Trust Agreement.
4. This opinion letter is issued for your benefit and the holders
of Preferred Securities and no other person or entity may rely hereon without
our express written consent. This opinion letter may be filed as an exhibit to
the Registration Statement. Furthermore, we consent to the reference to Jenkens
& Gilchrist, a Professional Corporation, under the captions "Material Federal
Income Tax Consequences" and "Legal Matters." In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under section 7 of the Securities Act or the rules and regulations of
the Commission promulgated thereunder.
Very truly yours,
JENKENS & GILCHRIST,
a Professional Corporation
By: /s/ William P. Bowers
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William P. Bowers, Authorized Signatory