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Exhibit 8.1
LINDQUIST & VENNUM P.L.L.P.
4200 IDS CENTER IN ST. PAUL: IN DENVER:
80 SOUTH EIGHTH STREET 444 CEDAR STREET, SUITE 170T. 600 17TH STREET, SUITE 1800 SOUTH
MINNEAPOLIS, MN 55402-2274 PAUL, MN 55101-3157 DENVER, CO 80202-5441
TELEPHONE: 612-371-3211 TELEPHONE: 651-312-1300 TELEPHONE: 303-573-5900
FAX: 612-371-3207 FAX: 651-223-5332 FAX: 303-573-1956
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ATTORNEYS AT LAW www.lindquist.com
June 21, 2004
U.S. Premium Beef, Ltd.
U.S. Premium Beef, LLC
12200 North Ambassador Drive, Suite 501
Kansas City, Missouri 64163
Ladies and Gentlemen:
We have acted as legal counsel to U.S. Premium Beef, Ltd., a Kansas
cooperative (the "Cooperative") in connection with its proposed restructuring
from a Kansas cooperative association to a Delaware limited liability company
(the "LLC") to be known as U.S. Premium Beef, LLC. As such, we have participated
in the preparation and filing with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, of a Registration Statement on Form S-4
(SEC Registration No. 333-115164) relating to the proposed restructuring (the
"Registration Statement").
You have requested our opinion as to certain matters of federal tax law
that are described in the Registration Statement. We are assuming that the
restructuring will be consummated as described in the Registration Statement and
we have examined the Registration Statement and such other documents as we have
deemed necessary to render our opinion expressed below.
Based on the foregoing, it is our opinion that the restructuring of the
Cooperative into an LLC will be a taxable liquidation of the Cooperative with
the following federal income tax consequences:
o Although there is no legal authority directly on point, the
Cooperative will recognize gain or loss as if it had sold an
interest in each of its assets to each member for a price equal
to its fair market value,
o each member of the Cooperative will recognize gain or loss
measured by the difference between the adjusted basis of the
member's capital stock and/or patronage equities in the
Cooperative and the fair market value of the deemed liquidating
distribution received by the member, and
LINDQUIST & VENNUM P.L.L.P.
June 21, 2004
Page 2
o each member may apply customary discounts for lack of
marketability and lack of control in determining the fair market
value of the liquidating distribution.
With respect to the formation of the LLC, in general, neither gain nor
loss will be recognized to either the LLC or to the LLC's members on the deemed
contribution to the LLC of the assets that are deemed to have been received by
the members in the liquidating distribution.
In addition, the discussion of federal income tax consequences that
will arise from the ownership and disposition of LLC units insofar as it relates
to matters of law and legal conclusions is accurate in all material respects.
The discussion in the Registration Statement under the heading "Federal Income
Tax Consequences -- Tax Treatment of the LLC and its Members" and continuing
through "State Income Taxes" is a general description of the principal federal
income tax consequences that should arise from the ownership and disposition of
LLC units insofar as it relates to matters of law and legal conclusions, which
addresses material federal income tax consequences to prospective unitholders of
the ownership and disposition of LLC units.
Our opinion extends only to matters of law. However, the tax
consequences to the Cooperative and its members are highly dependent on matters
of fact that are not addressed in this opinion. In particular, the tax
consequences of the restructuring will depend in large part on the fair market
value of the Cooperative's net equity and the amount of the discount applied in
valuing the liquidating distribution received by the members. Both are matters
of fact that are not addressed in this opinion. If the valuation changes prior
to the closing of the transaction, our opinion may need to be updated. We also
direct your attention to the discussion in the Registration Statement of the
various tax reporting positions that the Cooperative and the LLC intend to take
that might be successfully challenged by the Internal Revenue Service to impose
taxes on the Cooperative and the LLC members in excess of those estimated in the
Registration Statement. These include challenges to the fair market value of
assets and the apportionment of fair market values to specific assets, which are
factual issues, the character and sourcing of the resulting income and gain, and
tax characterization of the restructuring itself, and the intended treatment of
patronage notices. We also note that the recommendation by management and the
Board of Directors of the Cooperative that the members approve the restructuring
is essentially a business decision that is based in part on an evaluation and
balancing of the tax risks involved in the restructuring with the benefits that
are expected to be obtained from converting to an LLC.
With limited exceptions, the discussion of taxation of the
Cooperative's members on the restructuring and the consequences to the
unitholders of the LLC arising from ownership and disposition of units in the
LLC relate to individual citizens and residents of the United States and has
limited applicability to corporations, trusts, estates or nonresident aliens.
LINDQUIST & VENNUM P.L.L.P.
June 21, 2004
Page 3
An opinion of legal counsel represents an expression of legal counsel's
professional judgment regarding the subject matter of the opinion. It is neither
a guarantee of the indicated result nor is an undertaking to defend the
indicated result should it be challenged by the Internal Revenue Service.
Neither this opinion nor the valuation opinion referenced in the Registration
Statement is in any way binding on the Internal Revenue Service or on any court
of law.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the Registration
Statement.
Sincerely,
LINDQUIST & VENNUM P.L.L.P.