1
EXHIBIT 8.2
November __, 1998
The Board of Directors The Board of Directors
of Lodgian, Inc. of P-Burg Lodging Associates, Inc.
1601 Belvedere Road Two Live Oak Center
West Palm Beach, Florida 33406 3445 Peachtree Road, N.E., Suite 700
Atlanta, Georgia 30326
The Board of Directors The Board of Directors
of Hazard Lodging Associates, Inc. of Memphis Lodging Associates, Inc.
Two Live Oak Center Two Live Oak Center
3445 Peachtree Road, N.E., Suite 700 3445 Peachtree Road, N.E., Suite 700
Atlanta, Georgia 30326 Atlanta, Georgia 30326
The Board of Directors The Board of Directors
of Delk Lodging Associates, Inc. of Impac Hotel Development, Inc.
Two Live Oak Center Two Live Oak Center
3445 Peachtree Road, N.E., Suite 700 3445 Peachtree Road, N.E., Suite 700
Atlanta, Georgia 30326 Atlanta, Georgia 30326
The Board of Directors The Board of Directors
of Impac Design and Construction, Inc. of Impac Hotel Group, Inc.
Two Live Oak Center Two Live Oak Center
3445 Peachtree Road, N.E., Suite 700 3445 Peachtree Road, N.E., Suite 700
Atlanta, Georgia 30326 Atlanta, Georgia 30326
Re: Merger of Lodgian Affiliated Subsidiaries with and into Impac
Affiliated Companies.
Ladies and Gentlemen:
You have requested our opinion as to the tax consequences under the
Internal Revenue Code of 1986, as amended (the "Code") of the mergers
(individually, a "Merger" and collectively, the "Mergers") of SHG-II SUB, INC.,
SHG-III SUB, INC., SHG-IV SUB, INC., SHG-V SUB, INC., SHG-VI SUB, INC., SHG-VII
SUB, INC., and SHG-VIII SUB, INC. (collectively, the "Lodgian Affiliated
Subsidiaries"), all the stock of each of which is owned directly by Lodgian,
Inc. ("Lodgian"), with and into P-Burg Lodging Associates, Inc., Hazard Lodging
Associates, Inc., Memphis Lodging Associates, Inc., Delk Lodging Associates,
Inc., Impac Hotel Development, Inc., Impac Design and Construction, Inc., and
Impac Hotel Group, Inc. (individually, an "Impac Affiliated Company" and
collectively, the "Impac Affiliated Companies"), respectively, with each
2
of the Impac Affiliated Companies as the entities surviving each of the Mergers,
in accordance with the terms of that certain Amendment to the Amended and
Restated Agreement and Plan of Merger, dated as of September 16, 1998, and that
certain Amended and Restated Agreement and Plan of Merger, dated as of July 22,
1998, by and among Servico, Inc., Impac Hotel Group, L.L.C., Lodgian, the Impac
Affiliated Companies, and the Lodgian Affiliated Subsidiaries (collectively, the
"Merger Agreement") copies of which are incorporated herein by reference.
Specifically, you have requested us to opine that the Mergers of the Lodgian
Affiliated Subsidiaries and the Impac Affiliated Companies will be disregarded
for federal income tax purposes and that the shareholders of the Impac
Affiliated Companies will be deemed to have transferred their Impac Affiliated
Companies stock for Lodgian Common Stock and cash in a transaction that
qualifies as a transfer to a controlled corporation within the meaning of
Section 351 of the Code.
In rendering the opinions expressed below, we have examined the
following documents (the "Documents"):
(a) The Merger Agreement;
(b) The certificates containing the Statements of Facts and
Representations of Lodgian and Servico, and of the Impac
Affiliated Companies (the "Tax Representations") attached
hereto as Exhibits A, B, C, D, E, F, G, and H respectively,
and incorporated herein by reference; and,
(c) Such other documents and records as we have deemed necessary
in order to enable us to render the opinions expressed below.
Terms not otherwise defined in this opinion letter have the meaning
given those terms in the Documents.
In rendering the opinions expressed below, we have assumed, without any
independent investigation or verification of any kind, that all of the
information as to factual matters contained in the Documents is true, correct,
and complete. Any inaccuracy with respect to factual matters contained in the
Documents or incompleteness in our understanding of the facts could alter the
conclusion reached in this opinion.
In addition, for purposes of rendering the opinions expressed below, we
have assumed with your permission, that (i) all signatures on all Documents
reviewed by us are genuine, (ii) all Documents submitted to us as originals are
true and correct, (iii) all Documents submitted to us as copies are true and
correct copies of the originals thereof, (iv) each natural person signing any
Document reviewed by us had the legal capacity to do so, and (v) that the
Mergers will be effected in accordance with the terms set forth in the
documents.
In addition, you have not asked us to opine with respect to any tax
considerations under foreign, state, or local laws, or the tax considerations to
certain holders of Impac Affiliated
3
Companies shares in light of their particular circumstances, specifically,
shareholders who are not United States persons, dealers in securities,
tax-exempt entities, and other shareholders who acquired their interests in any
of the Impac Affiliated Companies pursuant to the exercise of options or
otherwise as compensation. Also, this opinion does not address any tax
considerations associated with the receipt of Lodgian Common Stock by holders of
Impac Affiliated Companies options or warrants in exchange for such options or
warrants.
OPINION
Based upon and subject to the foregoing, it is our opinion that the
Mergers will be disregarded for federal income tax purposes and will be treated
as if the shareholders of Impac Affiliated Companies stock exchanged their stock
directly for Lodgian Common Stock and cash pursuant to the terms of the Merger
Agreement, and that the Mergers, along with the Servico Merger and the Impac
Merger, as set forth in the Merger Agreement, will be considered integral steps
that are part of an overall plan and, as such, the exchange of Impac Affiliated
Companies stock by the holders of that stock for Lodgian Common Stock and cash
will be considered to be a transfer to a controlled corporation within the
meaning of Section 351 of the Code. Accordingly, it is our opinion that:
a. No income, gain, or loss is recognized for federal income tax
purposes by Lodgian, the Lodgian Affiliated Subsidiaries, or
the Impac Affiliated Companies as a result of the Mergers.
Code Sections 361(a) and 1032(a).
No gain or loss is recognized for federal income tax purposes
by a shareholder of an Impac Affiliated Company stock upon the
transfer of such stock for shares of Lodgian Common Stock,
except that gain realized on the transfer (if any), but not
loss, will be recognized by the shareholder but not in excess
of the cash received by the shareholder. Code Section 351(a)
and (b). The amount of gain (if any) realized by a shareholder
of an Impac Affiliated Company stock will be equal to the
excess, if any, of the sum of the fair market value of the
Lodgian Common Stock and the cash received in the Merger over
such shareholder's basis in the Impac Affiliated Company
stock.
c. The basis of the Lodgian Common Stock received in a Merger by
a shareholder of an Impac Affiliated Company stock equals that
shareholder's basis in his Impac Affiliated Company stock
exchanged in the Merger increased by the amount of gain
recognized under paragraph b. and decreased by the amount of
cash received by that shareholder in the Merger. Code Section
358(a).
4
d. The holding period of the Lodgian Common Stock received in a
Merger by an Impac Affiliated Company shareholder includes the
holding period of such shareholder's Impac Affiliated Company
stock transferred to Lodgian in the Merger, provided the stock
was held as a capital asset by the Impac Affiliated Company
shareholder on the date of the Merger. Code Section 1223(1).
e. The character of any gain recognized, as set forth in
paragraph b. above, by an Impac Affiliated Company shareholder
will be capital gain, assuming that the shareholder holds his
Impac Affiliated Company stock as a capital asset. Code
Section 1221.
* * * * *
Our opinions are based upon the facts as they exist today, the existing
provisions of the Code, Treasury Regulations issued or proposed thereunder,
published Revenue Rulings and releases of the Internal Revenue Service, and
existing federal case law, any of which could be changed at any time. Any such
change may be retroactive in application and could modify or render one or more
of the legal opinions expressed herein null and void.
This opinion letter is being furnished only to the parties to which it
is addressed and is solely for their benefit. No other person shall be entitled
to rely on the opinions without our prior express written consent. This opinion
letter may not be used, circulated, quoted, published, or otherwise referred to
for any purpose without our prior express written consent. Our opinions are
limited to the matters stated herein, and no opinion is implied or may be
inferred beyond the opinions expressly stated herein.
We hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment No. 1 to the Registration Statement on Form S-4 of
Lodgian, Inc. (Regis. No. 333- 59315) and to the reference to our firm in the
aforementioned Registration Statement. In giving such consent, we do not thereby
admit that we are acting within the category of persons whose consent is
required under Section 7 of the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP