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EXHIBIT 8.3
November __, 1998
The Board of Directors The Manager of Impac Hotel Group, L.L.C.
of Lodgian, Inc. Two Live Oak Center
1601 Belvedere Road 3445 Peachtree Road, N.E., Suite 700
West Palm Beach, Florida 33406 Atlanta, Georgia 30326
Re: Merger of SHG-I SUB, L.L.C. with and into Impac Hotel Group, L.L.C.
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 merger of SHG-I
SUB, L.L.C. ("Subsidiary"), a Georgia limited liability company, all of the
interests in which are owned directly by Lodgian, Inc. ("Lodgian"), with and
into Impac Hotel Group, L.L.C. ("Impac"), with Impac as the entity surviving the
merger (the "Impac Merger"), 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 Lodgian, Impac, and the
Subsidiary, among others, (collectively, the "Merger Agreement") copies of which
are incorporated herein by reference. Specifically, you have requested us to
opine that the Impac Merger will be disregarded for federal income tax purposes
and that the holders of Impac units transferred those units for 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 Subsidiary, and of Impac (the
"Tax Representations") attached hereto as Exhibits A and B,
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
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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 Impac
Merger 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 Impac units in light of their particular circumstances,
specifically, unitholders who are not United States persons, dealers in
securities, tax-exempt entities, and other unitholders who acquired their
interests in Impac 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 options
or warrants in exchange for such options or warrants.
OPINION
Based upon and subject to the foregoing, it is our opinion that the
Impac Merger will be disregarded for federal income tax purposes and will be
treated as if the holders of Impac units exchanged those units directly for
Lodgian Common Stock and cash pursuant to the terms of the Merger Agreement, and
that the Impac Merger, along with the Servico Merger, the P-Burg Merger, the
Hazard Merger, the Memphis Merger, the Delk Merger, the IHD Merger, the IDC
Merger, and the IHG 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 units by the holders of those units 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, Subsidiary, or Impac as a result of the
Impac Merger. Code Sections 361(a) and 1032(a).
Except as set forth in paragraph e. below, no gain or loss is
recognized for federal income tax purposes by a holder of
Impac units upon the transfer of the units for shares of
Lodgian Common Stock, except that gain realized on the
transfer (if any), but not loss, will be recognized by the
unitholder but not in excess of the cash received by the
unitholder. Code Section 351(a) and (b). The amount of gain
(if any) realized
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by a holder of Impac units 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 Impac Merger over such
holder's basis in the Impac units. The gain realized by a
holder of Impac units upon the transfer of such units will not
include the gain, if any, recognized in paragraph e. below due
to liabilities assumed in excess of basis.
c. The basis of the Lodgian Common Stock received by a holder of
Impac units as a result of the Impac Merger equals that
shareholder's basis in the Impac units exchanged in the Impac
Merger increased by the amount of gain recognized under
paragraph b. and e. and decreased by the sum of the amount of
cash received in the Impac Merger and the unitholder's
allocable share of Impac indebtedness as of the time of the
Impac Merger. Code Section 358(a) and (d).
d. The holding period of the Lodgian Common Stock received in the
Impac Merger by a holder of Impac units includes the holding
period of the units deemed transferred to Lodgian in the Impac
Merger, provided the units were held as a capital asset on the
date of the Impac Merger. Code Section 1223(1).
e. In addition to any gain recognized under paragraph b. above, a
holder of Impac units will recognize gain to the extent that
the unitholder's allocable share of Impac indebtedness as of
the time of the Impac Merger exceeds such unitholder's
adjusted basis in his Impac units at such time. Code Sections
357(c) and 752(d).
f. The character of any gain recognized, as set forth in
paragraphs b. and e. above, by a holder of Impac units will be
capital gain, assuming that the unitholder holds his Impac
units as a capital asset, except to the extent that the gain
is attributable to Impac's unrealized receivables as defined
in Code Section 751(c), including any depreciation recapture
gain Impac would be required to recognize if Impac had sold
its properties at their fair market values and Impac's
inventory items as defined in Code Section 751(d). Code
Section 741 and 751(c).
* * * * *
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
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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