Exhibit 8.1
[Sonnenschein Nath & Rosenthal Letterhead]
June 14, 2001
Kansas City Southern Industries, Inc.
1145 W. 11th St.
Kansas City, MO 64105
Dear Ladies and Gentlemen:
We have acted as tax counsel to Kansas City Southern Industries, Inc., a
Delaware corporation (the "Company"), in connection with the issuance of the
Company's Mandatory Convertible Units ("Convertible Units"), initially
consisting of units (referred to as "Corporate Units") comprised of stock
purchase contracts and senior notes due 2007 (the "Notes") issued by The Kansas
City Southern Railway Company, a wholly-owned subsidiary of the Company
("KCSR"), and guaranteed by the Company and certain of its subsidiaries.
In formulating our opinion, we have reviewed such documents as we deemed
necessary or appropriate, including (i) the Registration Statement on Form S-3
filed with the U.S. Securities and Exchange Commission (the "Commission") on May
16, 2001, pursuant to the Securities Act of 1933, and declared effective June 5,
2001 (the "Registration Statement"); (ii) the Prospectus of the Company that was
included in the Registration Statement on Form S-3 (the "Prospectus"); (iii) the
form of Indenture, between the Company and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee") filed as an exhibit to the
Registration Statement; (iv) the form of Purchase Contract Agreement, between
the Company and Bank of New York, filed as an exhibit to a document incorporated
by reference in the Prospectus which forms part of the Registration Statement,
(v) the form of Pledge Agreement between the Company, Chase Manhattan Bank as
collateral agent, and The Bank of New York as Purchase Contract agent, filed as
an exhibit to a document incorporated by reference in the Prospectus which forms
part of the Registration Statement, (vi) the form of Remarketing Agreement,
between the Company and J.P. Morgan Securities Inc., as remarketing agent, filed
as an exhibit to a document incorporated by reference in the Prospectus which
forms part of the Registration Statement.
We have also participated in the preparation of the Supplement to the
Prospectus for the Convertible Units, forming a part of the Registration
Statement (the "Prospectus Supplement"). In addition, we have made such other
factual and legal inquiries as we have considered necessary or appropriate.
Our opinion set forth below assumes (i) the initial and continuing accuracy
of the statements and facts concerning the Convertible Units set forth in the
Registration Statement, the Prospectus and the Prospectus Supplement and certain
other documents; (ii) the conformity of the Convertible Units to the terms set
forth in the Registration Statement, the Prospectus and the Prospectus
Supplement; (iii) the execution of the Indenture, Pledge Agreement, Remarketing
Agreement and Purchase Contract in substantially the same form as filed as
exhibits to the Registration Statement as set forth above and (iv) the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of all documents submitted to us as photocopies. We also
have assumed that the transactions related to the issuance of the Convertible
Units will be consummated in the manner contemplated by the Registration
Statement, the Prospectus and the Prospectus Supplement.
Based upon the foregoing and in reliance thereon, and subject to the
qualifications, exceptions, assumptions and limitations herein contained, we are
of the opinion that:
(1) the discussion in the Prospectus Supplement under the heading
"Certain Federal Income Tax Consequences" constitutes, in all material
respects, a fair and accurate summary of the matters addressed therein,
based on the assumptions stated or referred to therein; and
(2) the Notes will be treated as indebtedness of KCSR for U. S.
federal income tax purposes.
We express no opinion concerning any tax consequences associated with the
Convertible Units other than those specifically set forth herein.
Our opinion is based on current provisions of the Internal Revenue Code of
1986, as amended, Treasury Regulations promulgated thereunder, published
pronouncements of the Internal Revenue Service, and case law, any of which may
be changed at any time with retroactive effect. Any change in applicable law or
the facts and circumstances surrounding the Convertible Units, or any inaccuracy
in the statements, facts, assumptions, and representations on which we relied,
may affect the continuing validity of the opinion set forth herein. We assume no
responsibility to inform you of any such changes or inaccuracy that may occur or
come to our attention.
This opinion is furnished to you solely for your benefit in connection with
the offering of the Convertible Units and is not to be used, circulated, quoted
or otherwise referred to for any other purpose or relied upon by any other
person without our prior written consent. We consent to the use of our name
under the heading "Certain Federal Income Tax Consequences" in the Prospectus
Supplement. We hereby consent to the filing of this opinion with the Commission
as Exhibit 8.1 to the Registration Statement. In giving this consent, we do not
hereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Commission promulgated thereunder.
Very truly yours,
SONNENSCHEIN NATH & ROSENTHAL
/s/ Sonnenschein Nath & Rosenthal
11292609 v.2