Writer's Direct Dial No:
December 18, 2002 402.636.8312
Writer's Direct Dial Fax:
402.231.8554
E-Mail Address:
msullivan@bairdholm.com
Oregon Trail Ethanol Coalition, L.L.C.
Box 267
Davenport, Nebraska 68335
Re: Oregon Trail Ethanol Coalition, L.L.C.
Dear Sir or Madam:
We have acted as legal counsel to Oregon Trail Ethanol Coalition, L.L.C., a
Nebraska limited liability company (the "Company"), in connection with its
offering of Limited Liability Company Member Units. 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 Form SB-2
Registration Statement dated July 31,2002, as amended, relating to that offering
(the "Registration Statement").
We are rendering this opinion to the Company. The tax consequences of
owning units in the Company are dependent on matters of fact, including the
individual circumstances of investors. These facts have not been considered by
and are not known by us; consequently, such individual tax consequences are not
addressed by this opinion; and investors are urged to consult with their own tax
advisors prior to investing. The Company may not deliver or otherwise use this
opinion without the express written consent of Baird, Holm, McEachen, Pedersen,
Hamann & Strasheim LLP.
We are assuming that the offering will be completed, that events will occur
and that the operations of the limited liability company will be conducted in a
manner described in the Registration Statement. We have examined the
Registration Statement and such other documents as we have deemed necessary to
render the opinion expressed below.
December 18, 2002
Page 2
Based upon and subject to the assumptions and qualifications set forth
herein, we are of the opinion that:
1. Reasonable basis, as defined in Section 6662 of the Internal Revenue
Code and the Treasury Regulations promulgated thereunder, exists to
treat the Company as a partnership for federal income tax purposes.
Based on IRS Regulation ss.1.6662-3(b)(3), reasonable basis is a
relatively high standard of tax reporting, that is, significantly
higher than not frivolous or not patently improper. The reasonable
basis standard is not satisfied by a return position that is merely
arguable or a colorable claim. To have a reasonable basis, the return
position mst be based upon appropriate authorities taking into account
the relevance and persuasiveness of the authorities and subsequent
developments.
2. The discussion of possible tax consequences contained in the
Registration Statement under the heading "Income Tax Considerations of
Owning Our Membership Units" is an accurate general description of the
principal federal income tax consequences that may arise from the
ownership and disposition of the units.
The foregoing opinion is qualified in the following respects:
A. The federal tax consequences described in the Registration Statement
relate primarily to individual citizens and residents of the United
States and may have limited applicability to corporations, trusts,
estates, tax exempt organizations, insurance companies, financial
institutions, foreign taxpayers and broker dealers.
B. The opinion expressed in Paragraph 1 above addresses the taxability of
the Company as a partnership for federal income tax purposes.
Paragraph 1 does not address the individual tax consequences of owning
units in the Company and Paragraph 2 addresses matters of law only.
The actual tax consequences associated with owning units in the
Company are dependent on matters of fact, including the individual
circumstances of investors that we are not aware of nor have we
considered. Therefore, investors are urged to consult with their own
tax advisor prior to making their investment decision, because their
own unique facts and circumstances are not covered by this opinion.
C. We express no opinion as to the effect, if any, of state or local
laws, regulations, rules or judicial decisions.
December 18, 2002
Page 3
D. We express no opinions, except as specifically set forth in the
numbered paragraphs above, and no opinions as to any other matter
shall be deemed to be implied by or may be inferred from any of the
numbered paragraphs set forth above.
E. The opinion expressed herein is based on existing law as published and
contained in the Internal Revenue Code, the Treasury Regulations,
administrative rulings and court decisions as of the date hereof.
F. No rulings have been requested from the Internal Revenue Service
concerning the opinion expressed herein. Accordingly, the Internal
Revenue Service or a court may disagree with the opinion expressed
herein. Therefore, the opinion expressed herein will not assure the
intended tax consequences nor will it bind the Internal Revenue
Service or the courts.
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.
Very truly yours,
BAIRD, HOLM, MCEACHEN, PEDERSEN,
HAMANN & STRASHEIM LLP
By: _______________________________
Michael L. Sullivan, Partner
MLS/mht