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EXHIBIT 8.1
[FORM OF HOLLAND & XXXX LLP TAX OPINION]
November ___, 1997
Interenergy Corporation
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Gentlemen:
We refer to the Agreement and Plan of Merger dated as of August 25, 1997
(the "Merger Agreement") among K N Energy, Inc., a Kansas corporation
("Parent"), KN Acquisition Company, a Colorado corporation ("Acquisition Sub"),
and Interenergy Corporation, a Colorado corporation (the "Company"), which
provides for the merger (the "Merger") of Acquisition Sub with and into the
Company on the terms and conditions therein set forth, the time at which the
Merger becomes effective being hereinafter referred to as the "Effective Date."
Capitalized terms not defined herein have the meanings specified in the Merger
Agreement.
As provided in the Merger Agreement, at the Effective Date, by reason of
the Merger: (i) all outstanding shares of Company Common Stock then held in the
treasury of the Company will be canceled, and no capital stock of Parent, cash
or other consideration will be delivered in exchange therefor; (ii) each share
of capital stock of Acquisition Sub issued and outstanding immediately prior to
the Effective Date shall be converted into one share of common stock of the
Company; (iii) subject to the right of holders of Company Common Stock to
dissent from the Merger, each then outstanding share of Company Common Stock,
will be converted into a specified number of shares of Parent Common Stock;
(iv) subject to the right of holders of Company Series A Preferred to dissent
from the Merger, each then outstanding share of Company Series A Preferred,
will be converted into a specified number of shares of Parent Common Stock plus
an additional cash payment equal to the amount of properly declared, accrued
but unpaid dividends on the Company Series A Preferred; (v) subject to the
right of holders of Company Series B Preferred to dissent from the Merger, each
then issued and outstanding share of Company Series B Preferred will be
converted into and represent the right to receive a cash payment in an amount
equal to the sum of eight dollars and fifty cents ($8.50) plus the amount of
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properly declared, accrued but unpaid dividends on each such share of Company
Series B Preferred. Cash will be paid in lieu of fractional shares of Parent
Common Stock.
The Merger and the Merger Agreement are more fully described in Parent's
Registration Statement on Form S-4 (the "Registration Statement") relating to
the registration of shares of Parent Common Stock which has been filed by
Parent with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended. The Registration Statement includes the Proxy
Statement/Prospectus (the "Prospectus") of Parent and the Company.
In rendering the opinions expressed below, we have relied upon the
accuracy of the facts, information and representations and the completeness of
the covenants contained in the Merger Agreement, the Prospectus and such other
documents we have relied on as we have deemed relevant and necessary. Such
opinions are conditioned, among other things, not only upon such accuracy and
completeness of such items as of the date hereof, but also the continuing
accuracy and completeness thereof as of the Effective Date. Moreover, we have
assumed the absence of any change to any of such instruments between the date
hereof and the Effective Date.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons and the conformity with original documents of all copies submitted to
us for our examination. We have further assumed that: (i) the transactions
related to the Merger or contemplated by the Merger Agreement will be
consummated (A) in accordance with the Merger Agreement, and (B) as described
in the Prospectus; (ii) the Merger will qualify as a statutory merger under the
laws of the State of Colorado; and (iii) as of the date hereof, and as of the
Effective Date (as if made as of the Effective Date), the written statements
made by executives of Parent and the Company contained in the representation
letters delivered to us by Parent and the Company are true and accurate in all
material respects.
In rendering the opinions expressed below, we have considered the
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Regulations promulgated thereunder by the United States Treasury
Department (the "Regulations"), pertinent judicial authorities, rulings of the
Internal Revenue Service and such other authorities as we have considered
relevant. It should be noted that the Code, the Regulations and such judicial
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decisions, administrative interpretations and other authorities are subject to
change at any time and, in some circumstances, with retroactive effect; and any
such change could affect the opinions stated herein.
Based upon and subject to the foregoing, it is our opinion, as counsel
for the Company, that:
(i) The Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and the Company, Acquisition
Sub and Parent will each be a party to such reorganization within the meaning
of Section 368(b) of the Code;
(ii) No gain or loss will be recognized by Parent or the
Company as a result of the Merger;
(iii) No gain or loss will be recognized by the holders
of Company Common Stock or Company Series A Preferred upon their receipt of
Parent Common Stock pursuant to the Merger solely in exchange for their Company
Common Stock or Company Series A Preferred, except that gain or loss will be
recognized with respect to cash, if any, received in lieu of fractional shares
of Parent Common Stock;
(iv) The aggregate tax basis of the shares of Parent
Common Stock received in exchange for Company Common Stock or Company Series A
Preferred pursuant to the Merger (including fractional shares of Parent Common
Stock for which cash is received) will be the same as the aggregate tax basis
of the Company Common Stock or Series A Preferred exchanged therefor;
(v) The holding period of Parent Common Stock in the
hands of the former holders of Company Common Stock and Company Series A
Preferred will include the holding period of the Company Common Stock or
Company Series A Preferred exchanged therefor, provided such Company Common
Stock and Company Series A Preferred is held as a capital asset at the
Effective Date; and
(vi) A shareholder of the Company who receives cash in
lieu of a fractional share of Parent Common Stock will recognize gain or loss
equal to the difference, if any, between such shareholder's tax basis in such
fractional share (as described in clause (iv) above) and the amount of cash
received.
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Based solely upon and subject to the foregoing, it is also our opinion
that the statements under the caption "THE MERGER - Certain Material Federal
Income Tax Consequences" in the Prospectus, to the extent that they constitute
matters of law or legal conclusions, are correct in all material respects.
Except as expressly set forth in paragraphs (i) through (vi), inclusive,
and in the preceding paragraph, you have not requested, and we do not herein
express, any opinion concerning the tax consequences of, or any other matters
related to, the Merger.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances that may hereafter come to our attention with
respect to the opinions expressed above, including any changes in applicable
law that may hereafter occur.
The opinions expressed herein are being rendered at your request and for
your benefit and may not be relied on by any other person without our prior
written consent. Subject to the foregoing, we hereby consent to the filing of
this opinion as an exhibit to the Registration Statement on Form S-4 being filed
by Parent with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, in connection with the registration of shares of Parent
Common Stock to be issued in connection with the Merger.
Very truly yours,
