EXHIBIT 8.2
May 21, 1998
The Company Doctor
0000 Xxxxx X'Xxxxxx, Xxxxx 0000
Irving, Texas 75039
Ladies and Gentlemen:
This opinion is being delivered to you in accordance with Section 9.3(c) of
the Plan and Agreement of Merger (the "Merger Agreement") executed as of
December 16, 1997, and amended March 16, 1998, by and among HEALTHSOUTH
Corporation, a Delaware corporation ("HEALTHSOUTH"), Xxxxxxxx Acquisition
Corporation, a Delaware corporation ("Subsidiary"), and The Company Doctor, a
Delaware corporation ("TCD"). Pursuant to the Merger Agreement, and as of the
Effective Time specified in the Merger Agreement, Subsidiary will merge with and
into TCD. Immediately thereafter, each issued and outstanding share of TCD
Common Stock will be converted into the right to receive shares of HEALTHSOUTH
Common Stock. For purposes hereof, these transactions shall be referred to in
the aggregate as the "Merger."
Except as otherwise provided, capitalized terms referred to herein have the
meanings set forth in the Merger Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the
"Code").
For the purpose of rendering our opinion, we have examined the following
documents:
(i) The Merger Agreement; and
(ii) Letters provided by HEALTHSOUTH and TCD containing certain
representations of HEALTHSOUTH and TCD, and attached hereto as Exhibit 1
(the "Representation Letter"); and
(iii) Such other instruments and documents related to the formation,
organization and operation of HEALTHSOUTH, Subsidiary and TCD and related
to the consummation of the Merger and the transactions contemplated
thereby as we have deemed necessary or appropriate.
Based on our examination of the foregoing items and subject to (a) the
completion of the proceedings being taken or contemplated to be taken pursuant
to the Merger Agreement and (b) the limitations, qualifications, assumptions and
covenants set forth at the end of this opinion, we are of the opinion that, for
federal income tax purposes, the following federal income tax consequences (the
"Consequences") will result:
1. The Merger constitutes a reorganization within the meaning of Section
368(a)(1)(A);
2. Pursuant to Section 361(a), no gain or loss will be recognized by TCD
upon the Merger of Subsidiary with and into TCD;
3. Pursuant to Section 354(a), no gain or loss will be recognized by the
shareholders of TCD upon the receipt in the Merger of HEALTHSOUTH Common
Stock in exchange for their shares of TCD Common Stock;
4. Pursuant to Section 358, the aggregate basis of the HEALTHSOUTH Common
Stock received by each shareholder of TCD in the Merger will be equal to the
aggregate basis of the TCD Common Stock exchanged therefor;
5. Pursuant to Section 1223(1), the holding period for each share of
HEALTHSOUTH Common Stock received by each shareholder of TCD in exchange for
TCD Common Stock will include the period for which such shareholder held the
TCD Common Stock exchanged therefor, provided such share of TCD Common Stock
is a capital asset in the hands of such TCD shareholder as of the Effective
Time;
6. Payment received by a TCD shareholder in lieu of a fractional share of
HEALTHSOUTH Common Stock will be treated as payment in redemption of such
fractional share and will result in the recognition of capital gain or
capital loss measured by the difference between the amount of such payment
and such shareholder's basis in such fractional share, provided that such
fractional share is a capital asset in the hands of such shareholder on the
Merger Date and that such payment is neither essentially equivalent to a
dividend nor has the effect of a distribution of a dividend.
In connection with rendering this opinion, we have assumed, without any
independent investigation or review thereof, the following:
(a) The genuineness of all signatures on, and the authenticity of,
original documents, the conformity to original documents of all documents
submitted to us as copies, and the genuineness of all signatures and the due
execution and delivery of all documents;
(b) That the Merger is effective under the laws of the State of Delaware;
and
(c) The truth and accuracy, at all relevant times, of all
representations, warranties, and statements made by HEALTHSOUTH, Subsidiary
and TCD and their shareholders in connection with the Merger, including those
set forth in the Merger Agreement.
In addition to the limitations set forth above, this opinion is subject to
the following limitations, qualifications and caveats:
1. In preparing this opinion, we relied upon the representations,
warranties, and statements made by HEALTHSOUTH and TCD in the Representation
Letter, as well as certain assumptions identified herein. If any of these
representations, warranties, statements, and assumptions upon which we have
relied are not true and accurate at all relevant times, our opinion might be
adversely affected and may not be relied upon.
2. This opinion only addresses certain federal income tax consequences of
the Merger and does not address the various state, local or foreign tax
consequences that may result from the Merger.
3. No opinion is expressed as to any federal income tax consequence of
the Merger except as specifically set forth herein and this opinion may not
be relied upon except with respect to the Consequences. In particular, we
express no opinion regarding, among other things: (a) whether any TCD
shareholder who has provided or will provide services to HEALTHSOUTH or TCD
will have compensation income under any provision of the Code; (b) the effect
of such compensation income on the basis and holding period of HEALTHSOUTH
Common Stock received by any such shareholder in the Merger; (c) the
potential application of the "golden parachute" provisions of the Code
(Sections 280G, 3121(v) (2) and 4999); (d) the potential application of the
"disqualifying disposition" rules of Section 425 to dispositions of
HEALTHSOUTH Common Stock or TCD Common Stock; and (e) the amount, existence,
and/or availability, after the Merger, of any of the federal income tax
attributes of TCD after application of any provision of the Code, as well as
the regulations promulgated thereunder and judicial interpretations thereof.
4. No opinion is expressed as to any transaction other than the Merger as
described in the Agreement or as to any transaction whatsoever if all the
transactions described in the Agreement are not consummated in accordance
with the terms of such Agreement and without waiver of any material provision
thereof.
5. This opinion only represents our best judgment as to the Consequences
and is not binding on the Internal Revenue Service or the courts. The
conclusions are based on the Code, existing judicial decisions,
administrative regulations and published rulings. No assurance can be given
that future legislative, judicial or administrative changes would not
adversely affect the accuracy of the conclusions stated herein. Nevertheless,
by rendering this opinion, we undertake no responsibility to advise you of
any new developments in the application or interpretation of the federal
income tax laws.
6. This opinion has been delivered to you for the purposes set forth in
Section 9.3 of the Merger Agreement and may not be relied upon for any other
purpose or by any other person or entity (with the exception of TCD and its
shareholders), and may not be made available to any other person or entity
without our prior written consent.
Very truly yours,
Berliner Xxxxxx Xxxxxx & Xxxxxxxx
