Eighteenth and Arch Streets Philadelphia, PA 19103-2799
Exhibit
8.1
3000 Two
Xxxxx Square
Eighteenth
and Xxxx Xxxxxxx
Xxxxxxxxxxxx,
XX 00000-0000
000.000.0000
Fax
000.000.0000
February
10, 2009
|
000
Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
|
Ladies
and Gentlemen:
Pursuant
to the Agreement and Plan of Merger, dated as of December 5, 2008 (the
“Agreement”), by and among Penseco Financial Services Corporation, a
Pennsylvania corporation (“Penseco”), Penn Security Bank and Trust Company, a
Pennsylvania commercial bank and trust company and direct wholly-owned
subsidiary of Penseco (“Penn Security”), and Old Forge Bank, a Pennsylvania
commercial bank (“Old Forge”), a newly-formed interim Pennsylvania
commercial bank and direct wholly-owned subsidiary of Penseco (“Merger Sub”) is
to merge with and into Old Forge and immediately thereafter Old Forge is to
merge with and into Penn Security (the two mergers together, the
“Merger”). Capitalized terms not otherwise defined in this opinion
have the meanings ascribed to such terms in the Agreement.
We have
acted as legal counsel to Penseco in connection with the Merger. We
are delivering this opinion in connection with the filing by Penseco, with the
Securities and Exchange Commission (the “SEC”), of Penseco’s Form S-4 (the
“Registration Statement”) and the proxy statement/prospectus included therein
(the Proxy Statement/Prospectus”). For the purpose of rendering our
opinion, we have examined and are relying, with your permission (without any
independent investigation or review thereof other than such investigation and
review as we have deemed necessary to comply with our professional obligations
under IRS Circular 230 or otherwise), upon the truth and accuracy, at all
relevant times, of the statements, covenants, representations and warranties
contained in the following documents (the “Documents”):
1. The
Agreement;
2. The
Registration Statement and the Proxy Statement/Prospectus;
3. The
representations made to us by Penseco and Penn Security in their letter to us
dated the date hereof;
4. The
representations made to us by Old Forge in its letter to us dated the date
hereof; and
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February
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5. Such
other instruments and documents related to the formation, organization and
operation of Penseco, Penn Security, Merger Sub and Old Forge and to the
consummation of the Merger as we have deemed necessary or appropriate for
purposes of our opinion.
For
purposes of this opinion, we have assumed, with your permission and without
independent investigation (other than such investigation as we have deemed
necessary to comply with our professional obligations under IRS Circular 230 or
otherwise), (i) that the Merger will be consummated in the manner contemplated
by the Proxy Statement/Prospectus and in accordance with the provisions of the
Agreement without the waiver of any conditions to any party’s obligation to
effect the Merger, (ii) that original documents (including signatures) are
authentic, (iii) that documents submitted to us as copies conform to the
original documents, (iv) that there has been (or will be by the date of the
Merger) due execution and delivery of all documents where due execution and
delivery are prerequisites to the effectiveness of those documents, (v) that the
statements and representations contained in the Documents are accurate and will
continue to be accurate at all relevant times, (vi) that covenants and
warranties set forth in the Documents will be complied with and (vii) that the
Merger will be effective under applicable law.
Furthermore,
we have assumed, with your permission and without independent investigation
(other than such investigation as we have deemed necessary to comply with our
professional obligations under IRS Circular 230 or otherwise), that, as to all
matters in which a person or entity making a representation has represented that
such person or entity or a related party is not a party to, does not have, or is
not aware of, any plan, intention, understanding or agreement to take action,
there is in fact no plan, intention, understanding or agreement and such action
will not be taken, and we have further assumed that any statement made “to the
knowledge of” or otherwise similarly qualified is correct without such
qualification.
Subject
to the foregoing and any other assumptions, limitations and qualifications
specified herein, it is our opinion that: (i) the Merger will qualify
as a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the “Code”); and (ii) the discussion set forth in the
Proxy Statement/Prospectus under the section captioned “Material United States
Federal Income Tax Consequences of the Merger” constitutes a fair and accurate
summary of the material United States federal income tax consequences of the
Merger to U.S. holders of Old Forge Common Stock.
Our
opinion expressed herein is based upon the Code, regulations promulgated
thereunder, administrative pronouncements and judicial authority, all as in
effect as of the date hereof. It represents our best legal judgment
as to the matters addressed herein but is not binding on the Internal Revenue
Service or the courts. Accordingly, no assurance can be given that
the Internal Revenue Service would agree with the opinion expressed herein or,
if contested, the opinion would be sustained by a court. Furthermore,
the authorities upon which we rely may be changed
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February
10, 2009
at any
time, potentially with retroactive effect. No assurances can be given
as to the effect of any such changes on the conclusions expressed in this
opinion. We undertake no responsibility to advise you of any new
developments in the application or interpretation of relevant federal tax
laws. If any of the facts or assumptions pertinent to the U.S.
federal income tax treatment of the Merger specified herein or any of the
statements, covenants, representations or warranties contained in the Documents
are, or later become, inaccurate, such inaccuracy may adversely affect the
conclusions expressed in this opinion. In addition, our opinion is
limited to the tax matters specifically covered hereby, and we have not been
asked to address, nor have we addressed, any other tax consequences of the
Merger or any other transactions.
This
opinion is being provided solely for the benefit of Penseco. No other
person or party shall be entitled to rely on this opinion. We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to us in the section captioned “Material United
States Federal Income Tax Consequences of the Merger” therein. In
giving this consent, we do not hereby admit that we come 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 SEC thereunder.
