Exhibit 12
[XXXXXXX XXXXXXX & XXXXXXXX]
February 12, 1996
Re: Agreement and Plan of Reorganization
dated as of February 9, 1996 between
Dreyfus Capital Value Fund, Inc. and
Xxxxxxxx Partners Funds, Inc.
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Dreyfus Capital Value Fund, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx Partners Funds, Inc.
00 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Ladies and Gentlemen:
You have requested our opinion with respect to the federal income tax
consequences of certain aspects of the proposed transfer by Dreyfus Capital
Value Fund, Inc. (the "Dreyfus Capital Value Fund")1/ of all of its assets to
Xxxxxxxx Partners Funds, Inc. ("CPF"), on behalf of the Xxxxxxxx Capital
Value Fund solely in exchange for shares of the Xxxxxxxx Capital Value Fund
and the assumption of all its
_____________________
1/ Where relevant, capitalized terms not otherwise defined herein have the
meanings they have for the purposes of the Agreement and Plan of
Reorganization dated as of February 9, 1996, between the Dreyfus Capital
Value Fund and CPF (the "Reorganization Agreement").
Dreyfus Capital Value -2- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
obligations and liabilities (as described in Section 2(a)(1) of the
Reorganization Agreement) followed by the liquidation of the Dreyfus Capital
Value Fund and the distribution pro rata of such Xxxxxxxx Capital Value Fund
shares to the shareholders of the Dreyfus Capital Value Fund. The series of
steps that will occur to effect such transaction are hereinafter referred to
as the "Reorganization". This opinion is being delivered pursuant to
Sections 7(d) and 8(e) of the Reorganization Agreement.
The Dreyfus Capital Value Fund is a Maryland corporation registered
under the Investment Company Act of 1940, as amended (the "Act"), as an
open-end diversified investment company of the management type.
The authorized capital stock of the Dreyfus Capital Value Fund consists
of 400,000,000 shares of Common Stock, each having a par value $.01 per
share. As of January 30, 1996, there were outstanding 23,958,332.788 Class A
shares, 7,754,335.065 Class B shares, 85,844.270 Class C shares, and 96.640
Class R shares of the Dreyfus Capital Value Fund, and no shares were held in
the treasury of the Dreyfus Capital Value Fund.
CPF is a Maryland corporation registered under the Act as an open-end
investment company of the management type.
The authorized capital stock of CPF consists of 1,000,000,000 shares of
Common Stock, each having a par value $.001 per share. As of January 30,
1996 there were
Dreyfus Capital Value -3- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
outstanding 6,208,911.200 Xxxxxxxx Partners Strategy Fund Class A shares,
17,349.093 Xxxxxxxx Partners Strategy Fund Class C shares, and 27,212,215.215
Xxxxxxxx Partners Strategy Fund Class O shares, and no shares were held in
the treasury of the Xxxxxxxx Partners Strategy Fund.
The Reorganization Agreement was approved by the Board of Directors of
CPF on January 30, 1996 and by the Board of Directors of the Dreyfus Capital
Value Fund on January 29, 1996.
Upon satisfaction of all conditions precedent set forth in the
Reorganization Agreement, the Reorganization will be effected as set forth in
the following summary:
1. Pursuant to the Reorganization Agreement, the Dreyfus Capital
Value Fund will convey, transfer and deliver to CPF, on behalf of the
Xxxxxxxx Capital Value Fund, and CPF, on behalf of the Xxxxxxxx Capital
Value Fund, shall acquire, at the closing (the "Closing") all of the
then existing assets of the Dreyfus Capital Value Fund. In consideration
thereof, CPF agrees at the Closing to cause the Xxxxxxxx Capital Value
Fund (i) to assume and pay, to the extent that they exist on or after the
Effective Time of the Reorganization, all of the obligations and
liabilities of the Dreyfus Capital Value Fund and (ii) to issue and
deliver to the Dreyfus Capital Value Fund full and fractional shares of
Class A, Class B, Class C and Class R shares of Common Stock, par value
Dreyfus Capital Value -4- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
$.001 per share, of the Xxxxxxxx Capital Value Fund, equal in net asset
value on the date of the exchange to the net asset value of full and
fractional outstanding shares of Class A, Class B, Class C and Class R
shares of Common Stock, par value $.01 per share, respectively, of the
Dreyfus Capital Value Fund. Any shares of capital stock of the Dreyfus
Capital Value Fund held in the treasury of the Dreyfus Capital Value Fund
at the Effective Time of the Reorganization shall thereupon be retired.
2. At the Effective Time of the Reorganization, the Dreyfus Capital
Value Fund will liquidate and distribute pro rata to the holders of its
shares as of the Effective Time of the Reorganization the shares of the
Xxxxxxxx Capital Value Fund received by the Dreyfus Capital Value Fund
pursuant to the Reorganization. Holders of Class A, Class B, Class C
and Class R shares of the Dreyfus Capital Value Fund will receive,
respectively, that number of Class A, Class B, Class C and Class R shares
of the Xxxxxxxx Capital Value Fund equal in net asset value at the date
of the exchange to the net asset value of such shareholder's shares of
the Dreyfus Capital Value Fund at such date. Such liquidation and
distribution will be accompanied by the establishment of an account on
the respective share records of the Xxxxxxxx Capital Value Fund in the
name of each record holder of shares of
Dreyfus Capital Value -5- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
the Dreyfus Capital Value Fund and representing the respective pro rata
number of shares of the Xxxxxxxx Capital Value Fund due such shareholder.
Fractional shares of the Xxxxxxxx Capital Value Fund will be carried to
the third decimal place. Simultaneously with such crediting of shares of
the Xxxxxxxx Capital Value Fund to the shareholders, the shares of the
Dreyfus Capital Value Fund held by such shareholders shall be cancelled.
3. Prior to the Effective Time of the Reorganization, the parties
to the Reorganization will file Articles of Transfer in the State of
Maryland to effect the Reorganization.
4. As soon as practicable after the Effective Time of the
Reorganization, the Dreyfus Capital Value Fund shall take all the
necessary steps under Maryland law and the Dreyfus Capital Value Fund's
Articles of Incorporation, as amended and supplemented, to effect a
complete dissolution of the Dreyfus Capital Value Fund and to deregister
the Dreyfus Capital Value Fund under the Act.
In acting as special counsel to CPF and the Dreyfus Capital Value Fund
with respect to the Reorganization, we have, among other things, reviewed the
following documents:
1. The Reorganization Agreement;
2. The proxy statement of CPF filed with the Securities and Exchange
Commission; and
Dreyfus Capital Value -6- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
3. CPF's Registration Statement on Form N-14 under the Securities Act
of 1933, as filed with the Securities and Exchange Commission (the
"Registration Statement on Form N-14").
For purposes of this opinion, as hereinafter set forth, we have reviewed
such other documents relating to the Reorganization as we have deemed relevant
under the circumstances and have relied upon representations contained in
certain certificates (the "Certificates") provided to us by the Dreyfus Capital
Value Fund and CPF.
If the Merger is effected on a factual basis different from that
contemplated above, any or all of the opinions expressed herein may be
inapplicable. Further, our opinion is based on (i) the Internal Revenue Code
of 1986, as amended (the "Code"), (ii) Treasury Regulations, (iii) judicial
precedents and (iv) administrative interpretations (including the current
ruling practice of the Internal Revenue Service) as of the date hereof. If
there is any subsequent change in the applicable law or regulations, or if
there are subsequently any new administrative or judicial interpretations of
the law or regulations, any or all of the individual opinions expressed
herein may become inapplicable.
Based on the foregoing, and assuming that the Reorganization is
effected in accordance with the terms of the Reorganization Agreement (and
exhibits thereto) and that the statements set forth in the Certificates are
true as of the
Dreyfus Capital Value -7- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
Effective Time of the Reorganization, it is our opinion that for federal
income tax purposes:
(i) the Reorganization will constitute a reorganization within the
meaning of section 368(a)(1) of the Code with respect to the Dreyfus
Capital Value Fund and the Xxxxxxxx Capital Value Fund;
(ii) no gain or loss will be recognized by the Dreyfus Capital Value
Fund or the Xxxxxxxx Capital Value Fund upon the transfer of all the
assets and liabilities, if any, of the Dreyfus Capital Value Fund to the
Xxxxxxxx Capital Value Fund solely in exchange for shares of the Xxxxxxxx
Capital Value Fund or upon the distribution of the shares of the Xxxxxxxx
Capital Value Fund to the holders of shares of the Dreyfus Capital Value
Fund solely in exchange for all of their shares of the Dreyfus Capital
Value Fund;
(iii) no gain or loss will be recognized by shareholders of the Dreyfus
Capital Value Fund upon the exchange of such shares of the Dreyfus Capital
Value Fund solely for shares of the Xxxxxxxx Capital Value Fund;
(iv) the holding period and tax basis of the shares of the Xxxxxxxx
Capital Value Fund received by each holder of shares of the Dreyfus
Capital Value Fund pursuant to the Reorganization will be the same as the
holding period and tax basis of shares of the Dreyfus Capital Value Fund
held by the shareholder (provided the
Dreyfus Capital Value -8- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
shares of the Dreyfus Capital Value Fund were held as a capital asset
on the date of the Reorganization) immediately prior to the
Reorganization; and
(v) the holding period and tax basis of the assets of the Dreyfus
Capital Value Fund acquired by the Xxxxxxxx Capital Value Fund will be
the same as the holding period and tax basis of those assets to the
Dreyfus Capital Value Fund immediately prior to the Reorganization.
The payment by the Dreyfus Corporation and Xxxxxxxx Partners, Inc. of
certain expenses of The Dreyfus Capital Value Fund and CPF which are directly
related to the Reorganization (referred to in section 10 of the
Reorganization Agreement) will not affect the opinions set forth above
regarding the federal income tax consequences of the exchanges by the Dreyfus
Capital Value Fund and the shareholders of the Dreyfus Capital Value Fund.
However, no opinion is expressed as to any other federal income tax
consequences to any of the parties resulting from the payment of such
expenses by The Dreyfus Corporation and Xxxxxxxx Partners, Inc.
We express our opinion herein only as to those matters specifically set
forth above and such opinion may be relied upon solely by you for the
exclusive purpose of ascertaining the federal income tax consequences of the
Reorganization contemplated in the Reorganization Agreement to
Dreyfus Capital Value -9- February 12, 1996
Fund, Inc.
Xxxxxxxx Partners Funds, Inc.
the Dreyfus Capital Value Fund, CPF and the shareholders of the Dreyfus
Capital Value Fund on their receipt of the Xxxxxxxx Capital Value Fund shares
pursuant to the Reorganization Agreement. We hereby consent to the filing of
this opinion as an exhibit to the Registration Statement on Form N-14 and to
the use of our name therein.
Very truly yours,
/s/ Xxxxxxx Xxxxxxx & Xxxxxxxx
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XXXXXXX XXXXXXX & XXXXXXXX
