Drinker Biddle & Reath LLP One Logan Square
EXHIBIT 12
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
00xx xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
(000) 000-0000 (Phone)
(000) 000-0000 (Facsimile)
xxx.xxxxxxxxxxxxx.xxx
[ ], 2010
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
| Re: | Agreement and Plan of Reorganization by and between the Northern Funds Mid Cap Growth Fund (the “Transferor Fund”) and the Northern Multi-Manager Mid Cap Fund (the “Acquiror Fund”), each a Series of Northern Funds (“Northern”) |
Ladies and Gentlemen:
We have acted as counsel to the Transferor Fund and the Acquiror Fund (collectively, the “Funds”), each a series of Northern Funds, a Delaware statutory trust (the “Trust”), in connection with the transfer of all of the assets and liabilities of the Transferor Fund to the Acquiror Fund, followed by the distribution by the Transferor Fund to its shareholders of the Acquiror Fund shares (collectively, the “Reorganization”), pursuant to the Plan of Reorganization, dated December 14, 2009, adopted by the Trust and the Funds (the “Plan”). You have asked for our opinion as to certain Federal income tax consequences of the Reorganization. (All capitalized terms used but not otherwise defined in this letter shall have the meanings ascribed to them in the Plan.)
For purposes of this opinion, we have reviewed the Plan and such other documents and matters of law and fact as we have considered necessary or appropriate, and we have assumed, with your consent, the following:
(i) The Reorganization will be completed in the manner set forth in the Plan and in the Registration Statement on Form N-14 of the Trust, to which this opinion is filed as an exhibit (the “Registration Statement”), including the combined Proxy Statement/Prospectus of the Trust and the Funds contained therein (the “Proxy-Prospectus”).
(ii) The representations contained in the letter of representations from the Trust to us dated as of this date are true and complete.
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(iii) The Acquiror Fund will qualify as a “regulated investment company” under section 851 of the Internal Revenue Code of 1986, as amended (the “Code”) for the current taxable year.
On the basis of the foregoing, it is our opinion that:
| (1) | the Reorganization will constitute a “reorganization” within the meaning of section 368(a) of the Code, and each Fund will be a “party to a reorganization” within the meaning of section 368(b) of the Code; |
| (2) | the Transferor Fund will recognize no gain or loss (a) upon the transfer of its assets to the Acquiror Fund in exchange for Acquiror Fund shares and the assumption of the liabilities of the Transferor Fund, or (b) upon the distribution of those shares to the shareholders of the Transferor Fund; |
| (3) | the Acquiror Fund will recognize no gain or loss upon the receipt of the assets of the Transferor Fund in exchange for shares of the Acquiror Fund and the assumption of the liabilities of the Transferor Fund; |
| (4) | the tax basis in the hands of the Acquiror Fund of each asset of the Transferor Fund transferred to the Acquiror Fund in the Reorganization will be the same as the basis of that asset in the hands of the Transferor Fund immediately before the transfer; |
| (5) | the holding period in the hands of the Acquiror Fund of each asset of the Transferor Fund transferred to the Acquiror Fund in the Reorganization will include the period during which that asset was held by the Transferor Fund; |
| (6) | the shareholders of the Transferor Fund will recognize no gain or loss upon their receipt of shares of the Acquiror Fund; |
| (7) | the aggregate tax basis of the Acquiror Fund shares received by each shareholder of the Transferor Fund will equal the aggregate tax basis of the Transferor Fund shares surrendered by that shareholder in the Reorganization; |
| (8) | the holding periods of the Acquiror Fund shares received by each Transferor Fund shareholder will include the holding periods of the Transferor Fund shares surrendered by that shareholder in the Reorganization, provided that the Transferor Fund shares are held by that shareholder as capital assets on the date of the Reorganization; and |
| (9) | the Acquiror Fund will succeed to and take into account the tax attributes of the Transferor Fund described in section 381(c) of the Code, subject to the conditions |
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and limitations specified in sections 381, 382, 383 and 384 of the Code and the Treasury Regulations thereunder.
This opinion represents our best legal judgment, but it has no binding effect or official status of any kind, and no assurance can be given that contrary positions may not be taken by the Internal Revenue Service or a court concerning the issues. We express no opinion relating to any Federal income tax matter except on the basis of the facts described above, and any changes in such facts could require a reconsideration and modification of such opinion. We also express no opinion regarding tax consequences under foreign, state or local laws. In issuing our opinion, we have relied solely upon existing provisions of the Code, existing and proposed regulations thereunder, and current administrative positions and judicial decisions. Such laws, regulations, administrative positions and judicial decisions are subject to change at any time. Any such changes could affect the validity of the opinion set forth above. Also, future changes in Federal income tax laws and the interpretation thereof can have retroactive effect.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading “INFORMATION ABOUT THE REORGANIZATION – Federal Income Tax Consequences” in the Proxy-Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933.
| Very truly yours, |
| [ ] |
| DRINKER XXXXXX & XXXXX LLP |
