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Exhibit 8.1
[O'MELVENY & MEYERS LLP LETTERHEAD]
OUR FILE NUMBER
319,440-054
June 15, 2000
Golf Trust of America, Inc.
14 North Adger's Wharf
Charleston, South Carolina 29401
RE: CERTAIN FEDERAL INCOME TAX MATTERS
Ladies and Gentlemen:
We have acted as counsel to Golf Trust of America, Inc., a Maryland
corporation (the "Company"), in connection with the preparation of a Form S-3
registration statement (the "Registration Statement") to be filed with the
Securities and Exchange Commission ("SEC") on or around the date hereof,
relating to the sale by certain selling shareholders of 800,000 shares of the
Company's 9.25% Series A Cumulative Convertible preferred stock (the "Series A
preferred stock") and the shares of the Company's sole class of common stock,
par value $0.01 per share ("Common Stock") issuable upon conversion of the
Series A preferred stock (equal to 761,904 shares plus such currently
indeterminate number of additional shares of Common Stock as may be issuable
upon conversion as a result of adjustments to the conversion price) (the
"Underlying Common Stock") and the attached rights to purchase shares of Series
B Junior Participating Preferred Stock, par value $.01 per share, which are
attached to all shares of Common Stock outstanding on or issued after September
6, 1999 pursuant to the Company's Shareholder Rights Plan (the "Rights" and,
together with the Series A Preferred Stock and the Underlying Common Stock, the
"Securities"). You have requested our opinion regarding certain U.S. Federal
income tax matters in connection with such filing. Capitalized terms used, but
not otherwise defined, herein shall have the meanings ascribed to such terms in
the Registration Statement.
In giving the opinions set forth herein, we have examined the
following: (i) the Company's Articles of Incorporation and Articles of Amendment
and Restatement, as amended, and Bylaws, as amended; (ii) the Articles of
Incorporation and Bylaws, as amended, of the Company's wholly-owned
subsidiaries; (iii) the First Amended and Restated Agreement of Limited
Partnership, dated February 12, 1997, as amended by the First Amendment thereto,
dated February 1, 1998, and as updated by the general partner through the date
hereof (the "Operating Partnership Agreement") of Golf Trust of America, L.P.
(the "Operating Partnership"), in which one of the Company's subsidiaries is a
general partner and the other, a limited partner; (iv) the leases between the
Operating Partnership and the lessees of various golf
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Golf Trust of America, Inc., June 15, 2000 - Page 2
courses owned by the Operating Partnership; (v) the participating mortgage loan
relating to one of the golf courses, and (vi) such other documents as we have
deemed necessary or appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have assumed, with
your consent, that:
1. each of the documents referred to above has been duly authorized,
executed, and delivered; is authentic, if an original, or is accurate, if a
copy; and has not been amended except as is set forth above;
2. during its short taxable year ending December 31, 1997 and its
taxable years ending December 31, 1998 and December 31, 1999, the Company has
operated, and during its subsequent taxable years will continue to operate, in
such a manner that will make the representations contained in a certificate,
dated the date hereof and executed by a duly appointed officer of the Company
(the "Officer's Certificate"), true for such years;
3. the Company will not make any amendments to its organizational
documents or the Operating Partnership Agreement after the date of this opinion
that would affect its qualification as a real estate investment trust (a "REIT")
for any taxable year;
4. each partner (each, a "Partner") of the Operating Partnership that
is a corporation or other entity has a valid legal existence;
5. each Partner has full power, authority, and legal right to enter
into and to perform the terms of the Operating Partnership Agreement and the
transactions contemplated thereby; and
6. no action will be taken by the Company, the Operating Partnership or
the Partners after the date hereof that would have the effect of altering the
facts upon which the opinions set forth below are based.
In connection with the opinions rendered below, we also have relied
upon the correctness of the representations contained in the Officer's
Certificate and we have no reason to believe such reliance is not reasonable.
For purposes of our opinions, we made no independent investigation of the facts
contained in the documents and assumptions set forth above, the representations
set forth in the Officer's Certificate, or the Registration Statement.
Consequently, we have relied on the Company's representations that the
information presented in such documents, or otherwise furnished to us,
accurately and completely describes all material facts relevant to our opinions.
No facts have come to our attention, however, that would cause us to question
the accuracy and completeness of such facts or documents in a material way.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussion in
the Registration Statement under the caption "Federal Income Tax Considerations"
(which is incorporated herein by reference), we are of the opinion that:
(a) the Company has qualified as a REIT for its taxable years
ending December 31, 1997, December 31, 1998 and December 31, 1999, and the
Company's organization and method of operation will enable it to continue to
qualify in the future to be taxed as a REIT pursuant to Sections 856 through 860
of the Internal Revenue Code of 1986, as amended (the "Code");
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Golf Trust of America, Inc., June 15, 2000 - Page 3
(b) the descriptions of the law and the legal conclusions
contained in the Registration Statement under the caption "Federal Income Tax
Considerations" are correct in all material respects, and the discussion
thereunder fairly summarizes the federal income tax considerations that are
likely to be material to a holder of the Common Stock; and
(c) the Operating Partnership will be treated for federal
income tax purposes as a partnership and not as a corporation or association
taxable as a corporation or as a publicly traded partnership.
We will not review on a continuing basis the Company's compliance with
the documents or assumptions set forth above, or the representations set forth
in the Officer's Certificate. Accordingly, no assurance can be given that the
actual results of the Company's operations for its 2000 and subsequent taxable
years will satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and
the Treasury regulations thereunder (the "Regulations"), published
administrative interpretations thereof, and published court decisions. The
Internal Revenue Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to REIT
qualification. No assurance can be given that the law will not change in a way
that will prevent the Company from qualifying as a REIT.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to O'Melveny & Myers
LLP under the caption "Federal Income Tax Considerations" in the Registration
Statement. In giving this consent, we do not admit that we are in the category
of persons whose consent is required by Section 7 of the 1933 Act or the rules
and regulations promulgated thereunder by the SEC.
The foregoing opinions are limited to the U.S. federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressees and their respective
counsel, and it may not be distributed, relied upon for any purpose by any other
person, quoted in whole or in part or otherwise reproduced in any document, or
filed with any governmental agency without our express written consent.
Respectfully submitted,
/s/ O'MELVENY & MYERS LLP
O'MELVENY & MYERS LLP
