EXHIBIT 99.23(i)
December 28, 2000
Potomac Funds
1311 Mamaroneck Avenue
White Plains, New York 10605
Ladies and Gentlemen:
You have requested our opinion, as to certain matters regarding the
issuance by Potomac Funds (the "Trust"), regarding the issuance of Shares of the
Trust in connection with the filing of Post-Effective Amendment No. 6 to its
Registration Statement on Form N-1A ("PEA No. 6"). As used in this letter, the
term "Shares" means the Investor Class, Advisor Class and Broker Class shares of
beneficial interest of the following series of the Trust: Potomac U.S. Plus
Fund; Potomac U.S./Short Fund; Potomac OTC Plus Fund; Potomac OTC/Short Fund;
Potomac Dow 30 Plus Fund; Potomac Dow 30/Short Fund; Potomac Small Cap Plus
Fund; Potomac Small Cap/Short Fund; Potomac Internet Plus Fund; Potomac
Internet/Short Fund; Potomac Japan Plus Fund; Potomac Japan/Short Fund and
Potomac U.S. Government Money Market Fund.
As such counsel, we have examined certified or other copies, believed
by us to be genuine, of the Trust's Declaration of Trust and by-laws and such
resolutions and minutes of meetings of the Trust's Board of Trustees as we have
deemed relevant to our opinion, as set forth herein. Our opinion is limited to
the laws and facts in existence on the date hereof, and it is further limited to
the laws (other than the conflict of law rules) in the Commonwealth of
Massachusetts that in our experience are normally applicable to the issuance of
shares by unincorporated voluntary associations and to the Securities Act of
1933 ("1933 Act"), the Investment Company Act of 1940 ("1940 Act") and the
regulations of the Securities and Exchange Commission ("SEC") thereunder.
Based on present laws and facts, we are of the opinion that the
issuance of the Shares has been duly authorized by the Trust and that, when sold
in accordance with the terms contemplated by the PEA No. 6, including receipt by
the Trust of full payment for the Shares and compliance with the 1933 Act and
the 1940 Act, the Shares will have been validly issued, fully paid and
non-assessable.
We note, however, that the Trust is an entity of the type commonly
known as a "Massachusetts business trust." Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. The Declaration of Trust states that all persons
extending credit to, contracting with or having any claim against the Trust or
the Trustees shall look only to the assets of the Trust for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of their agents, whether past, present or future, shall be personally liable
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Potomac Funds
December 28, 2000
Page 2
therefor. It also requires that every note, bond, contract or other undertaking
issued by or on behalf of the Trust or the Trustees relating to the Trust shall
include a recitation limiting the obligation represented thereby to the Trust
and its assets. The Declaration of Trust further provides: (1) for
indemnification from the assets of the Trust for all loss and expense of any
shareholder held personally liable for the obligations of the Trust by virtue of
ownership of shares of the Trust; and (2) for the Trust to assume the defense of
any claim against the shareholder for any act or obligation of the Trust. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust or series would be
unable to meet its obligations.
We hereby consent to this opinion accompanying the PEA when it is filed
with the SEC and to the reference to our firm in the PEA.
Very truly yours,
/s/ Kirkpatrick & Lockhart LLP
KIRKPATRICK & LOCKHART LLP
