EXHIBIT (12)
DECHERT PRICE & RHOADS
Ten Post Office Square, South
Boston, Massachusetts 02109
(617) 728-7100
(617) 426-6567 (fax no.)
June 28, 2000
Ivy Fund
in respect of
Ivy Growth with Income Fund
and
Ivy US Blue Chip Fund
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, FL 33432
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences to Ivy Growth with Income Fund ("Target"), a separate series of Ivy
Fund (the "Trust"), to the holders of the shares of beneficial interest (the
"shares") of Target (the "Target shareholders"), and to Ivy US Blue Chip Fund
("Acquiring Fund"), also a separate series of the Trust, in connection with the
proposed transfer of substantially all of the assets of Target to Acquiring Fund
in exchange solely for voting shares of beneficial interest of Acquiring Fund
("Acquiring Fund shares"), followed by the distribution of such Acquiring Fund
shares received by Target in complete liquidation, all pursuant to the Agreement
and Plan of Reorganization (the "Plan") dated April 17, 2000 (the
"Reorganization").
For purposes of this opinion, we have examined and rely upon (1) the
Plan, (2) the Form N-14, filed by the Trust on April 21, 2000, with the
Securities and Exchange Commission, (3) the facts and representations contained
in the letter dated June 28, 2000, addressed to us from the Trust on behalf of
Target, (4) the facts and representations contained in the letter dated June 28,
2000, addressed to us from the Trust on behalf of Acquiring Fund, and (5) such
other documents and instruments as we have deemed necessary or appropriate for
purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), United States Treasury regulations, judicial decisions and
administrative rulings and pronouncements of the Internal Revenue Service, all
as in effect on the date hereof. This opinion is conditioned upon the
Reorganization taking place in the manner described in the Plan and the Form
N-14 referred to above.
Based upon the foregoing, it is our opinion that:
(1) The acquisition by Acquiring Fund of substantially all of the
assets of Target in exchange solely for Acquiring Fund shares, followed by the
distribution of such Acquiring Fund shares to the Target shareholders in
exchange for their Target shares in complete liquidation of Target, will
constitute a reorganization within the meaning of Section 368(a) of the Code.
Acquiring Fund and Target will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized to Target upon the transfer of
substantially all of its assets to Acquiring Fund in exchange solely for
Acquiring Fund shares, or upon the distribution to the Target shareholders of
the Acquiring Fund shares.
(3) No gain or loss will be recognized by Acquiring Fund upon the
receipt of Target's assets in exchange for Acquiring Fund shares.
(4) The basis of the assets of Target in the hands of Acquiring Fund
will be, in each instance, the same as the basis of those assets in the hands of
Target immediately prior to the Reorganization exchange.
(5) The holding period of Target's assets in the hands of Acquiring
Fund will include the period during which the assets were held by Target.
(6) No gain or loss will be recognized to the Target shareholders upon
the receipt of Acquiring Fund shares solely in exchange for Target shares.
(7) The basis of the Acquiring Fund shares received by the Target
shareholders will be the same as the basis of the Target shares surrendered in
exchange therefor.
(8) The holding period of the Acquiring Fund shares received by the
Target shareholders will include the holding period of the Target shares
surrendered in exchange therefor, provided that such Target shares were held as
capital assets in the hands of the Target shareholders upon the date of the
exchange.
We express no opinion as to the federal income tax consequences of the
Reorganization except as expressly set forth above, or as to any transaction
except those consummated in accordance with the Plan.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form N-14 to be filed by the Trust with the Securities
and Exchange Commission.
Very truly yours,
/s/DECHERT PRICE & RHOADS
