MORGAN STANLEY GROUP INC /DE/
8-K, 1996-05-13
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES
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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 8-K

                                CURRENT REPORT



                       Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported):  May 9, 1996



                           MORGAN STANLEY GROUP INC.
            (Exact name of registrant as specified in its charter)



         Delaware                     1-9085                 13-2838811
 (State or other jurisdiction       (Commission             (IRS Employer
      of incorporation)             File Number)          Identification No.)


                    1585 Broadway, New York, New York 10036
          (Address of principal executive offices including zip code)


      Registrant's telephone number, including area code: (212) 761-4000

==============================================================================
Item 7(c).  Exhibits
            --------

8.9            Tax Opinion of Davis Polk & Wardwell, dated April 22, 1996,
               relating to the registrant's Exchangeable Notes due April 30,
               2002, exchangeable for shares of common stock of the Federal
               National Mortgage Association and shares of common stock of the
               Student Loan Marketing Association, as described in Pricing
               Supplement No. 71 dated March 15, 1996 to the Prospectus
               Supplement dated March 29, 1995 and the Prospectus dated March
               29, 1995 related to Registration Statement No. 33-57833.

8.10           Tax Opinion of Davis Polk & Wardwell, dated May 6, 1996,
               relating to the registrant's Senior Fixed Rate Notes due May 7,
               2001, as described in Pricing Supplement No. 72 dated May 6,
               1996 to the Prospectus Supplement dated March 29, 1995 and the
               Prospectus dated March 29, 1995 related to Registration
               Statement No. 33-57833.

8.11           Tax Opinion of Davis Polk & Wardwell, dated May 6, 1996,
               relating to the registrant's Senior Fixed Rate Notes due May
               15, 2001, as described in Pricing Supplement No. 74 dated May
               6, 1996 to the Prospectus Supplement dated March 29, 1995 and
               the Prospectus dated March 29, 1995 related to Registration
               Statement No. 33-57833.


                                SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                             MORGAN STANLEY GROUP INC.
                                             Registrant

                                             /s/ Patricia A. Kurtz
                                             --------------------------
                                             Patricia A. Kurtz
                                             Assistant Secretary


Date:    May 9, 1996


                               Index to Exhibits


Exhibit No.                      Description
- ----------                       -----------

8.9            Tax Opinion of Davis Polk & Wardwell,
               dated April 22, 1996, relating to
               the registrant's Exchangeable Notes
               due April 30, 2002, exchangeable for
               shares of common stock of the Federal
               National Mortgage Association and
               shares of common stock of the
               Student Loan Marketing Association,
               as described in Pricing Supplement
               No. 71 dated March 15, 1996 to the
               Prospectus Supplement dated March 29,
               1995 and the Prospectus dated
               March 29, 1995 related to Registration
               Statement No. 33-57833.


8.10           Tax Opinion of Davis Polk & Wardwell,
               dated May 6, 1996, relating to the
               registrant's Senior FixedRate
               Notes due May 7, 2001, as described
               in Pricing Supplement No. 72 dated
               May 6, 1996 to the Prospectus
               Supplement dated March 29, 1995
               and the Prospectus dated March 29,
               1995 related to Registration
               Statement No. 33-57833.


8.11           Tax Opinion of Davis Polk & Wardwell,
               dated May 6, 1996, relating to the
               registrant's Senior Fixed Rate
               Notes due May 15, 2001, as described in
               Pricing Supplement No. 74 dated May 6, 1996
               to the Prospectus Supplement dated March
               29, 1995 and the Prospectus
               dated March 29, 1995 related to
               Registration Statement No. 33-57833.

                                                                  Exhibit 8.9

                           DAVIS POLK & WARDWELL
                           450 LEXINGTON AVENUE
                           NEW YORK, NEW YORK 10017


                              (212) 450-4571


                                                               April 22, 1996

Morgan Stanley Group Inc.
1585 Broadway
New York, NY 10036

         Re:  Morgan Stanley Group Inc.
              Exchangeable Notes Due April 30, 2002
              -------------------------------------
Dear Sirs:

         We have acted as special tax counsel for you in connection with the
issuance of your $26,000,000 aggregate principal amount Exchangeable Notes
(the "Notes") due April 30, 2002, exchangeable for shares of common stock of
the Federal National Mortgage Association and shares of common stock of the
Student Loan Marketing Association (collectively, the "Basket Stocks" and each
individually a "Basket Stock").  In our opinion, the discussion set forth
below is a summary of the material U.S. federal income tax considerations that
are generally relevant to holders of the Notes.  The summary is based on tax
laws in effect as of the date hereof, which are subject to change by
legislative, judicial or regulatory action that in some cases may have
retroactive effect.  This summary does not address all of the tax
considerations that may be relevant to a holder in light of such holder's
particular circumstances.  In particular, this summary addresses only persons
who hold Notes as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986 (the "Code"), and does not deal with persons
subject to special rules, such as foreign persons, certain financial
institutions, insurance companies, dealers in options or securities or
purchasers holding Notes as a part of a hedging transaction or straddle or as
part of a "synthetic security" or other integrated investments.  This summary
also does not deal with holders other than initial holders of the Notes who
purchase Notes at the Issue Price.  Because of the absence of authority on
point, there are substantial uncertainties regarding the U.S. federal income
tax consequences of an investment in the Notes.

         As used herein, the term "United States Holder" means a holder of a
Note that is (i) a United States citizen or a resident of the United States
for U.S. federal income tax purposes, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) an estate or trust the income of
which is subject to U.S. federal income taxation regardless of its source or
(iv) a person otherwise subject to U.S. federal income taxation on a net
income basis in respect of such holder's ownership of the Notes.

         The Notes will be treated as debt for United States federal income
tax purposes.

         Although proposed Treasury regulations addressing the treatment of
contingent debt instruments were issued on December 15, 1994, such
regulations, which generally would require current accrual of contingent
amounts and would affect the character of gain on the sale, exchange or
retirement of a Note, by their terms apply only to debt instruments issued on
or after the 60th day after the regulations are finalized.

         Under general United States federal income tax principles, upon
exercise of the Exchange Right or upon payment pursuant to the Company
Exchange Right, a United States Holder will recognize gain or loss equal to
the difference between the amount realized (which, if the Company delivers
Basket Stocks, will be the fair market value of such stock at the time of the
exchange, plus any cash received in lieu of fractional shares) on the exchange
and such Holder's tax basis in the Note.  A United States Holder receiving any
of the Basket Stocks will have a basis in such Basket Stock equal to its fair
market value at the time of the exchange and a holding period in such stock
beginning the day after the date of the exchange.  With respect to accrual
basis taxpayers receiving the Call Price in cash pursuant to the Company
Exchange Right, such accrual basis taxpayers may recognize gain or loss at the
time the Notice is received rather than at the time of payment.  Any loss
recognized on any exchange will be treated as capital loss.  It is unclear,
however, under existing law whether gain recognized on any exchange will be
treated as ordinary or capital in character.  Prospective investors should
consult their tax advisors regarding the character of gain recognized upon
exercise of the Exchange Right or the Company Exchange Right.

         United States Holders that have acquired debt instruments similar to
the Notes and have accounted for such debt instruments under proposed, but
subsequently withdrawn, Treasury regulation Section  1.1275-4 may be deemed to
have established a method of accounting that must be followed with respect to
the Notes, unless consent of the Commissioner of the Internal Revenue Service
is obtained to change such method.  Absent such consent, such a Holder would
be required to account for the Note in the manner prescribed in withdrawn
Treasury regulation Section  1.1275-4.  The Internal Revenue Service, however,
would not be required to accept such method as correct.

         Any gain or loss recognized on the sale or other taxable disposition
(other than pursuant to the Exchange Right or the Company Exchange Right or
upon maturity of the Notes) of a Note will be treated as capital in character.

         There can be no assurance that the ultimate tax treatment of the
Notes would not differ significantly from the description herein.  Prospective
investors are urged to consult their tax advisors as to the possible
consequences of holding the Notes.

         Certain noncorporate United States Holders may be subject to backup
withholding at a rate of 31% on payments (whether in cash or by delivery of
the Basket Stocks) of principal, premium and interest (including original
issue discount, if any) on, and the proceeds of disposition of, a Note.
Backup withholding will apply only if the Holder (i) fails to furnish its
Taxpayer Identification Number ("TIN") which, for an individual, would be his
Social Security number, (ii) furnishes an incorrect TIN, (iii) is notified by
the Internal Revenue Service that it has failed to properly report payments of
interest and dividends or (iv) under certain circumstances, fails to certify,
under penalty of perjury, that it has furnished a correct TIN and has not been
notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report interest and dividend payments.  United
States Holders should consult their tax advisors regarding their qualification
for exemption from backup withholding and the procedure for obtaining such an
exemption if applicable.

         The amount of any backup withholding from a payment to a United States
Holder will be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such Holder to a refund, provided that
the required information is furnished to the Internal Revenue Service.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the offering of the Notes.  We also consent
to the use of our name under the caption "United States Federal Taxation" in
the pricing supplement relating to the Notes (the "Pricing Supplement").
Capitalized terms appearing herein and not defined have the meanings assigned
to such terms in the Pricing Supplement.

                                 Very truly yours,

                                                                  Exhibit 8.10


                             DAVIS POLK & WARDWELL
                             450 LEXINGTON AVENUE
                           NEW YORK, NEW YORK 10017

                                (212) 450-4571


                                                                 May 6, 1996

Morgan Stanley Group Inc.
1585 Broadway
New York, NY 10036

         Re:  Morgan Stanley Group Inc.
              Senior Fixed Rate Notes Due May 7, 2001
              ---------------------------------------

Dear Sirs:

         We have acted as special tax counsel for you in connection with the
issuance of your $25,000,000 aggregate principal amount Senior Fixed Rate
Notes due May 7, 2001 (the "Notes").  In our opinion, the discussion set forth
below is a summary of the material U.S. federal income tax considerations that
are generally relevant to holders of the Notes.  The summary is based on tax
laws in effect as of the date hereof, which are subject to change by
legislative, judicial or regulatory action that in some cases may have
retroactive effect.  This summary does not address all of the tax
considerations that may be relevant to a holder in light of such holder's
particular circumstances.  In particular, this summary addresses only persons
who hold Notes as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986 (the "Code"), and does not deal with persons
subject to special rules, such as foreign persons, certain financial
institutions, insurance companies, dealers in options or securities or
purchasers holding Notes as a part of a hedging transaction or straddle or as
part of a "synthetic security" or other integrated investments.  This summary
also does not deal with holders other than initial holders of the Notes who
purchase Notes at the Issue Price.

         The Notes will be treated as debt for United States federal income
tax purposes.

         The Notes will not be treated as bearing original issue discount for
United States income tax purposes.  The Notes will be issued at par.
Moreover, due to the Note's call option feature, all coupon payments under the
Note will be treated as qualified stated interest.  Accordingly, coupon
interest on the Note will be taxable to Holders as ordinary interest income at
the time the interest accrues or is received in accordance with the Holder's
method of accounting for United States income tax purposes.

         Upon the sale, exchange or retirement of a Note, a Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and such Holder's adjusted tax
basis in the Note.  Such gain will be treated as capital in character.  For
these purposes, the amount realized does not include any amount attributable
to accrued interest on the Note, which will be treated as ordinary in
character.

         Prospective investors should be urged to consult their tax advisors
as to the possible consequences of holding the Notes.

         Certain noncorporate Holders may be subject to backup withholding at
a rate of 31% on payments of principal, premium and interest (including
original issue discount, if any) on, and the proceeds of disposition of, a
Note.  Backup withholding will apply only if the Holder (i) fails to furnish
its Taxpayer Identification Number ("TIN") which, for an individual, would be
his Social Security number, (ii) furnishes an incorrect TIN, (iii) is notified
by the Internal Revenue Service that it has failed to properly report payments
of interest and dividends or (iv) under certain circumstances, fails to
certify, under penalty of perjury, that it has furnished a correct TIN and has
not been notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report interest and dividend payments.  Holders
should consult their tax advisors regarding their qualification for exemption
from backup withholding and the procedure for obtaining such an exemption if
applicable.

         The amount of any backup withholding from a payment to a Holder will
be allowed as a credit against such Holder's United States federal income tax
liability and may entitle such Holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the offering of the Notes.  We also consent
to the use of our name under the caption "United States Federal Taxation" in
the pricing supplement relating to the Notes (the "Pricing Supplement").
Capitalized terms appearing herein and not defined have the meanings assigned
to such terms in the Pricing Supplement.

                                 Very truly yours,

                                                                 Exhibit 8.11


                             DAVIS POLK & WARDWELL
                             450 LEXINGTON AVENUE
                           NEW YORK, NEW YORK 10017

                                (212) 450-4571


                                                                  May 6, 1996

Morgan Stanley Group Inc.
1585 Broadway
New York, NY 10036

         Re:  Morgan Stanley Group Inc.
              Senior Fixed Rate Notes Due May 15, 2001
              ----------------------------------------

Dear Sirs:

         We have acted as special tax counsel for you in connection with the
issuance of your $25,000,000 aggregate principal amount Senior Fixed Rate
Notes due May 15, 2001 (the "Notes").  In our opinion, the discussion set
forth below is a summary of the material U.S. federal income tax
considerations that are generally relevant to holders of the Notes.  The
summary is based on tax laws in effect as of the date hereof, which are
subject to change by legislative, judicial or regulatory action that in some
cases may have retroactive effect.  This summary does not address all of the
tax considerations that may be relevant to a holder in light of such holder's
particular circumstances.  In particular, this summary addresses only persons
who hold Notes as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986 (the "Code"), and does not deal with persons
subject to special rules, such as foreign persons, certain financial
institutions, insurance companies, dealers in options or securities or
purchasers holding Notes as a part of a hedging transaction or straddle or as
part of a "synthetic security" or other integrated investments.  This summary
also does not deal with holders other than initial holders of the Notes who
purchase Notes at the Issue Price.

         The Notes will be treated as debt for United States federal income
tax purposes.

         The Notes will not be treated as bearing original issue discount for
United States income tax purposes.  The Notes will be issued at par.
Moreover, due to the Note's call option feature, all coupon payments under the
Note will be treated as qualified stated interest.  Accordingly, coupon
interest on the Note will be taxable to Holders as ordinary interest income at
the time the interest accrues or is received in accordance with the Holder's
method of accounting for United States income tax purposes.

         Upon the sale, exchange or retirement of a Note, a Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and such Holder's adjusted tax
basis in the Note.  Such gain will be treated as capital in character.  For
these purposes, the amount realized does not include any amount attributable
to accrued interest on the Note, which will be treated as ordinary in
character.

         Prospective investors should be urged to consult their tax advisors
as to the possible consequences of holding the Notes.

         Certain noncorporate Holders may be subject to backup withholding at
a rate of 31% on payments of principal, premium and interest (including
original issue discount, if any) on, and the proceeds of disposition of, a
Note.  Backup withholding will apply only if the Holder (i) fails to furnish
its Taxpayer Identification Number ("TIN") which, for an individual, would be
his Social Security number, (ii) furnishes an incorrect TIN, (iii) is notified
by the Internal Revenue Service that it has failed to properly report payments
of interest and dividends or (iv) under certain circumstances, fails to
certify, under penalty of perjury, that it has furnished a correct TIN and has
not been notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report interest and dividend payments.  Holders
should consult their tax advisors regarding their qualification for exemption
from backup withholding and the procedure for obtaining such an exemption if
applicable.

         The amount of any backup withholding from a payment to a Holder will
be allowed as a credit against such Holder's United States federal income tax
liability and may entitle such Holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the offering of the Notes.  We also consent
to the use of our name under the caption "United States Federal Taxation" in
the pricing supplement relating to the Notes (the "Pricing Supplement").
Capitalized terms appearing herein and not defined have the meanings assigned
to such terms in the Pricing Supplement.

                                 Very truly yours,


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