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EXHIBIT 8.1
[SMITH, GAMBRELL & RUSSELL, LLP LETTERHEAD]
June 21, 2000
Franklin Financial Corporation
230 Public Square
Franklin, Tennessee 37064
Franklin Capital Trust I
230 Public Square
Franklin, Tennessee 37064
Re: Registration Statement on Form S-2; Registration No. 333-38674
Dear Gentlemen:
We have acted as counsel for Franklin Financial Corporation a
Tennessee corporation (the "Company"), and Franklin Capital Trust I ("Franklin
Capital Trust"), a statutory business trust created under the laws of Delaware,
in connection with the above-captioned Registration Statement on Form S-2,
filed with the Securities and Exchange Commission (the "Commission") on June 6,
2000, under the Securities Act of 1933, as amended (the "Act") (such
Registration Statement being hereinafter referred to as the "Registration
Statement"), for the purpose of registering the Preferred Securities (as
defined in the Franklin Capital Trust I Amended and Restated Trust Agreement to
be entered into by and among the Company, as Depositor, SunTrust Bank, as
Property Trustee, Wilmington Trust Company, as Delaware Trustee, and the
Administrative Trustees named therein, the form of which is filed as an exhibit
to the Registration Statement (the "Trust Agreement")) issued by Franklin
Capital Trust and the Debentures (as defined in the Indenture to be entered
into by and between the Company, as Depositor, and the Debenture Trustee, as
trustee, the form of which is filed as an exhibit to the Registration Statement
(the "Indenture")) issued by the Company to Franklin Capital Trust in
connection with such issuance of the Preferred Securities. All capitalized
terms not otherwise defined herein shall have the meaning set forth in the
Trust Agreement or the Indenture, as applicable.
In rendering this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Certificate
of Trust of Franklin Capital Trust dated as of June 2, 2000; (ii) the form of
the Trust Agreement; (iii) the form of the Preferred Securities Certificate of
Franklin Capital Trust; (iv) the form of the Guarantee; (v) the form of
Debenture; and (vi) the
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Franklin Financial Corporation
Franklin Capital Trust I
June 21, 2000
Page 2
form of Indenture, in each case in the form filed as an exhibit to the
Registration Statement. We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such other documents,
certificates, and records as we have deemed necessary or appropriate for
purposes of rendering the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company or Franklin Capital Trust,
we have assumed that such parties had the power, corporate or other, to enter
into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and that such documents constitute
valid and binding obligations of such parties. In addition, we have assumed
that the Trust Agreement, the Preferred Securities, the Guarantee, the
Debentures and the Indenture when executed, will be executed in substantially
the form reviewed by us and that the terms of the Debentures when established
in conformity with the Indenture will not violate any applicable law. As to any
facts material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers, trustees, and other representatives of the
Company, Franklin Capital Trust and others.
We hereby confirm that, although the discussion set forth under the
heading "MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES" in the form of
the Prospectus for the offering of Preferred Securities filed as part of the
Registration Statement (the "Prospectus") does not purport to discuss all
possible United States federal income tax consequences of the purchase,
ownership and disposition of Preferred Securities, in our opinion, such
discussion constitutes, in all material respects, a fair and accurate summary
of the United States federal income tax consequences of the purchase, ownership
and disposition of Preferred Securities, based upon current law, as they relate
to holders described therein. It is possible that contrary positions with
regard to the purchase, ownership and disposition of the Preferred Securities
may be taken by the Internal Revenue Service and that a court may agree with
such contrary positions.
Additionally, based upon the facts, assumptions and representations
set forth or referred to herein, and the accuracy of such facts, assumptions
and representations as of the date hereof, it is our opinion that: (i) Franklin
Capital Trust will be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation; and (ii)
as a result, each holder of Preferred Securities should be treated as owning an
undivided beneficial interest in the Debentures, and each such holder will be
required to include in its gross income each item of income or gain with
respect to its allocable share of the Debentures.
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Franklin Financial Corporation
Franklin Capital Trust I
June 21, 2000
Page 3
The opinions expressed in this letter are based on the Internal
Revenue Code of 1986, as amended, the Income Tax Regulations promulgated by the
United States Treasury Department thereunder and judicial authority reported as
of the date hereof. We have also considered the position of the Internal
Revenue Service (the "IRS") reflected in published and private rulings.
Although we are not aware of any pending changes to these authorities that
would alter our opinions, there can be no assurances that future legislation or
administrative changes, court decisions or IRS interpretations will not
significantly modify the statements or opinions expressed herein.
Our opinion is limited to those federal income tax issues specifically
considered herein and is addressed to and is only for the benefit of the
Company and Franklin Capital Trust in connection with the filing of the
Registration Statement and, except as set forth below, is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied
upon by any other person for any purpose without our written consent. We do not
express any opinion as to any other United States federal income tax issues, or
any state or local tax issues. Although the opinions herein are based upon our
best interpretation of existing sources of law and expresses what we believe a
court would properly conclude if presented with these issues, no assurance can
be given that such interpretations would be followed if they were to become the
subject of judicial or administrative proceedings.
We hereby consent to the use of our name under the captions "MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES" and "LEGAL MATTERS" in the
Prospectus and the filing of this opinion with the Commission as an exhibit to
the Registration Statement. In giving this consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission promulgated
thereunder. This opinion is expressed as of the date hereof and applies only to
the disclosures set forth in the Prospectus and Registration Statement. We
disclaim any undertaking to advise you of any subsequent changes of the facts
stated or assumed herein or any subsequent changes in applicable law.
Sincerely,
SMITH, GAMBRELL & RUSSELL, LLP
By: /s/ Ronald W. Wells
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