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EXHIBIT 8.1
[HUNTON & WILLIAMS LETTERHEAD]
December 8, 2000
FelCor Lodging Trust Incorporated
545 E. John Carpenter Freeway, Suite 1300
Irving, Texas 75062
FelCor Lodging Trust Incorporated
Qualification as
Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as tax counsel to FelCor Lodging Trust
Incorporated, a Maryland corporation (the "Company"), in connection with the
preparation of a Form S-3 registration statement filed with the Securities and
Exchange Commission ("SEC") on December 8, 2000 (the "Registration Statement"),
with respect to the offer and sale from time to time in open-market or
privately-negotiated transactions that may involve underwriters, brokers, or
dealers of up to 5,823,060 shares (the "Secondary Shares") of the common stock,
par value $0.01 per share (the "Common Stock"), of the Company by the selling
shareholders named in the prospectus contained as a part of the Registration
Statement (the "Prospectus"). You have requested our opinion regarding certain
U.S. federal income tax matters.
The Company currently owns, directly or through FelCor Lodging
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), equity interests in 187 hotels and associated personal property
(the "Hotels"). The Operating Partnership owns the Hotels both directly and
through subsidiary partnerships, joint ventures, and limited liability companies
(collectively, the "Subsidiary Partnerships"). The Operating Partnership or a
Subsidiary Partnership, as applicable, leases 85 of the Hotels to DJONT
Operations, L.L.C., a Delaware limited liability company, or an affiliate
thereof ("DJONT") pursuant to substantially similar operating leases
(collectively, the "DJONT Leases"), and leases 100 of the Hotels to Bristol
Hotels & Resorts, Inc., a Delaware corporation, or a subsidiary thereof ("BHR"
and, together with DJONT, the "Lessees") pursuant to substantially similar
operating leases (collectively, the "BHR Leases" and,
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December 8, 2000
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together with the DJONT Leases, the "Leases"). One of (i) Hilton Hotel
Corporation or its subsidiary ("Hilton"), (ii) Starwood Hotels & Resorts
Worldwide, Inc. or its subsidiary, (iii) Coastal Hotel Group, Inc., and (iv)
American General Hospitality, Inc. operates and manages all of the Hotels that
are leased by DJONT pursuant to substantially similar management agreements (the
"DJONT Management Agreements") with DJONT. Subsidiaries of Bass plc ("Bass")
operate and manage all of the Hotels that are leased by BHR pursuant to
substantially similar management agreements (the "BHR Management Agreements"
and, together with the DJONT Management Agreements, the "Management Agreements")
with BHR, and also operate and manage one of the Hotels that is not leased to a
lessee. An independent hotel management company manages the other Hotel that is
not leased to a lessee.
In connection with the opinions rendered below, we have
examined the following:
1. the Company's Articles of Amendment and Restatement, as duly filed with the
Department of Assessments and Taxation of the State of Maryland on June 22,
1995, as amended or supplemented by Articles of Merger dated June 23, 1995,
Articles Supplementary dated April 30, 1996, Articles of Amendment dated August
8, 1996, Articles of Amendment dated June 16, 1997, Articles of Amendment dated
October 30, 1997, and Articles of Amendment dated July 27, 1998;
2. the Company's Bylaws;
3. the Prospectus;
4. the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated June 28, 1994 (the "Operating Partnership Agreement"), among
the Company, as general partner, and several limited partners, as amended on
November 17, 1995, January 9, 1996, January 10, 1996, May 2, 1996, September 16,
1996, May 16, 1997, February 6, 1998, July 28, 1998, December 29, 1998, December
31, 1998, March 1, 1999, and February 27, 2000;
5. Addendums Number 1 (and Annexes Number 1 and 2 thereto), dated January 9,
1996, and Number 2, dated May 2, 1996, to the Operating Partnership Agreement;
6. the partnership agreements, operating agreements, and joint venture
agreements governing the Subsidiary Partnerships;
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FelCor Lodging Trust Incorporated
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7. the Certificate of Incorporation of Kingston Plantation Development Corp.
("Kingston"), a corporation of which the Operating Partnership owns 100% of the
nonvoting stock, representing 97% of the value of Kingston's outstanding stock;
8. the Certificate of Incorporation of Promus/FelCor Manager, Inc. ("Manager
Inc."), a corporation of which Kingston owns 50% of the outstanding stock and
Hilton owns 50% of the outstanding stock;
9. the Leases;
10. the Management Agreements;
11. the tax opinions given by Bracewell & Patterson, L.L.P., dated June 26,
1996, April 30, 1996, December 20, 1995, May 18, 1995, and July 13, 1994,
regarding the Company's qualification as a real estate investment trust (a
"REIT") for its taxable years ended December 31, 1994 and December 31, 1995, and
the tax opinion given by Bracewell & Patterson, L.L.P., dated April 26, 1995,
regarding the tax-free reorganization of the Company (the "Bracewell & Patterson
Opinions"); and
12. 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
generally 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;
2. during its taxable year ending December 31, 2000 and subsequent taxable
years, the Company has operated and will continue to operate in such a manner
that makes and will continue to make the representations contained in a
certificate, dated December 8, 2000 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, the
Operating Partnership Agreement, or the organizational documents of the
Subsidiary Partnerships (the "Subsidiary Partnership Agreements") after the date
of this opinion that would affect its qualification as a REIT for any taxable
year;
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FelCor Lodging Trust Incorporated
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4. each partner or member of the Operating Partnership and the Subsidiary
Partnerships (each, a "Partner") 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 Subsidiary
Partnership Agreements and the transactions contemplated thereby; and
6. no action will be taken by the Company, the Operating Partnership, the
Subsidiary Partnerships, the Partners, Kingston, or Manager Inc. 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 have
assumed the correctness of the Bracewell & Patterson Opinions and the factual
representations contained in the Officer's Certificate. After reasonable
inquiry, we are not aware of any facts inconsistent with the representations set
forth in the Officer's Certificate. Furthermore, where such factual
representations involve terms defined in the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury regulations thereunder (the "Regulations"),
published rulings of the Internal Revenue Service (the "Service"), or other
relevant authority, we have explained such terms to the Company's
representatives and are satisfied that the Company's representatives understand
such terms and are capable of making such factual representations.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussions in
the Prospectus under the caption "Federal Income Tax Consequences of FelCor's
Status as a REIT" (which are incorporated herein by reference), we are of the
opinion that:
(a) the Company qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Code for its taxable years
ended December 31, 1995 through December 31, 1999, and the
Company's organization and current and proposed method of
operation will enable it to continue to qualify as a REIT for
its taxable year ending December 31, 2000, and in the future;
and
(b) the statements in the Prospectus under the caption
"Federal Income Tax Consequences of FelCor's Status as a
REIT," insofar as such
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statements constitute a summary of the United States federal
income tax laws referred to therein, are correct in all
material respects, and the discussions thereunder fairly
summarize the federal income tax considerations that are
likely to be material to a holder of the Secondary Shares.
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.
Except as set forth in paragraph (b) above, we have not
participated in the preparation of the Prospectus and we do not assume any
responsibility for, and make no representation that we have independently
verified, the accuracy, completeness, or fairness of the statements contained in
the Prospectus.
The foregoing opinions are based on current provisions of the
Code and the Regulations, published administrative interpretations thereof, and
published court decisions. The 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. 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
Securities Act of 1933, as amended, 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 or other 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 addressee, 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.
Very truly yours,
/s/ Hunton & Williams
