EXHIBIT (8)-2
[LETTERHEAD OF LEBOEUF, LAMB, XXXXXX & XXXXXX, L.L.P.]
January 25, 1996
Potomac Electric Power Company
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Re: Agreement and Plan of Merger by and among
Baltimore Gas and Electric Company, Potomac
Electric Power Company and Constellation Energy
Corporation dated as of September 22, 1995
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Ladies and Gentlemen:
You have requested our opinion as to the United States federal income tax
consequences to Potomac Electric Power Company, a corporation organized under
the laws of the District of Columbia and the Commonwealth of Virginia ("PEPCO"),
Constellation Energy Corporation, a corporation organized under the laws of the
State of Maryland and the Commonwealth of Virginia (the "Company"), and the
shareholders of PEPCO, resulting from the consummation of the merger of PEPCO
and Baltimore Gas and Electric Company, a corporation organized under the laws
of the State of Maryland ("BGE"), with and into the Company pursuant to the
Agreement and Plan of Merger by and among BGE, PEPCO and the Company dated as of
September 22, 1995 (the "Merger Agreement").
As counsel to PEPCO, we have assisted in the preparation of the Joint Proxy
Statement/Prospectus to be issued in connection with the Merger, including the
descriptions of certain federal income tax consequences resulting therefrom
contained therein under the headings "Certain Federal Income Tax Consequences of
the Merger."
Except as otherwise provided, capitalized terms not defined herein have the
meanings set forth in the Merger Agreement or in the certificates dated on or
about the date hereof, which have been delivered to us by BGE, PEPCO and the
Company for purposes of this opinion and which contain certain representations
of BGE, PEPCO and the Company (the "Officer's Certificates").
The descriptions in the Joint Proxy Statement/Prospectus under the headings
"Certain Federal Income Tax Consequences of the Merger" and our opinion as
stated herein are based upon and subject to:
(i) the Merger being effected in the manner described in the Joint Proxy
Statement/Prospectus and in accordance with the provisions of the Merger
Agreement;
(ii) the accuracy of the representations made to us by BGE, PEPCO and
the Company in the respective Officer's Certificates at all times through
the Effective Time of the Merger;
(iii) the accuracy and completeness of the statements concerning the
Merger set forth in the Joint Proxy Statement/Prospectus, including the
statements of the purposes of BGE, PEPCO and the Company for consummating
the Merger; and
(iv) the accuracy of the information concerning the Merger that has come
to our attention during our engagement.
Based on our examination of the foregoing items and subject to the
limitations set forth herein, we are of the opinion that, under current law, for
United States federal income tax purposes, the Merger will constitute a
reorganization within the meaning of section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"). Accordingly:
(i) PEPCO and the Company will each be a party to a reorganization
within the meaning of section 368(b) of the Code;
(ii) no gain or loss will be recognized by PEPCO or the Company as a
result of consummation of the Merger;
(iii) no gain or loss will be recognized by the shareholders of PEPCO
upon their receipt of (a) Company Common Stock in exchange for PEPCO Common
Stock or (b) Company Preferred Stock in exchange for PEPCO Preferred Stock;
(iv) the tax basis of the shares of capital stock of the Company received
by the shareholders of PEPCO will be the same as the tax basis of their
shares of capital stock of PEPCO exchanged therefor; and
(v) the holding period of the shares of capital stock of the Company in
the hands of the shareholders of PEPCO will include the holding period of
their shares of capital stock of PEPCO exchanged therefor, provided such
shares of PEPCO capital stock are held as capital assets at Effective Time.
This opinion does not address state, local or foreign tax consequences that
may result from the Merger. In addition, no opinion is expressed as to any
United States federal income tax consequences of the Merger except as
specifically set forth herein and this opinion may not be relied upon except
with respect to the consequences specifically addressed herein.
We hereby consent to the (i) filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and (ii)
reference to our firm under the headings "Certain Federal Income Tax
Consequences of the Merger" in the Joint Proxy Statement/Prospectus that
constitutes part of the Registration Statement. In giving such consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
/s/ LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P
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