Attached files
file | filename |
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S-1/A - FORM S-1/A - Madison Bancorp Inc | g23701a1sv1za.htm |
EX-1.2 - EX-1.2 - Madison Bancorp Inc | g23701a1exv1w2.htm |
EX-1.1 - EX-1.1 - Madison Bancorp Inc | g23701a1exv1w1.htm |
EX-8.2 - EX-8.2 - Madison Bancorp Inc | g23701a1exv8w2.htm |
EX-2.0 - EX-2.0 - Madison Bancorp Inc | g23701a1exv2w0.htm |
EX-5.0 - EX-5.0 - Madison Bancorp Inc | g23701a1exv5w0.htm |
EX-99.4 - EX-99.4 - Madison Bancorp Inc | g23701a1exv99w4.htm |
EX-10.2 - EX-10.2 - Madison Bancorp Inc | g23701a1exv10w2.htm |
EX-10.13 - EX-10.13 - Madison Bancorp Inc | g23701a1exv10w13.htm |
EX-10.12 - EX-10.12 - Madison Bancorp Inc | g23701a1exv10w12.htm |
EX-10.11 - EX-10.11 - Madison Bancorp Inc | g23701a1exv10w11.htm |
EX-10.15 - EX-10.15 - Madison Bancorp Inc | g23701a1exv10w15.htm |
EX-10.14 - EX-10.14 - Madison Bancorp Inc | g23701a1exv10w14.htm |
EX-23.2 - EX-23.2 - Madison Bancorp Inc | g23701a1exv23w2.htm |
Exhibit 8.1
, 2010
|
Board of Directors
Madison Bancorp, Inc.
Madison Square Federal Savings Bank
9649 Belair Road
Baltimore, Maryland 21236
Madison Bancorp, Inc.
Madison Square Federal Savings Bank
9649 Belair Road
Baltimore, Maryland 21236
Re: | Federal Income Tax Opinion Relating to the Conversion of Madison Square Federal Savings Bank from a Federally-Chartered Mutual Savings Bank to a Federally-Chartered Stock Savings Bank |
Ladies and Gentlemen:
You have asked for our opinion regarding the material federal income tax consequences of the
proposed conversion of Madison Square Federal Savings Bank from a federally-chartered mutual
savings bank to a federally-chartered stock savings bank (the Converted Bank) and the acquisition
of the Converted Banks capital stock by Madison Bancorp, Inc., a Maryland corporation, pursuant to
a plan of conversion initially adopted by the Board of Directors of Madison Square Federal Savings
Bank on April 6, 2010, and amended on May 17, 2010 (the Plan of Conversion). All capitalized
terms used but not defined herein shall have the meanings assigned to them in the Plan of
Conversion.
In connection with the opinions expressed below, we have examined and relied upon originals,
or copies certified or otherwise identified to our satisfaction, of the Plan of Conversion and of
such corporate records of the parties to the conversion as we have deemed appropriate. We have
also relied upon, without independent verification, the representations of Madison Square Federal
Savings Bank and Madison Bancorp, Inc. contained in their letter to us dated , 2010.
We have assumed that such representations are true and that the parties to the conversion will act
in accordance with the Plan of Conversion. In addition, we have made such investigations of law as
we have deemed appropriate to form a basis for the opinions expressed below.
We have assumed that the conversion contemplated by the Plan of Conversion will be consummated
in accordance therewith and as described in the prospectus included as part of the Registration
Statement on Form S-1 filed by Madison Bancorp, Inc.
Board of Directors
Madison Bancorp, Inc.
Madison Square Federal Savings Bank
, 2010
Page 2
Madison Bancorp, Inc.
Madison Square Federal Savings Bank
, 2010
Page 2
In issuing the opinions set forth below, we have referred solely to existing provisions of the
Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations and similar
guidance issued by the Internal Revenue Service (the IRS) under the Code. Changes in the tax
laws could affect the continued validity of the opinions expressed below. Furthermore, there can
be no assurance that the opinions expressed herein would be adopted by the IRS or a court of law.
We assume no obligation to revise or supplement this opinion should the present federal income tax
laws be changed by any legislation, judicial decisions or otherwise.
Based on and subject to the foregoing, it is our opinion that, for federal income tax
purposes, under current law:
1. | The conversion of Madison Square Federal Savings Bank from the mutual to the stock form of organization will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code (see Rev. Rul. 80-105, 1980-1 C.B. 78), and no gain or loss will be recognized by account holders and no gain or loss will be recognized by Madison Square Federal Savings Bank by reason of such conversion. | ||
2. | No gain or loss will be recognized by Madison Bancorp, Inc. upon the sale of shares of common stock in the Offering (Section 1032(a) of the Code). | ||
3. | No gain or loss will be recognized by account holders of Madison Square Federal Savings Bank upon the issuance to them of accounts in the Converted Bank immediately after the conversion, in the same dollar amounts and on the same terms and conditions as their accounts at Madison Square Federal Savings Bank plus interests in the liquidation account in the Converted Bank (Section 354(a) of the Code). | ||
4. | It is more likely than not that the fair market value of the non-transferable subscription rights to purchase shares of common stock of Madison Bancorp, Inc. to be issued to Eligible Account Holders, Supplemental Eligible Account Holders, and Other Members is zero (the Subscription Rights), and, accordingly, that no income will be realized by Eligible Account Holders, Supplemental Eligible Account Holders, and Other Members upon the issuance to them of Subscription Rights (Section 356(a) of the Code) or upon the exercise of the Subscription Rights (Rev. Rul. 56-572, 1956-2 C.B. 182). | ||
5. | It is more likely than not that the tax basis to the holders of shares of common stock purchased in the Offering pursuant to the exercise of Subscription Rights will be the amount paid therefor, and that the holding period for such shares of common stock will begin on the date of completion of the Offering (Section 1223(5) of the Code). |
Board of Directors
Madison Bancorp, Inc.
Madison Square Federal Savings Bank
, 2010
Page 3
Madison Bancorp, Inc.
Madison Square Federal Savings Bank
, 2010
Page 3
6. | The holding period for shares of common stock purchased in the Community Offering or Syndicated Community Offering will begin on the day after the date of the purchase (Rev. Rul. 70-598, 1970-2 C.B. 168). |
The reasoning in support of our opinions set forth in 4 and 5 above is set forth herein.
Whether subscription rights have a market value for federal income tax purposes is a question of
fact, depending upon all relevant facts and circumstances. The IRS will not issue rulings on
whether subscription rights have a market value. We are unaware of any instance in which the IRS
has taken the position that nontransferable subscription rights issued by a converting financial
institution have a market value. The subscription rights will be granted at no cost to the
recipients, will be nontransferable and of short duration, and will afford the recipients the right
only to purchase Madison Bancorp, Inc. common stock at a price equal to its estimated fair market
value, which will be the same price as the purchase price for the unsubscribed shares of common
stock. We believe that it is more likely than not (i.e., that there is a more than a 50%
likelihood) that the Subscription Rights have no market value for federal income tax purposes.
Except as set forth above, we express no opinion to any party as to the tax consequences,
whether federal, state, local or foreign, of the conversion or of any transaction related thereto
or contemplated by the Plan of Conversion. This opinion may not be referred to in any document
without our express written consent. We consent to the filing of this opinion as an exhibit to the
Application for Conversion on Form AC filed with the Office of Thrift Supervision and as an exhibit
to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission, both
filed in connection with the conversion, and to reference to our firm and to this opinion in the
prospectus included in both the Registration Statement on Form S-1 and the Application for
Conversion on Form AC under the headings The Conversion and Stock OfferingMaterial Income Tax
Consequences and Legal and Tax Opinions. 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, KILPATRICK STOCKTON LLP |
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By: | ||||
Joel E. Rappoport, a Partner | ||||