SecProbe.io

CORRESP
1
filename1.htm

McRae Industries, Inc.

Mark R. Busch

704.331.7440

Fax: 704.353.3140

mbusch@kennedycovington.com

September 27, 2005

VIA: EDGAR

Securities and Exchange Commission

Division of Corporation Finance, Mail Stop 3561

450 Fifth Street, NW

Washington, DC 20549-0308

Attention: Abby L. Adams, Esq.

    RE:

    McRae Industries, Inc. (the “Company”)

Schedule 13E-3 (File no. 5-34909)

Preliminary Proxy Statement on Schedule 14A (File no. 1-8578)

Ladies and Gentlemen:

     This letter responds to each of the comments in the staff’s comment letter dated September 9,
2005. The responses below are keyed to the number of each of the
comments. A blackline copy of the proxy statement reflecting the
changes discussed below has previously been provided to Jeffrey
Werbitt of the Staff.

     The responses to your comments, which have been prepared by the Company with input from its
advisors, are as follows:

Securities and Exchange Commission

September 27, 2005

Page 2

    Comment

    No.

    Response

    1

    The “Special Factors — Recommendation of the Special
Committee” section of proxy statement has been revised by
deleting the sentence that stated that “[n]either brokers and
other nominees nor beneficial owners are record holders.” The
“Questions and Answers” section of the proxy statement already
included detailed information regarding what actions security
holders may take to be certain of the manner in which their
shares will be treated.

    2

    The “Special Factors — Recommendation of the Special
Committee” section of proxy statement has been revised to
clarify how each of the factors that supported the special
committee’s fairness determination with respect to
unaffiliated security holders who would be cashed out also
supported the special committee’s fairness determination with
respect to unaffiliated security holders who would remain
following the transaction.

    3

    The “Special Factors — Recommendation of the Special
Committee” section of the proxy statement has been revised to
provide additional details regarding why the special committee
believed that the Company’s going concern value significantly
exceeded its liquidation value.

    4

    The “Opinion of the Financial Advisor” section of the proxy
statement has been revised to further explain why Oxford
Advisors believed that among all methodologies typically used
by expert financial advisors, the ones it used were the most
appropriate for determining the value of the Company in this
particular transaction.

    5

    The “Opinion of the Financial Advisor” section of the proxy
statement has been revised to describe how the size of the
companies used in the comparable company analysis and the size
of the transactions and the companies involved in the
transactions used in the comparable transactional analysis
factored into such analyses.

Securities and Exchange Commission

September 27, 2005

Page 3

    Comment

    No.

    Response

    6

    The “Opinion of the Financial Advisor” section of the proxy
statement has been revised to clarify how the comparable
transactional analysis supports Oxford Advisor’s fairness
opinion and to further explain why Oxford Advisors believed
that the premium proposed to be paid in the transaction over the highest price paid for the common stock over the
12-month period prior to announcement of the transaction was a
better indicator of fairness than the premium proposed to be paid in
the transaction over the closing price on the day
prior to the announcement of the transaction.

     Should you have any questions with respect to this letter, please call the undersigned at
(704) 331-7440. Should the undersigned not be available, please contact James R. Wyche of this
firm who can be reached at (704) 331-7558.

Very truly yours,

/s/ Mark R. Busch

Mark R. Busch

For the Firm

    cc:

    McRae Industries, Inc.

    Mr. Jeffrey B. Werbitt