SecProbe.io

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November 7, 2005

VIA EDGAR
---------

Michael Pressman, Special Counsel
Office of Mergers & Acquisitions
Securities and Exchange Commission
Division of Corporation Finance
One Station Place
100 F Street, N.E.
Washington, D.C. 20549

         RE:      LXU HEALTHCARE, INC.
                  SCHEDULE 13E-3 FILED AUGUST 31, 2005
                  FILE NO. 5-78542

                  PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A
                  FILED AUGUST 31, 2005, AS AMENDED
                  FILE NO. 0-14961

Dear Mr. Pressman:

     This letter is submitted on behalf of LXU Healthcare,  Inc. (the "Company")
in response to comments of the staff of the Division of Corporation Finance (the
"Staff") of the  Securities  and Exchange  Commission  (the  "Commission")  with
respect to the Company's  Schedule 13E-3 filed with the Commission on August 31,
2005 and the Company's  Preliminary  Proxy  Statement on Schedule 14A filed with
the Commission on August 31, 2005, as amended pursuant to Amendment No. 1 to the
Preliminary  Proxy  Statement filed with the Commission on October 19, 2005 (the
"Preliminary Proxy Statement"),  as set forth in your letter,  dated October 31,
2005 (the "Comment Letter"), to George Lloyd. The Company is concurrently filing
Amendment No. 1 to the Schedule  13E-3 and  Amendment  No. 2 to the  Preliminary
Proxy Statement (together, the "Amendments"),  which principally include changes
to reflect responses to the Staff's  comments.  The responses in this letter are
based on  representations  made by the  Company to Goodwin  Procter  LLP for the
purpose of preparing this letter.  The Company will separately deliver copies of
the  Amendments,  marked to show changes  responsive to the Comment  Letter,  to
members of the Staff specified in the Comment Letter.

     For reference purposes,  the text of the Comment Letter has been reproduced
herein with responses below each numbered comment.  Unless otherwise  indicated,
page references in the  descriptions  of the Staff's  comments refer to Schedule
13E-3 and the  Preliminary  Proxy Statement and page references in the responses
refer to the Amendments.

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Securities and Exchange Commission
Page 2

GENERAL
-------

1.        WE NOTE YOUR  RESPONSE TO PRIOR  COMMENT ONE.  PLEASE  PROVIDE US WITH
          COPIES OF THE  MATERIALS  PREPARED  BY  JEFFRIES &  COMPANY,  SHATTUCK
          HAMMOND,  BURNHAM  SECURITIES,  AND WILLIAM BLAIR.  IN ADDITION,  YOUR
          RESPONSE  INDICATES  THAT  THE  BOARD  DID NOT GIVE  "ANY  SIGNIFICANT
          WEIGHT" TO THE BANKS'  VALUATIONS OF THE COMPANY AND LATER STATES THAT
          THE  MATERIALS  WERE NOT RELIED ON BY THE BOARD.  PLEASE  REVISE  YOUR
          RESPONSE,  AND THE  DISCLOSURE,  TO  ADDRESS  THIS  INCONSISTENCY  AND
          REFLECT THE LEVEL OF CONSIDERATION GIVEN TO THE VALUATIONS.

          RESPONSE:  In  response  to  the  Staff's  comments,  the  Company  is
          supplementally providing copies of the materials prepared by Jefferies
          & Company,  Shattuck Hammond Partners,  Burnham  Securities,  Inc. and
          William  Blair & Company.  In  addition,  the  Company has revised the
          Preliminary  Proxy  Statement on pages 18 and 27 and has revised below
          its  response  to  prior  comment  one to  address  the  inconsistency
          referenced  by the Staff  and to  reflect  the level of  consideration
          given to the materials by the Company's Board.

REVISED RESPONSE TO PRIOR COMMENT ONE
-------------------------------------

     The Company respectfully submits that the business context and purposes for
which Jefferies & Company, Shattuck Hammond Partners,  Burnham Securities,  Inc.
and  William  Blair & Company  prepared  the  materials  makes  them  unreliable
indicators of the value of the Company.  In addition,  the Company  respectfully
submits that these materials are not reports,  opinions or appraisals materially
related to the Stock Splits.

     These materials are "pitch materials" prepared by these investment banks to
market  their  services to the  Company.  As is common,  these  pitch  materials
contained a highly preliminary view of the valuation of the Company based solely
on publicly-available information about the Company. These investment banks were
not  engaged by the  Company  to  prepare  these  materials  or the  preliminary
valuations  contained  therein and received no compensation  for preparing these
materials.

     Because the investment banks' primary motivation in preparing these reports
was to  secure  business  from the  Company,  these  banks had an  incentive  to
overstate the value of the Company. The very high and broad range of values ($37
million to $70 million) for the Company  indicated by the investment banks are a
consequence of the fact that these investment banks had limited knowledge of the
Company and  conducted no due  diligence of the Company in  connection  with the
preparation of these materials.

     Based on all of these factors,  the Company  believes that these  materials
are an  unreliable  indicator of the  Company's  value and lack the  credibility
associated  with  independent  appraisals,  reports  or  opinions  of  the  kind
discussed in the Ephraim  No-Action  Letter and the In re Meyers  Parking System

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Securities and Exchange Commission
Page 3

Release. The absence of any significant research or due diligence  investigation
of the Company used to prepare these  materials and the absence of  compensation
contrasts with the extensive,  presumably paid, review conducted for the purpose
of  preparing  an  independent   appraisal  of  assets  in  connection   with  a
post-closing  adjustment in a merger  context (as was the case in the Charles L.
Ephraim  No-Action  letter)  and  for  the  purpose  of  preparing  third  party
appraisals of properties  in  connection  with the valuation of minority  shares
(which  appraisals  were used as a  starting  point for the  preparation  of the
fairness  opinion  referenced in the In re Meyers Parking System  Release).  For
this reason, as indicated in the Preliminary Proxy Statement,  the Board did not
rely on these  indications of the investment banks' views regarding the value of
the Company.

     In  addition,  the Company  does not  believe  that the  investment  banks'
presentations  are  "materially  related"  to  the  deregistration  transaction.
Although  the  Company  recognizes  that  the fact  that a  report,  opinion  or
appraisal  was  not  specifically  prepared  for  purposes  of  the  Rule  13e-3
transaction  is  not   dispositive  of  its  relevance  or  materiality  to  the
transaction,  the Company  believes that it is relevant  that, in this case, the
investment  banks'  materials  were not  prepared  in the  context  of the Stock
Splits.  It should be noted that although  Simon  Financial  naturally  reviewed
these presentations as part of its due diligence in connection with the delivery
of its fairness opinion,  Simon Financial did not rely on these presentations in
conducting its valuation analysis and preparing its fairness opinion.

     In light of the fact that the materials  prepared by the  investment  banks
are  "free"  marketing  materials  and  were not  relied  upon  either  by Simon
Financial or the Board,  the Company  believes  that the inclusion of a detailed
description of these  presentations in the Preliminary Proxy Statement and their
attachment as exhibits would be inappropriate and misleading as it would suggest
that  these  materials  contain  relevant  information  that the Board  believes
shareholders  should rely on, and would  frustrate the purposes of Rule 13e-3 by
leading  shareholders  to unduly rely on  information  that does not rise to the
level of a report,  appraisal or opinion deemed relevant under Rule 13e-3 and is
not materially related to the Company's proposed deregistration transaction.

     Please note that the presentation of Simon Financial, Inc. to the Company's
Board on August 25, 2005 is being filed as an exhibit to Schedule 13E-3 pursuant
to Items 1015 and 1016 of Regulation M-A

SCHEDULE 13E-3
--------------

2.        WE NOTE YOUR RESPONSE TO PRIOR COMMENT TWO. PLEASE INCLUDE GE CAPITAL,
          WOODCREST  ASSOCIATES,  WEBBMONT  HOLDINGS AND ROBERT FISHER AS FILING
          PERSONS.  IT APPEARS THAT THEIR ROLE AS NON-VOTING  OBSERVERS  ENGAGES
          THEM IN THE TRANSACTION. WE NOTE, FOR INSTANCE, YOUR STATEMENT ON PAGE

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Securities and Exchange Commission
Page 4

          24 THAT  "ANDREA  ASSARAT  ALSO  ATTENDED  THESE  MEETING  [SIC] AS AN
          OBSERVER   FOR  GE  CAPITAL  AND   ACTIVELY   PARTICIPATED."   IN  THE
          ALTERNATIVE,  PLEASE  EXPLAIN TO US IN GREATER  DETAIL WHY YOU BELIEVE
          HOLDING A NON-VOTING SEAT ON THE BOARD AND ACTIVELY  PARTICIPATING  IN
          BOARD  MEETING  RELATED  TO THE  TRANSACTION  DOES NOT RENDER A PERSON
          "ENGAGED."

          RESPONSE:  In  response  to the  Staff's  comments,  the  Company  has
          included  the  Related  Persons as filing  persons and has revised the
          Preliminary Proxy Statement and the Schedule 13E-3 accordingly.

PRELIMINARY PROXY MATERIALS
---------------------------

3.        WE NOTE YOUR RESPONSE TO PRIOR COMMENT  THREE.  PLEASE PROVIDE US WITH
          BRIEF LEGAL  ANALYSIS OF WHETHER OR NOT  SECURITY  HOLDER  APPROVAL IS
          NECESSARY TO APPROVE THE  AMENDMENT  TO THE  ARTICLES OF  ORGANIZATION
          AUTHORIZING  THE FORWARD  STOCK SPLIT.  TO THE EXTENT THAT THE FORWARD
          STOCK SPLIT  AMENDMENT IS REQUIRED  UNDER THE  GOVERNING  STATE LAW TO
          AUTHORIZE THE ACTION,  EACH REQUEST TO AMEND SHOULD BE IDENTIFIED AS A
          SEPARATE PROPOSAL.

          RESPONSE:  Stockholder  approval is necessary to approve the amendment
          to the Articles of  Organization  authorizing the forward stock split.
          Accordingly,  in  response to the  Staff's  comments,  the Company has
          revised the  Preliminary  Proxy Statement on page 2 and the Proxy Card
          in response to prior  Comment #3 to  separately  break out the reverse
          stock  split and  forward  stock  split as  separate  items  which are
          cross-conditioned on each other.

FAIRNESS OPINION OF SIMON FINANCIAL, PAGE 12
--------------------------------------------

4.        WE NOTE  YOUR  RESPONSE  TO  PRIOR  COMMENT  33.  PLEASE  EXPAND  YOUR
          DISCLOSURE  TO  SET  FORTH  ALL  OF  THE  FINANCIAL  PROJECTIONS  THAT
          MANAGEMENT  PROVIDED TO SIMON  FINANCIAL.  IN  ADDITION,  DISCLOSE AND
          QUANTIFY (TO THE EXTENT POSSIBLE) THE MATERIAL ASSUMPTIONS  UNDERLYING
          THE FINANCIAL PROJECTIONS.

          RESPONSE:  In  response  to the  Staff's  comments,  the  Company  has
          expanded its disclosure on page 13 of the Preliminary  Proxy Statement
          in response to prior Comment #33 with respect to the projections  that
          management of the Company provided to Simon Financial.

5.        WE NOTE YOUR RESPONSE TO PRIOR COMMENT 34. PROVIDE SIMILAR  DISCLOSURE
          FOR EACH ANALYSIS.

          RESPONSE:  In  response  to the  Staff's  comments,  the  Company  has
          expanded the disclosure on page 14 of the Preliminary  Proxy Statement
          in response to prior Comment #34.

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Securities and Exchange Commission
Page 5

FAIRNESS OF THE STOCK SPLITS, PAGE 18
-------------------------------------

6.        WE NOTE YOUR RESPONSE TO PRIOR COMMENT 13. WE ARE UNABLE TO LOCATE ANY
          DISCUSSION OF FACTORS  (I)-(IV) OF  INSTRUCTION 2 TO ITEM 1014. TO THE
          EXTENT ANY SUCH FACTORS WERE NOT CONSIDERED OR DEEMED  RELEVANT IN THE
          CONTEXT OF THIS PARTICULAR TRANSACTION, THAT FACT MAY BE IMPORTANT FOR
          SHAREHOLDERS IN ASSESSING THE  TRANSACTION AND THE COMPANY'S  FAIRNESS
          DETERMINATION.  REFER TO EXCHANGE  ACT RELEASE  NO.  17719  (APRIL 13,
          1981).

          RESPONSE:  In  response  to the  Staff's  comments,  the  Company  has
          included the referenced disclosure on page 19 to 20 of the Preliminary
          Proxy Statement.

          SUBSTANTIVE FAIRNESS, PAGE 18
          -----------------------------

7.        IT IS UNCLEAR HOW,  OTHER THAN THE FAIRNESS  OPINION,  THE FACTORS YOU
          CITE SUPPORT A FAIRNESS DETERMINATION FOR UNAFFILIATED HOLDERS WHO ARE
          BEING  CASHED OUT.  PLEASE  REVISE  THIS  SECTION TO DISCUSS THE NEXUS
          BETWEEN EACH FACTOR YOU DISCUSS AND THE BOARD'S FAIRNESS DETERMINATION
          TO UNAFFILIATED HOLDERS WHO ARE BEING CASHED OUT AND WHO ARE REMAINING
          WITH THE COMPANY.

          RESPONSE: In response to the Staff's comments, the Company has revised
          the  Preliminary  Proxy  Statement  on pages 19 to 22 to  include  the
          referenced disclosure.

          EQUAL TREATMENT OF RELATED PERSONS AND UNAFFILIATED  HOLDERS OF SHARES
          ---------------------------------------------------  -----------------
          OF COMMON STOCK, PAGE 18
          ------------------------

8.        IT IS UNCLEAR TO THE STAFF WHY THE BOARD  BELIEVES  THE SPLIT RATIO IS
          "AN  ENTIRELY   NEUTRAL   DEVICE  IN  ITS  IMPACT  ON  AFFILIATED  AND
          UNAFFILIATED  SHAREHOLDERS." SOME UNAFFILIATED  HOLDERS WILL BE CASHED
          OUT  WHILE  ALL  RELATED   PERSONS   WILL  REMAIN  WITH  THE  COMPANY.
          ACCORDINGLY,  THE  SPLIT APPEARS TO HAVE A DISPARATE  IMPACT.  PLEASE
          REVISE HERE AND THROUGHOUT THE DOCUMENT AS APPROPRIATE.

          RESPONSE: In response to the Staff's comments, the Company has revised
          the Preliminary Proxy Statement on pages 4, 20 and 35 to make clear to
          shareholders  the  disparate  impact of the Stock Splits on affiliated
          and unaffiliated shareholders.

PROPOSAL TO EFFECT THE STOCK SPLITS, PAGE 22
--------------------------------------------

9.        WE NOTE YOUR  RESPONSE TO PRIOR  COMMENT  22.  IDENTIFY  THE  "CERTAIN
          AFFILIATES" WHO MET WITH THE INVESTMENT  BANKS.  DISCLOSE THE DATES OF
          THE  MEETINGS  AND  WHETHER  THE  POSSIBILITY  OF  GOING  PRIVATE  WAS
          DISCUSSED AT THESE MEETINGS. PLEASE ADDRESS EACH MEETING SEPARATELY.

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Securities and Exchange Commission
Page 6

          RESPONSE:  In  response  to the  Staff's  comments,  the  Company  has
          included the referenced disclosure on page 26 of the Preliminary Proxy
          Statement.

                                     * * * *

     If you should have any questions  regarding the Amendments or the responses
contained in this letter, please do not hesitate to call me at (617) 570-1999.

Sincerely,

/s/ George W. Lloyd
-------------------
George W. Lloyd
Goodwin Procter LLP

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