Exhibit 5.1


                          REED SMITH SHAW & MCCLAY LLP

                               1301 K Street, N.W.
                             Suite 1100 - East Tower
                           Washington, D.C. 20005-3317
                               Phone: 202-414-9200
                                Fax: 202-414-9299





                                           April 30, 1999


Phoenix Healthcare Corporation
4514 Travis Street, Suite 330
Dallas, Texas     75205


                  Re:      Registration Statement on Form S-8 for Stock to be 
                           Issued Under the Phoenix Healthcare Corporation 1999 
                           Stock Option Plan, Stock Purchase Plan and Share 
                           Award Plan, and Pursuant to Certain Employment 
                           Agreements (the "Plans")

Gentlemen:

                  We have acted as counsel to Phoenix Healthcare Corporation
(the "Company") in connection with the above-captioned Registration Statement
relating to 14,400,000 shares of the Common Stock, par value $.001, of the
Company (the "Shares") which may be offered or sold to certain employees,
directors and consultants of the Company and its affiliates under the Plans. The
Plans provide that either unissued or reacquired Shares, or any combination
thereof, may be awarded under the Plans. In rendering our opinion below, we have
assumed that any previously issued Shares reacquired by the Company and used
under the Plans were duly authorized, validly issued and fully paid at the time
of their original issuance.

                  In connection with this opinion, we have examined such records
of the Company and other documents as we have determined relevant and necessary
as the basis for the opinion set forth below. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies.

                  Based upon the foregoing and upon an examination of such other
documents, corporate proceedings, statutes, decisions and questions of law as we
considered necessary in order to enable us to furnish this opinion, and subject
to the assumption set forth above, we are pleased to advise you that in our
opinion:

                  (a) The Company has been duly formed and is a validly existing
corporation  under the laws of the State of Delaware; and

                  (b) The Shares being registered and which may be offered or
sold by the Company pursuant to the provisions of the Plans have been duly
authorized, and upon such sale in accordance with the provisions of the Plans
such Shares will be validly issued, fully paid and nonassessable.





REED SMITH SHAW & MCCLAY LLP




Phoenix Healthcare Corporation
April 30, 1999
Page 2


                  We hereby consent to the filing of this opinion as an Exhibit
to the Registration Statement and to the use of our name in the Prospectus under
the caption "Legal Opinion".



                                                   Very truly yours,


                                                   Reed Smith Shaw & McClay LLP