An investigation on behalf of current investors Cavalier Homes, Inc. (AMEX: CAV), who purchased the shares before June 15, 2009, over possible breaches of fiduciary duty and other violations of state law by the board of directors of Cavalier Homes Inc.

According to the investigation by a law firm the investigation focuses possible breaches of fiduciary duty and other violations of state law by the board of directors of Cavalier Homes Inc. (AMEX: CAV) arising out of their attempt to sell Cavalier Homes to Southern Energy Homes, a wholly owned subsidiary of Clayton Homes. Cavalier Homes, Inc. announced on June 15, 2009 that its Board of Directors has entered into a definitive merger agreement for Cavalier Homes to be acquired by Addison, Alabama-based Southern Energy Homes, Inc. Under the proposed agreement, Cavalier shareholders will receive $2.75 for each outstanding share of common stock. The deal is valued at approximately $48 million. Upon completion of the transaction, Cavalier Homes, Inc. will become a wholly owned subsidiary of Southern Energy Homes.

According to the investigation the price is unfair given that Cavalier Homes has $1.50 per share in cash, a book value of $2.99 per share and at least one analyst set a price target for Cavalier shares of $4.00 per share.

Cavalier Homes, Inc. is engaged in the production and sale of manufactured homes. Cavalier Homes designs and manufactures a range of homes with a focus on serving the low- to medium-priced manufactured housing market in the South Central and South Atlantic regions of the United States.Cavalier Homes reported total revenue of $ 206.88million in 2007 and a total revenue of $164.41million with a net income of $3.23million in 2008. Shares of Cavalier Homes, Inc. (AMEX: CAV) traded on Monday at $2.71 per share, down from a 52weekHigh of $5 per share and over $7 per share in 2006 and over $8 in 2005.