An investigation on behalf of current investors Gander Mountain Company (Public, NASDAQ:GMTN), who purchased the shares before September 25, 2009, over potential breaches of fiduciary duty and other violations of state law in connection with an alleged unfair takeover price were announced.

The investigation by a law firm focus on potential breaches of fiduciary duty and other violations of state law by the Board of Directors of Gander Mountain Company arising out of their attempt to take Gander Mountain Company private under the given conditions. On September 28, 2009 Gander Mountain Company (Nasdaq: GMTN), announced its Intent to Go Private.Gander Mountain Company announced in order to ensure that it will be eligible to deregister its shares of common stock, in accordance with SEC rules and regulations, Gander Mountain will reduce its number of beneficial shareholders to below 300. Gander Mountain Company plans to accomplish this through an amendment to the company's articles of incorporation to effect a 1-for-30,000 reverse stock split of its common stock. After the reverse stock split, any shareholder holding less than one share will receive a cash payment of $5.15 for each share held prior to the reverse split. Immediately following the reverse stock split, the company will file a second amendment to its articles of incorporation to effect a 30,000-for-1 forward stock split. As a result, shareholders owning 30,000 or more shares of common stock at the time of the reverse split will retain their current numbers of shares of common stock without change and not receive cash in the transaction.

But according to an investigation by a law firm the transaction appears to be unfair to current investors of Gander Mountain Company (Public, NASDAQ:GMTN) because the offer appears opportunistically timed to take advantage of the current economic downturn. The investigation concerns whether the consideration to be paid to GMTN shareholders is grossly unfair, inadequate, and substantially below the fair or inherent value of GMTN and whether the directors of GMTN, including any special committee members, may have breached their fiduciary duties by not acting in GMTN shareholders' best interests in connection with the process of GMTN. Another investigation even calls the deal suspicious because it appears from a review of the Company's financial statements that the inherent value of the Company's stock is greater than $5.15 per share and because the Company is forcing the price on its shareholders without any shareholder input.

Gander Mountain Company, located in Saint Paul, MN, operates a retail network of stores specializing in hunting, fishing, camping, marine and outdoor lifestyle products and services. As of January 31, 2009, it operated 118 Gander Mountain outdoor lifestyle stores, including three outlet centers, providing approximately 6.6 million square feet of retail space in 23 states.Gander Mountain Company reported in 2007 Total Revenue of $969.40million and in 2008 Total Revenue of $1.6457billion. Shares of Gander Mountain Company (Public, NASDAQ:GMTN) traded at $5.15 per share after the announcement and at close to $3.90 per share shortly before the announcement. Shares of Gander Mountain Company (NASDAQ:GMTN) were down from its 52weekHigh of $6.49 per share and over $14 per share in 2007.