Case 1:10-cv-00621-EJL-REB Document 156-1 Filed 04/11/12 Page 1 of 7

Todd Reuter, ISB # 5573

K&L GATES LLP

618 West Riverside Ave., Ste. 300 Spokane, WA 99201-5102 Telephone: (509) 624-2100 Facsimile: (509) 456-0146 todd.reuter@klgates.com

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. ALTERNATE ENERGY HOLDINGS, INC., DONALD L. GILLISPIE, and JENNIFER RANSOM, Defendants, BOSCO FINANCIAL, LLC, and ENERGY EXECUTIVE CONSULTING, LLC, Relief Defendants. MEMORANDUM OF ALTERNATE ENERGY HOLDINGS, INC. IN SUPPORT OF MOTION TO QUASH SUBPOENAS OF PLAINTIFF SERVED APRIL 6 AND 9, 2012 Case No. 1:10-cv-00621-EJL-REB

Defendant Alternate Energy Holdings, Inc. (AEHI) respectfully requests that the Court immediately quash the subpoenas of Plaintiff Securities and Exchange Commission (SEC) to Vital Funds, Inc., Corporate Strategies, LLC, and Southwest Escrow Corporation, which Plaintiff issued on the evening of April 6, 2012, and the subpoena to GT Securities, Inc, issued the evening of April 9, 2012. The subpoenas seek information that is not relevant to any of the

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factual allegations or claims in the Amended Complaint yet threatens to destroy a complex structured financial transaction with a financing component that is crucial to the survival of Defendant AEHI by effectively dragging key counterparties to the transaction into this litigation and causing them legal costs, disruption and uncertainty that would perforce be significant disincentives to proceed with the transaction. Defendant asks for expedited briefing and ruling on this Motion because the timing of performance on the structured financial transaction is imminent and, absent the relief sought, there is a very strong likelihood that the deal will not be consummated and the opportunity for critical funding lost. See Affidavit of Richard A. Roth submitted herewith as Exhibit A. The subpoenas to Vital Funds, Inc. and GT Securities concern information regarding a current phase of the complex structured financial transaction entered into in March 2012 with Vital Funds, Inc., which is part of a multi-phase financial structure, with multiple parties, whereby the implementation of each phase is dependent on the completion of a preceding phase. Each phase is also time sensitive. At this time, multiple parties to the transaction are on stand-by for completion of a phase involving Vital Funds, Inc. Due to various contractual performance timelines with each phase, delays, as well as non-completion of a phase, will likely cause the entire structure to dismantle and terminate the transaction. The subpoenas to Corporate Strategies, LLC, Southwest Escrow Corporation and also GT Securities concern a non-existent structured financial transaction that Defendant AEHI intended to enter into in December 2011, but did not materialize. Both transactions came into existence long after the filing of the Amended Complaint. AEHI publicly disclosed the current financing transaction on March 26, 2012 with an SEC Form 8-K filing (a copy of which is attached hereto as Exhibit B).

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The current structured financial transaction could provide AEHI with gross financing in excess of 11 million Euros within approximately the next thirty days, and a total financing in excess of 45 million Euros over the next 200 days. This funding is crucial to Defendant AEHIs ability to survive and prosper and significantly enhance shareholder value. Plaintiff SECs subpoenas will bring Defendant AEHIs key counterparties to the structured financing transaction into this litigation, creating legal costs for them and great uncertainty as to Plaintiffs intentions with respect to the transaction. The subpoenas

consequently create significant disincentives and delays for the counterparties to proceed with or meet the contemplated deadlines of the transaction and will most likely cause them to fail or back away entirely. Defendant AEHIs advisor in the transaction, GT Securities, a registered broker-dealer, has made it clear to AEHI that, should the subpoenas not be quashed, there is a very strong likelihood that the deal will not be consummated and the opportunity for critical funding lost. See Affidavit of Richard A. Roth submitted herewith as Exhibit A. Plaintiffs issuance of the subpoenas creates a new, major impediment to Defendant AEHIs ability to complete this funding transaction and thereby survive and prosper. Defendant AEHI respectfully submits Plaintiff has no legitimate basis in this litigation for the information subpoenaed because both transactions occurred long after the filing of the Amended Complaint and they have no relationship to any of the allegations in the Amended Complaint. Rather, they seem instead targeted for the purpose of destroying Defendant AEHIs ability to survive, which seems to have been Plaintiffs overriding objective throughout this litigation. The Federal Rules of Civil Procedure do not allow the SEC a continuing, unfettered inquiry into every ongoing aspect of the company. Matters post-dating the Amended Complaint and on their face unrelated

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to any allegation in the Amended Complaint are beyond the proper bounds of discovery especially when such discovery could gravely harm the companys business prospects. Defendant AEHI seeks immediate relief because a critical phase of the transaction is required to be completed in a matter of days and needs the approval and cooperation of key named counterparties to the transaction to accomplish same. AEHI thus requests that Plaintiffs time to respond be shortened to 2 pm MST on April 12, 2012 and Defendants time to reply be shortened to 3:30 pm, MST on April 12, 2012. As Defendant AEHI was preparing this Motion, counsel received a letter from counsel for Plaintiff SECs counsel by e-mail in the evening of April 10 that seeks, among other things, information from AEHI regarding the current transaction involving Vital Funds, Inc. and the potential transaction in December, 2011 that did not materialize. SEC counsels letter contends, among other things, that the disclosure of the transaction involving Vital Funds, Inc. in the Form 8-K does not sufficiently describe the terms and conditions of the transaction and demands, among other things, production of all of the agreements referred to in the Form 8-K or which underlie those referred to.1 SEC counsels letter highlights the issue presented by this Motion. The SEC effectively takes the position that it has ongoing unfettered and roving authority to continue to subpoena information regarding any and all transactions and activities of AEHI, even where, as here, they have nothing to do with the allegations of the Amended Complaint. Defendant AEHI

respectfully submits that the SECs authority is not so unfettered. The issues for trial are framed by the Amended Complaint and the Answer to it. The SECs attempts to subpoena and demand

SEC counsels April 10, 2012 letter contains additional erroneous contentions regarding AEHIs reporting of expenditures, but they are not relevant to this Motion and will be addressed separately with SEC counsel.

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information outside those issues lack substance and should be curtailed. In this context, as explained above, the SEC should have no authority to continually subpoena records from third parties related to transaction unrelated and irrelevant to the events alleged in the Amended Complaint. Its subpoenas with respect to transactions that post-date and are irrelevant to the alleged events threaten to destroy the company by intimidating third parties from doing business with the company -- even with respect to matters that are vital to its continued operation. In these circumstances, Defendant AEHI respectfully requests that the Court not only quash the subpoenas, but make clear the limits on the SECs use of subpoenas. For the foregoing reasons, Defendant AEHI respectfully requests that the Court immediately quash the subpoenas in order to remove the specter of uncertainty they cause to AEHIs financing transaction. DATED this 11th day of April, 2012. K&L GATES LLP By /s/ Todd Reuter Todd Reuter, ISB # 5573 Attorneys for Defendant Alternate Energy Holdings, Inc. Email: todd.reuter@klgates.com K&L GATES LLP 618 West Riverside Ave., Ste 300 Spokane, WA 99201-5102 Telephone: (509) 624-2100 Facsimile: (509) 456-0146 AND Charles R. Mills, Pro Hac Vice Barry M. Hartman, Pro Hac Vice Nicholas G. Terris, Pro Hac Vice Andrew R. McFall, Pro Hac Vice Christine Jochim Boote, Pro Hac Vice Email: charles.mills@klgates.com

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Email: barry.hartman@klgates.com Email: nicholas.terris@klgates.com Email: andrew.mcfall@klgates.com Email: christine.boote@klgates.com K&L GATES LLP 1601 K Street, N.W. Washington, D.C. 20006-1600 Telephone: (202) 778-9000 Facsimile: (202) 778-9100

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 11th day of April, 2012, I filed the foregoing electronically through the CM/ECF system, which caused the following parties or counsel to be served by electronic means, as more fully reflected on the Notice of Electronic Filing: Susan L. Lamarca, lamarcas@sec.gov Attorney for Plaintiff Tracy L. Davis, davistl@sec.gov Attorney for Plaintiff David A. Berman, bermand@sec.gov Attorney for Plaintiff Robert L. Tashjian, tashjianr@sec.gov Attorney for Plaintiff Joseph Todd Reuter, todd.reuter@klgates.com Attorney for Defendant Alternate Energy Holdings, Inc. Andrew R. McFall, andrew.mcfall@klgates.com Attorney for Defendant Alternate Energy Holdings, Inc. Barry M. Hartman, barry.hartman@klgates.com Attorney for Defendant Alternate Energy Holdings, Inc. Charles Roe Mills, charles.mills@klgates.com Attorney for Defendant Alternate Energy Holdings, Inc. Christine Jochim Boote, christine.boote@klgates.com Attorney for Defendant Alternate Energy Holdings, Inc. Nicholas G. Terris, nicholas.terris@klgates.com Attorney for Defendant Alternate Energy Holdings, Inc. John Janis, johnjanis@aol.com Attorney for Defendant Donald L. Gillispie and Relief Defendant Energy Executive Consulting, LLC Richard Alan Roth, rich@rrothlaw.com Attorney for Defendant Donald L. Gillispie Jordan M. Kam, jkam@rrothlaw.com Attorney for Defendant Donald L. Gillispie Charles F Peterson, Jr., cfpeterson@mac.com Attorney for Defendant Jennifer Ransom and Relief Defendant Energy Executive Consulting, LLC

K&L GATES LLP

By /s/ Todd Reuter Todd Reuter, ISB # 5573 Attorneys for Defendant Alternate Energy Holdings, Inc. _

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