An unauthorized collection of the records of Alternate Energy Holdings, inc., its principals and subsidiaries, and their antics, trials, and tribulations

Former AEHI CEO Don Gillispie

Former AEHI CEO Don Gillispie
OK, everyone, I've got to step out for just a minute. I'll be right back, I promise!

Monday, December 6, 2010

A Reader Question About Gillispie Divorce

An Alert Reader asks the following questions:
Very interesting, insightful, and entertaining blog. [Thank you!]
What, may I ask, do you hope to accomplish?
In the section on "Compliance with Section 16(a) of the Exchange Act" you refer to Don's "ex-spouse". What leads you to believe he is divorced?

Excellent questions, but epecially the second one.

Is he actually divorced?

Way back in 2009, AEHI Truth wondered about the 8,800,000 shares CEO Don Gillispie owned jointly with his spouse, and what would become of them in their then-pending divorce.  At the time, the Bedford County, Virginia court register showed there was a property settlement agreement and order as of May 19, 2009. 

Looking today at Virginia court records, (click the circuit court for Bedford County):
As Bob Seger would say, it's "Still the Same."  Just the Property Settlement Agreement, and no final divorce decree is shown.
Yet, when we examine AEHI CEO Don Gillispie's very late SEC Form 5 (filed March 25, 2010, but due Feb 16) we see this interesting annotation:

"Explanation of Responses:
1. Donald Gillispie and Martha Gillispie(ex-spouse) held 8,800,000 shares in a joint account, of which 7,700,000 shares were transferred to Martha Gillipise, and 1,100,000 shares were transferred to Donald Gillipie as a result of their divorce settlement." (emphasis added)
Note the date of the second transaction listed- 5/08/2009, and the code "J4".  This means that on May 8, 2009, Don Gillispie disposed of 7,700,000 shares of AEHI stock by transferring them to his "ex-spouse" (direct quote from Form 5) "as a result of his divorce settlement."  This transaction was required to be reported on Form 4 "before the end of the second business day following the day on which a transaction...has been executed," which was May 12, 2009.  (The J4 code means it is an "other disposition" (J) and "should previously have been reported on Form 4") (See Form 5 Instructions here.)

Don Gillispie and AEHI also use the term "ex-spouse" in the 10-K admitting the lateness of that and other Forms 5:
From page 36 of the 2009 Annual Report:
"Donald Gillipsie, president, Chief Executive Officer, Chief Operating Officer and Chairman of the Company, did not file a Form 5 on the timely-basis, with respect to the common shares awarded to him as compensation, and shares distributed to his ex-spouse from a jointly owned account, in the fiscal year ended December 31, 2009." (emphasis added)

The court records and these two fiilngs seem to be at odds.  The question again presents itself: 
Is he actually divorced?

More important than his marital status, though, is the disposition of those 7.7 million shares of AEHI.

Consider:  as part of his divorce settlement, he transferred ownership of 7,700,000 shares to his "ex-spouse"- worth $616,000 on the day of the transfer (at .08 per share). Presumably, somewhere in the math of the property settlement agreement, he needed to kick in around $616,000 to make it equitable. And what did he choose to give up? 7.7 million shares of his own company.
 How does that square with this recent (Sept 30th) self serving AEHI press release:

"...neither I, our CFO, board members, nor any officers who have day-to-day line responsibilities for running the company have sold a single share since the Company's inception..."- AEHI CEO Don Gillispie

Functionally, transferring shares to someone else to satisfy money owed or potentially owed in a settlement operates the same way as a sale.  If he really wanted to "speak to our strong confidence in the outlook for our business," wouldn't he have retained the 7.7 million shares in the company that is "like a son to him" (especially at the now-bargain price of .08 per share) and instead paid his "ex-spouse" the $616,000 in cash?
Look at what Don recently said in yet another press release:
"So if investors get in at the current stock price, which is about 60 cents and they are comfortable waiting awhile, the returns could be pretty phenomenal. - Donald L. Gillispie"

So Don had the chance to "stay in" at .08 and instead chose to "get out" to the tune of 7.7 million shares, which today would be worth $4,620,000.00.

Would have been a "pretty phenomenal" return, don'cha think?

Alert readers in Virginia may want to pay a visit to the Bedford County Circuit court and have a look at the original documents on file there.  Especially interesting will be the financial statements used to create the property settlement agreement.

Investors ought to know the whole story.


  1. Stockholders in Virginia hoping you can take some time off of work and make some copies and send them to the Dude. This blog is like my morning coffee and it only works because of the help and investigation from fellow shareholders.

  2. Excellent points! I'll have proof that aehi has violated rule 502(c) of the Securities Act tomorrow before the market opens. This should be an interesting week!