good morning your honor may have pleased her richard shader for the adler plaintiffs in twelve ninety six with andrew goldberg and brief the l a group consists of the majority of the appellant's here today and i think we're presenting the core argument i want to sixteen was found to apply your honor i think yes that's eats an either or proposition that would be the end of the case there's nothing left under five can be you're going to get you gotta win both that's correct your honor yeah just a quick summary if i may about what the case is all about just to orient us for is your right judge second a very long argument what happened here is that employees had compensation that was declared and lehman unilaterally withheld portion of it unilaterally decided what portion of their compensation would be withheld by the employees knew that going it wasn't just once but in most of the contracts that issue here yes your honor the employees did know that some portion of their compensation might be reserved but that's correct on the other far into the burger i'm annoying now your honor i'm referring to some employees who were hired by a layman before the plane came into effect putting several of the witnesses here last were treated on the part of that's correct your honor ok if that if the employees stayed with lamed for five years then they would be given some portion of they would be given stock or we're do to the employees as contract compensation we will listed that compensation in its petition under schedule g nothing to do with the stock that was promised five years down the line your honor it was the compensation that was withheld which is what the case is about unlike that diversified on the petition date there was no binding obligation to issue shares there was no binding obligation to pay anything that would have been doing five years but lehmann recognized this petition that the monies that had been withheld from the declared bonuses were due to the employees it told the employees to file claims we laymen said we've listed that compensation on our schedule is due to you we will even help you fill out your claim forms but it was the claim for for the compensation that had been withheld would distinguish is the case from the diversified i think your honor is that there was no binding obligation on the petition deed to deliver any kind of security that's not the issue the issue presented is whether the employee's interest in that withheld compensation was a security under an eighty year old definition of security that congress carefully incorporated into the bankruptcy code and in that circumstance whether it should be subordinate that's the central issue to start with the courts below subordinate we believe it seriously misreading to have a binding obligation to issue shares that's what the claimant sued and this court interpret in the phrase arising out of the purchase or sale of security the tenth circuit case the binding obligation the eat the voluntary plan was defined as one that permits employees to elect whether to participate in this case there was no election phrasing your already in a ploy a yes you elected to come to work but you did not elect to participate in the plan and employees did not elect you that you were elected to work for a particular employer who whose compensation security coming to work is not the election that comes right out of the daniel decision from the supreme court coming to work you come to work to earn a livelihood and paul shot one of the witnesses was very clear about that he didn't move to the united states  invest in security he moved to the united states to make a living you know was was this looking at the meaning of security in the context of the securities act and the exchange act we're looking at a very different context for the meaning of security in the context of the bankruptcy in which we're looking at the relative rights of creditors i see many reasons that one might apply a different definition and in fact the statute itself is judge  sac is kind of alluding to doesn't just refer to the securities act or the exchange act for definitions of securities it looks to its own definitions and has different policy reasons for constraint one way or another why is daniel so important in this context because congress in a day incorporating the definition of security specifically traced it back to the exchange act and we know from the lenders among many other cases that it's a starting point but this is a very context to agree well ok well then let's take one instance of the current different can't it's your own and that's the definition investment contract which is really a logical place to consider something called an iris you agreement and congress did change the definition of security  investment contract provision by way of saying if this investment contract is not required to be registered under the securities act then we will not consider it a security under the bankruptcy code that's illustration i think your honor of what you're what you're taught what you're saying and that is yes there were differences congress also added security of an affiliate if you care for definition to security and we know from other litigation before this court that a security  affiliate presented an issue that would not have come up into the exchanges that's correct but congress consciously adopted a definition because it had a legal a legal meaning and congress drew the his legislative history right back to the exchange act and that definition was carefully incorporated into the bankruptcy code it also been inseparable in congress was conscious about tracking the separate definition in the exchange act because  wanted the same legal pattern to be established here in that they the particular concern there was broker liquidations because some brokers are covered by supposed other brokers are not in congress one of the resolution to be the same but it was the same definition in the congress that indicated its intent to to track through the legislative well here you wonder about thank you second income groups in response to question could you could you just the microphone to it's of course right or it's a little better in response to the question that was raised earlier whether the determination of whether nora's who is in equity security is determined of all the issues in this case the response to that answer is no because claimants are asserting two bases subordination allowance of their claims as general and secured claims and one of them is the alternative performance doctrine and the alternative performance doctrine is premised upon claims that the claimants had as a bankruptcy filing da and not based upon the obvious use therefore if you are a suit is a security or an equity security or not does not dispose of the alternative formants claims that claim that does not arise from arises from the employment contract at the outset of the employment relationship lehman made a promise to its employees it made in fact in alternative promises it's told  employees that it agreed to pay and a promise to pay their compensation in cash while at the same time it reserves the discretion and the option that it might pay a portion of their event show a company be obligated to become obligated to pay cash in respect of such obligation that's correct your honor and two issues arise with regard to that i assume you're reading from the the or documents themselves it from my notes frankly that's fine you're on our big guy that was with regard to the orus use themselves yes but we submit that the evidence that was before the bankruptcy court did not establish that the claim that the claimants had that arose prior to the bankruptcy was not discharged upon the immediate issuance of the r s use there was a claim and  arose at the time possibly the earliest time of the employment contract hypothetical that's if somebody goes to work supposed to make hundred thousand dollars a year fifty thousand of it is allocated in terms of our  and then five years later they get those over as hughes and they get the stock that's represented by them and only thirty thousand dollars do they have a claim for twenty thousand but that's a different situation that than the situation here where lehman retained the discretion to decide whether it was going to issue or issues are you not like the answer to my question if they only got stock and that a current market price was worth less than fifty thousand dollars a foregone income would they have a clean it would and it would it would get and it would depend whether they had released all other rights with regard to a claim that otherwise arose at the time that they render their services or at the time in the employment contract lehman was was was careful in its documents but one thing that it did not provide for in all the employment documents was that the issuance of the r s c is was an immediate discharge and or a release of all claims that the claimants had in the ploys had on account the rendition of the services and it could have easily included that in the documents but it did not do so and that is that why that is any stronger an argument here in bankruptcy we're nothing than it would be  in my hypothetical of somebody who falls all the way through five years later they get fifty thousand dollars with a stock that they really did that they took in lieu of fifty thousand income and it's only worth thirty thousand the difference your honor i believe is that at the outset if you restrict only your rights and your remedies to the stock that you'll get then it's understandable that would be the outcome but in this situation the claimants didn't didn't restrict its options lehman didn't tell the claimants on day one as was the case in the enron case that this is the arrangement you're going to get our issues as a portion of your compensation with you or you say that that in my hypothetical lehman performed by giving the stock and in this situation lehman breached lehman lehman was not required to stock and it's our and it's our position that it was not that the grads this question to pay an enormous hugh that was merely a promise to pay in the future in addition your honor we believe that that discretion was even retained beyond the date that the it was issued the incentive plan which is controlling over any of the other documents the over the two thousand and five in particular incentive plan provided that lehman may pay in cash in various circumstances and in zero five it expanded the universe of circumstances where it could pay in cash even after it issued the r s u's and those circumstances included where required by a political law  and where required by regulation and we were required by local practice and we think that those situations either apply here or if nothing else create ambiguity is by virtue of the fact that lehman continuously and repetitively retained discretion in its favor and it wanted to retain that flexibility and if there are any ambiguity is with regard to the interpretation of the contracts in this situation we think clearly that it should be construed against lehman as the drafter of its own documents particularly when the plan was a broad based plan that was not limited only to the highly paid but includ i am here representing the neuberger berman claimants but but no i'd like to be the thing the issue that i'd like to address i believe equally is equally applicable to all of the claimants because what i'd like to talk is the question that each of you asked at some point earlier which is in effect didn't these claimants purchase securities when they came to work at lehman and i think in one way or another  and my answer that question would be no they did not and they did not because in no case did they do anything more than come to work they made no investment decisions at any point along the way so in the securities context in the daniels case and in the cases that have followed it it is clear that where an employee is simply a participant in mandatory  noncontributory plans so the employee cannot opt in or out there simply in the plan and they cannot say how much if any of their compensation will be dedicated to whatever the form of equity is in the case concerned options that concern restricted stock deferred stock in there as he's seen no action letters that include a letter to goldman sachs about a plan that it proposed which involve deferred compensation into artists use that was in every material respect the same as lehman plan in each of those situations the decision is there has been no purchase and remember purchases an element of section five ten b there's been no purchase because the employee did not have any opportunity to make an investment decision that to your question well aren't we in a different context here i would say we're not yes the securities laws are not the bankruptcy laws obviously i understand that but the specific question that's being inserted under five ten b and under the securities laws is has this individual who is making a claim made an investment decision such that he or she is is then bound by it so i was an investment  such that their claim now arises from the purchase of a security to have entered into this employment agreement that gave the employer the discretion to pay substantial portions in stock which gave your clients and the plaintiffs the substantial upsize it turned out for most of from the one nine hundred ninety four through night seven for example to continue to fast and to see that portion of their compensation gain in value perhaps well beyond what they ever imagined they would earn they had that upside now they have this downside why is that not an investment well here they don't have that downside here they never got the stock so that that's the distinction but that's not my principal answer my principal answer is twofold number one because the supreme court in the daniel case said that by going to work in hock making an investment you're going to work in earning a livelihood and it seems to me that that principle applies equally well to people who go to work at securities firms or other working as a fashion where deferred compensation and some form of equity is part of the bargain if they don't have a choice remember here unlike in iran unlike in other cases these these employees cannot say yes i want to participate in a plan which allows me to defer compensation into equity the only decision they make is to come to work they made a decision and accepting the package to begin with or at there's no question about that but what what is clear is that under dan hill and the line of the decisions that follow it and see no action letters that's not an investment decision that's a decision about employment and those are separable things and the cases that are there in the security side at least or clear that by saying yes i'm going to work at this place you are not therefore making an investment decision you're making a range of decisions quite obviously about the future of your career about the type of work you want to do  pure investment choice let me ask your hypothetical let's say a person goes to work at a company that pays more than minimum wage but pays part of the income in stock delivered right that every due week's pay package and stock let's say that there is a claim that that stock was manipulated and that the value of that was was overstated say it is odd but that is there that is what all of the cases say that arise under the securities laws what they say is that individual i'm assuming the plan is mandatory they don't make a choice you're saying that even though the person has shares of stock has its shares equity and sues claiming it was manipulated and gets a judgment that that judgment would not would be treated as an ordinary claim under the bankruptcy laws and would not be subordinated under five ten i think that's what you have to be arguing well you took your hypothetical one step further give me a minute law that is out there in the cendant case and in a number of cases in the district court here all of which say if you've got your stock in a man in a mandatory way and you didn't say how much she wanted and that is not that none of the surprises the purchases fuck but that what you're asserting is not is not is is not a clean on for recision or for damages but is a matter of simply of restitution which which has some distinct aspects to it and is based upon work performed for which no compensation with every given because because lehman breached the duty to turn over the share so every month and at the end of the year it was a simple computation that you brought x amount of revenue to the firm you're entitled to why amount of compensation well and they got part of that and they didn't get part of it i pathetically suppose that that in the bankruptcy or before the bankruptcy in the back of c lehman that actually turned over the the shoes of of stock and you think they were worth anything would you have would you have a claim i would say no i mean i know that's anomalous but it seems to me at that point women would have performed as contract assuming that lehman breached this contract and therefore it prevent stuck with with or is vulnerable and to a claim krista touche yes i don't think it's stuff they're going to pay for what they got you know they made a bargain they said if you come in here and you may bring in extra dollars or revenue we will give please the court i'm ralph miller from one ghoshal and manages on behalf of lehman brothers holdings known as l b h i the opinions below from judge chapman and judge sullivan are well reasoned thoughtful and correct they explain to independent compelling reasons that appellant's all received stock units or stock wars from a lehman brothers equity awards program should have their monetary claims reclassified as equity interests first both courts correctly ruled that section five ten b of the bankruptcy code mandates reclassification of these claims is equity interest because they're all claims for damages or rescission from the purchase of l b h i securities alternatively both courts below ruled that restricted stock units and continued stock wards are quote equity securities within the defined definition in section one hundred sixteen of the bankruptcy code because as judge sullivan put it and or as you walks talks and squawks like shares in l b h i and it's not just the two courts below who have concluded that the lehman equity awards program made equity awards many thousands of holders of or uncontested basis by not responding to objections less than one hundred equity award program participants still maintain today that they should receive can for their  thousands and thousands people recognize this is a pretty interesting and a very small number in fact among the most sophisticated and best compensated have carried all the way to this court and i want to clarify one thing that i think is very important  are here they are the ones who are here and we want to address their issues that may be one reason your honor they were also among the most sophisticated one of the things i want to make clear and i want to talk a little bit about this whole confusion over alternate performance is that what has happened is that in the bankruptcy in effect these claimants have received stock what there is of stock they have received the artist's use had two requirements for vesting they had what was called eighteen your requirement was called a loyalty requirement basically over a period of two years either four years or five years after the orus use or c s a is and i'm going to use r s use because they didn't engage in certain disparaging or improper conduct and that was if they left but if they stayed and they didn't go to work for a competitor at night or disparage the company that the loyalty they automatically turned in our shoes they couldn't be questin turned in for cash there was no there was no choice there was no election it was automatic and that's what has happened here now it's true use the observation whatever it is and however you describe it they didn't get they did it and they still have it now and let me explain it to you said you were going to explain that it's the train yes well what i was going to say is there are these two requirements the loyalty and the tina requirements the bankruptcy made it impossible for them to fulfill those loyalty and requirements so all of the participants have been treated as if they did fulfill those requirements but isn't that also a breach no your honor because we mean not fulfilling your requirements i'm sorry i don't understand the question you have a stock they have the same thing as common shareholders they have the same interest much or interest and yes let me explain and they get it they got it because what the order does is not to deny these claims reclassify them as equity interests so they still have on the books of the lehman a state's the right to the same payment as if they had gotten all the shares of stock that they were supposed to get under the r s use with their dividends or use a payment you mean issuance of sar the conversion is using the stock i mean if money should pour into the the bankruptcy estate and fill up the bucket for general creditors and pay off any post petition interest so there's money left for equity as there was for example in the american airlines bankruptcy they're going to get exactly the same equity as if they had stock certificates for their auras use it's going to get to them now we all know in this year of twenty seventeen sometimes unexpected things do happen and it's possible that that will happen but that's really that's not the legal issue here because all all that's happening is re ication there they have stock that they get stock as use it to be stock the order as you pointed out earlier the bankruptcy made it possible for them to fulfill the condition under which it would become stock because the plan administrator determined and this is in one of the stipulations we have that there were no conditions for any of the participants that have been stock that would keep them from receiving their stock that we know record i'll get it for you in just a moment yes well that they're the more important site your honor is to the order in or by judge chapman which says these are reclassified as equity interests it doesn't say there they're denied what it says is that all these people still have equity interest in bankruptcy terminology the interest is not a cl bankruptcy or you have to say it's always bought it is always possible it's happened a number of times money's continue to come in in the enron bankruptcy and i think it may actually have become solvent many many years later at some level or or almost  any of it these people have stock that's that's complete was just a confusion that was being presented to court they have the equity interest as if they had fulfilled their conditions the company continue to function they got it so happens that they can't sell at stop because there's no market for it it doesn't exist in any form it only exists as a claim and i don't know that the bankruptcy since let's say it's a it's a bank it's a it's an accounting systems that keeps track they can transfer it no but neither can other holders of common stock nope not making it there it's i'm sorry i hate to get into this but it's really true that there's actually only one share of stock left and all interests are combined into it under the plan and ministration i'm not sure i want to hear about ok anyway in any event but they have there they have their interest in the golden share as it's sometimes called just like everybody else does who had common stock and the interest is not transferable but neither are other stock interests in four to mine i mean maybe they are in any of it that's never been raised before the question becomes whether the whether the the the the transportation of the or refusing to stock was simply done you laterally by the trustee by by forgiving the conditions that that the bankruptcy had rendered impossible well whether it's unilateral or not be rendered them impossible then the other way to look at this is arguably that that they were still left with the  they never got the stock as a result of it and they did the work and the work and their and they're seeking restitution and five tended to speak in terms of restitution fact i believe it does your honor if you look at what was said in the district court opinion i think judge sullivan put it well when he said even if opponents could make a case he was talking an economic duress argument there are issues that would not take their claims out of the scope of five ten b since the claims would simply be considered claims arising event whatever claimant chooses to call it it right its rights depend on its purchase of the debtor stock and therefore arise from that purchase such that the right to relief is necessarily subordinated if you go back to the slain  article which is the source of five ten v what what professor slain encrypt he said and it made perfect sense is look if people have stock in a bankruptcy they have to get in line behind everybody else and there are a of people who either didn't get stock or claimed that they should have had more stock or they claimed that they were deceived about their stock or something else and they shouldn't get any more than if they had in fact gotten the stock so if transmute you know base lead into gold by by saying that that my claim for fraud in the stock transaction now should be treated as a as a claim along with with people who had value other than the shares your honor you're absolutely right but it is judged chapman pointed out fraud is a much more serious violation of law it's an it's intentional misconduct as as opposed to what happened here which was which was nothing except the unfortunate play out of exactly the deal these parties made they all understood within the the policy decisions in the middle verse decision which sac is is well aware of that the court pointed out that the primary purpose of five ten b is to make sure that those who assumed the position of shareholders and got the rewards of shareholders or were seeking to assume that position or tried to get that position did not get in line ahead of the general creditors who were working for without the knowledge and without that choice they but that's the whole bankruptcy system and this this so in terms of the alternate performance and five ten b and all that it's being played out correctly here because these parties are getting exactly what they bargained for they bargained for whatever the upside or downside potential was in the future of iraq and if it will be a child had been in the slot or goldman sachs was or were a  or where bank of america was and they'd been bought out these people would have gotten large fortunes for their r s u's as it turned out that wasn't the way the deal they made worked out they still are in line for whatever they're going to get they've gotten the alternate performer is there actually a way to value the our as use that would be payable when things that struck me about the difference between these claimants and your standard  creditor is that there's a some certain that is due whereas here the r s use were issued a particular time varied over over time both after the vesting date if they were held on to as well as before and it's difficult to know other than maybe harken back to what the stated compensation was at the time of issuance but that doesn't take any count of the variability that was expected affect the increase in value that was expected by all parties there's absolutely no way to value the are issues you're right your honor except to give them a value which which is very close to zero if you look at the stock price of  stock for example on the the the morning september the fifteenth two thousand and eight when it filed the stock price was virtually zero and all of these participants had not completed the process they were all as you turn into one share of stock the r s u grew with dividends over the investing period just like stock did if there was a dividend declared on common stock then the value of that dividend was applied to there are issues there were bought additional orus use fractional r s u's so when they came in so let's say say they have got five hundred or issues and they were dividends equivalent to say thirty over the five years they got you quote a five hundred thirty survives it becomes a butterfly and the are issue claimants and they are issue documents and the play and didn't have any provision for anybody to opt to stoop to be cash they couldn't stay or caterpillar and just like a caterpillar can't turn into a  honeybee they couldn't turn their stock into apple stock or anything else the only trick there are as you did was it was it was unrestricted stock that became that was it was restricted stock excuse me that became unrestricted stock that's all it ha stock yes your honor there are there are a number of cases it's did say that in fact the one that was being quoted by district court is style site marketing that which is a bankruptcy court case that points out which is a restitution plea that said restitution is merely the remedial flipside of rescission and this is what judge chapman called a cul de sac and that is that essentially whatever they call their claims because the only thing they were doing was engaging in sort of a long term purchase of common stock all all they can ever turn into is is the best that it could have been which is common stock they can't they can't say oh i didn't want common stock i want to cash it was never going to be cash and i want to i do want to address a couple of the points that were made about the whole securities law confusion here and i think judge you exactly put your finger on it that that securities laws are completely different their purpose has to do with disclosure and the daniel case is a good example international brotherhood of teamsters versus daniel it was a disclosure case about whether somebody who was not properly informed that that he had to have continuous employment get interest in an noncontributory pension plan which was which was one that the union had basically set up and the employer just paid some money and judge powells opinion first of all finds that it's not covered by security laws because your rissa had replaced it so the reason that that noncontributory pension plans today are not considered securities is largely because of a risk but more importantly as he pointed out in this is true of most noncontributory pension plans with regard to the issue of sale or purchase he said there was no fixed relationship between contributions to the fund in an employee benefits he said that if they worked there for twenty years they got a fixed benefit even the same as if people worked there for years and there was no individual contribution the employer just set up the plan and it paid there was stock element to it what was know there was nothing about stock at all in it and they were they were trying to they were trying to claim that it pynchon plan was a security for securities regulation for disclosure purposes that has nothing to do with the bankruptcy principle of absolute priority which is that the there are certain rules about which creditors take the limited funds in a bankruptcy and the people who who were trained creditors ahead of the people who have upside as well as downside and that's what the slightly picky article said it said that the people who were who had taken on the risks and had had assumed the and had the benefits of shareholders should  classified like shareholders and that's what five ten b does and that's also what happens when somebody gets some something that is like stock but not quite stock it's treated like stock that is the fact that they had labored that they had an employment contract put them someplace and if your standard stockholder that made more of a orthodox investment decision did for the person of their contract that was payable as a cash they are there is a there is a small benefit actually a priority as i understand it for a portion of a of wages it's a limited amount and after that the rest of the wages for cash would be would be paid  and would have been paid generally with other general creditors but if they were going to get payment in stock if they had stock then that is always in equity and the the reason certain that something for some of  the very large portions of their compensation maybe sixty five percent were supposed to be payable in this discretionary way well i'm i don't think there's any concern it's a good question but if you look at their the numbers that are shown in most cases that was on top of a million dollars or on top of many hundreds of thousands of dollars they're already highly paid in the testimony i'm trying to remember in terms of your review that there's a lot of fact argument here these are all facts that were presented in various forms to judge chapman and rejected after three days of hearing with six witnesses who were all participants by the way and lots of documentary evidence and she just found that these people made voluntary choices and that they they they it a finding that they did this voluntarily oh yes absolutely but that's only based upon the objective facts that you have accepted employment in a place that compensated people in this fashion judge chap a lot of quotes ms fleishman testify that she had to balance against what she would be giving up which was five years of deferred compensation or she could but she could go somewhere else that wasn't quite so with respect to the ne accepted as a condition of their employment that part of their total compensation was to be paid or issues they could have voted with their feet she also quotes from the iran decision where where the judge made the judge gonzales made the point  claimants will receive a portion of their compensation as options in that case that was a condition of employment they willingly accepted in return for their labor they thus purchase what about the neuberger it's neuberger right claimants  who weren't part of lehman at all and then found themselves pushed into lehman what choice do they have they say they had the choice not to not to go into lehman if they didn't want to and many of them pointed out that competes all this kind of preexisting superstructure with the again judge chapman dealt with that she found that the non competes were all perfectly lawful she fell in the that the correct standard to test that would be this and furthermore there was no evidence that the that the restrictions were unlawful when i cross examined people they agree they had a lot of work that they that they could do so i see that i am what i am running out of time in the well reasoned opinion says that court in the district court i think they're excellent opinions and they they tell you all you need to know and and it is important to understand that these are not den well i believe these are are particularly thorough in particularly clear in dealing with this and there was a lot of discovery allowed these people have their day in court they had a year of discovery and they  depositions of women they have what is there a time constraint on our issue a ruling in this case i just on based on well there are confirmation performance closing things down whenever there are distributions that are being made i twice a year and obviously you know in theory the sooner issues are resolved i'm afraid your honor after five years i don't i don't see a lot of humor in the way people are treated in this case i'm very surprised to hear that my clients are all these sophisticated wealthy investors you can look at judge chapman's order two thirds of the claims that she reclassified for under one hundred thousand dollars or so under five hundred thousand dollars there are more people with claims under one hundred thousand dollars and there are people with claims over a million dollars and this is not a laughing matter to them it's dead serious ok i can tell you that i plead with the court to distinguish between the hocus pocus involved in r s u and money that was withheld from compensation that's the reality here we're not talking about getting stock we're not talking about getting the value of the services they were rendered these negative services what we're talking about is compensation that laneway declared and never paid and lehmann by god recognized that in this petition and told the people you've got claims for your compensation paid me tell them to file claims i'll file proof of claim to not only you should but we are and you should find your proof  consistent with what we say in your in response to your question judge eckels about what he got paid was stark well that's a good distinction and daniel in the chain of cases following it recognize that if you get something that has the identifiable characteristics of a security then that's a big part of the element of a purchase or sale they didn't get that here they got nothing they got a contract price use the various use did have characteristics  the is there a trust that that that is a view shared sorry to the land with decision very briefly because under landreth these were not securities under the five went with criteria we feel three of them particularly in the voting rights there's not there's nothing in the record the voting rights existed let alone what portion of a share what portion of a vote and r s you got through this trust because there's no information in the record about how many shares they are as you trust held and the trust we have no information in the record about how many shares were in the trust and whether the shares were backed up i think the answer to question your honor is very seriously no that there is no there is no record of a back up of the shares honour's i want to clear up a couple of issues of confusion the issue is whether there was payment here prior as of the bankruptcy filing on account of the r s use or an account of any claims that the claimants had and there was not reclassification of the claims under the bankruptcy court so what are the reasoning that he is submitting is totally circular because the question is whether the claimants have a have a claim in the first place or whether they just have a right to equity  these are not claims for fraud and there was no vesting of the claims or of the artist's use prior to the bankruptcy the record is very clear on that that as of the bankruptcy filing these were our su's that were due to mature beginning or as user first issued in two thousand and three and subsequent years and they all had five year terms other than the orus use that were issued in mid july of two thousand eight that had three year terms so as of the bankruptcy filing none of these artists use had yet maturity the bankruptcy filing as your honor recognized rendered impossible performance on the  use and the documentary evidence that counselor fir to that the bankruptcy court relied on well in fact the bankruptcy court ignored the documentary evidence that showed that the claimants did not understand that they were going to be lehman brothers common stock at the outset because in fact the all of the employment contracts and the employee gods of my clients and i believe the others were perfectly clear that lehman retained the discretion so that they did not know on day one that they were going to be receiving payment in lehman brothers common stock they didn't know how much you know they did not know they did not know it wasn't just a question of how much but whether they would receive payment in lehman brothers common stock lehman at exercise discretion to issue arash heroes which was an indication that it was it was it was going in the direction of lehman brothers common  stock i believe it was sixty five percent for the higher paid employees a very substantial amount but there is no precedent from this court certainly to reclassify the claim of an employee for services rendered soley based upon their acceptance of employment and that's what you're talking about here the choice as to whether to issue the m r s q's was always with lehman and if the claimants had bargained for the risks and rewards of a shareholder they would not have left that choice up to lehman even after the i r s use were issued they still had discretion whether they were going to pay them in cash or not and the enron decision is immensely different from this case because in that case but if they paid them in cash would they pay have been based on the value of the shares on the enron case is immensely different from this case because there there was an understanding at the beginning of the outset of the employment that they were to be paid part of their compensation in stock options not the case here not only stock not stock options but that lehman had the option as to whether and how it was going to pay the compensation i don't understand how that makes and run different could you you're saying that because lehman retained the option to pay in cash that know that it was fair to expect also that they were going to use their discretion to be in our shoes instead of cash they have the right to exercise their discretion there's no question as to that but if somebody makes a bargain to  purchase stock they're not going to leave it up to the trader as to whether they're going to give them stock or they're going to give them something else so in this case where the option was left up to lehman in the words of the wrong decision did they bargained for the risks and rewards of those shareholder we say no they didn't bargain for those risks while they understood that it might or might not occur that's not a bargain for the risks and rewards of a shareholder and in the enron situation judge gonzales a subordinate made the claims not based on the act of acceptance of employment but because in that case in the stock options there was a choice there was a choice by the option holders whether they were going to exercise those options and they chose not to do so in that choice did not exist in this case thank you thank  just point that up for a moment that what this court said in its mid diversified decision about enron i think shows you the distinction because what this court said was that the enron claimants made decisions they had vested but an exercised options so they could have exercised the options and obtained stock they made investment choices not to do so and in therefore were in the position of a speculator or an investor the difference here is our people couldn't exercise any choice to acquire stock they simply were mandated participants in a plan and they never got to the point of earning the stock not the same as restitution restitution is an independent not the flip side again it's not the flip side it's not the flip side it is an independent remedy for breach of contract work in well it for for the value of what was  which i would say in this case is how lehman itself quantified it in the statements that it provided to its employees periodically because they said this is your total comp this is what we're giving you in cash this is what we deferred and i think that it's some certain is the amount that lehman designated as the deferred amount and i would only just add that as the neuberger claimants they were very differently position in making a sides we will reserve decision the final case on calendar is lawrence no no lawrence versus lehman brothers is also taken on submission thank you