commissions for which no are issues were granted and for which no right to equity was issued should be subordinated under five ten b we submit they should not be the rule in the circuit is and i'm taking the quote from market x t case it is black letter law that claims are analyzed as of the date of the filing of the petition and now the snow quote a so called snapshot view where you look to the status of the claim claim as of the petition date controls the subordinat your clients had no rights use that's correct your honor as of that date our clients had no our issues and had no right no enforceable right to equity so this snapshot approach requires that the right that the claimant have the rights employer privileges of equity ownership now these opponents are former production based employees with earn commissions that were withheld by lehman as part of their total sales compensation  money sitting in a lehman bank account these aren't commissions are part of the employee's total sales compensation this was money that was withheld on a monthly basis and if you take a look at their compensation statements it's it's in cash and so as of the petition date it's you know if you look at that compensation statement you you see a few lines i guess seven monthly right that's where we are this is yes this is this is a monthly statement where it states the total sales compensation years the equity of cruel calculated was essentially earn commissions are withheld and at year end our shoes were granted but here we would be broken up by month with the rules not starting each each month these employees produced a certain amount in sales and they got compensated through commissions on those sales but part of the commission was set aside for year end and so these compensation statements were issued on a it was just sitting there in a bank account and that's what these what the employees here are seeking were seeking to recoup the cash that was withheld by lehman for which no our shoes are attached number two for example two thousand and three thousand that's actually cash sitting in a counselor or is that just a notation my understanding is that's cash sitting in an account somewhere that's commissions already earned by the employee is that in this circuit the rule is what are you on the petition date are you creditor is something else here your creditor because you had the employees here had no in right to receive ours use that was a right that was within the discretion of ok we're going to treat these commissions as we're going to convert them to our shoes or we may pay you in cash but it wasn't a right that the employees had the employees had the right to be compensated and on the petition date they had a right to the cash that was withheld from their total sales compensation as described in this compensation statement it was an expectation that they would receive or is use your honor that's not really the issue whether they had an expectation unlike in the decision where the courts are as you holders had an expectation like that of a shareholder because they had voting rights they had a right to dividend but most importantly the our shoes were tied to the value of lehman stock here we don't have that we don't have any of that so there were no expectations there was an expectation that they were going to be compensated and on the petition if you take the snapshot approach which was applied in market x t which was also cited with approval by judge sheindlin a lehman bankruptcy case where she said on the day the petition these claimants held lehman bonds and she cites market x t and this court affirmed that decision so the you're leaving and your employer owes you those commissions and they haven't converted to use yet i believe that they would be entitled to cash but that's not what we have here we have a way of working i'm sorry cash sitting in an account which is demonstrated by the compensation statements and we don't have any securities we don't have security holders my right even if you get the or it's use if you left before the five y period you get nothing i believe that's correct but we're not talking about employees that got our shoes we're not talking about security holders here this is not like the lehman decision issue decided by the score last year all the claimants there were are as you holders here we don't have equity holders and this court in med diversified said yes we have to interpret five ten b broadly but the court also noted that there are limits to this and  looked at the factors what how do you submit diversified with focusing on people's expectations and looking at it from the way at least favorable to your position your client's greed to to to  perform services in exchange for compensation that would at the election of lehman be paid r s u s that's right your honor at the election of lehman but on the petition da know enforceable right to get cash i'm sorry this agreement says that there is no in force and right it says there is anything other than or its use if that's what lehman wants to give you right there is no enforceable right to cash after  are granted and this court in the in the l b h i decision or an argument was an alternative performance argument was made where they said well they are issues have invested so we're entitled to cash the court cited  to program documents in maine made a note to say you're not because you have already been granted our shoes here that's not the case once you're granted our shoes you're entitled to stock if you stick around for five years but here you we're not even there yet we're not we're not holding a security issue still to be decided you know the issue in place whether whether you're a security hold or not know that it's well i  circuit which is you look to the status of the claimant as of the petition date do you have a forcible right to equity do you hold a security and we don't have that here amounts withheld were not intended to be paid in our us use intended by whom i lehman brothers who was just as your honor pointed out is the sole purpose the sole party here that had the ability to think that decision  but the decision was not made i mean lehman could have decided that their stock is sufficiently excessively diluted and they'd rather pay people in care could could have done respectfully i would have to disagree and i'm going to p court to what is appendix page seven twelve this is the document that each of the opponents received laying out the two thousand and eight equity accrual schedule which says for these claimants th portion of the two thousand and eight total compensation delivered in the form of an equity award for the full year will be calculated the schedule below any year and a war will be determined by subtracting your july are a series which were pretty when it became  apparent that lehman had some trouble they kind of prepaid parts of people's bonuses and commissions so any year end award will be determined by subtracting your july our series from your full year award but in no event will your full year award be less than you  paying cash well i think that if you if you look at the schedule it's not that they were not there they would be determining that they would be doing cash and sort of our issues it would be that the claimants performance had gone down to the point where anything they wouldn't get anything exactly if they were going to get anything at the end of the year as the schedule lays out this is the amount that would be paid what do you make of the extensive passage in the in in the prior case and and and and benefit from dividends these pointers don't have anything or they all they they're all their sum total is that they were paid or as you say they weren't paid cash and they didn't have any of the to is was frequently hundred percent of their of their cash of their of their contractual compensation absolutely your honor and for but for the bonus claimants lehman brothers did have the discretion to not pay them any amount of to you know i honestly do not know i think to some extent this is because unlike the discretionary bonus employees the crude equity or the performance based employees such as the ones in question not aware that any of the seven appellant they want the base salary and they have to keep body and soul together through the year and they would then it would make sense for them to groom and yes exactly your honor and of course part of their part of their compensation was also paid  somehow changed its mind and these people had the women brothers changed its mind in which case they would have worked again i don't think it's totally clear and i i'm sorry on the filing date lehman brothers was bound if you will by the compensation agreement that they would get ours use of you yes the latter your honor and what they had as an expectation that they would receive the risks and returns of a shareholder they didn't have a right to demand cas in the future in the future yes your honor and and when we look to find out whether somebody is expectation of taking on the risk of returning in the  future constitutes security in the present well your honor i think that you could look to these either being securities as i think the court gave a nod to during the l b h i decision or you could look in the in the language of section five and b which says that they have to of rise from the rescission or damages relating to the purchase or sale of a security so there is no debate here that our assumes our securities and here the only thing they had entitlement to the only thing they had a right to  said a few minutes ago that they have the expectation of getting security subject to the decision by the lehman brothers to give them i believe that lehman brothers had already made them that made that decision and that's why it was on the day they declared bankruptcy no your honor in giving out the monthly statements in the program documents that i cited too and in the other underlying agreements that this was already a decision that lehman brothers had made and it was clear to the withheld in the sense that it was not paid but there was no bank account or there is no evidence that there was a bank account sitting somewhere with what difference does it make i mean lehman doesn't keep its money in a mattress and it's somewhere it was cash in terms of even if it was in a mattress it would be cash so why does it matter if it was segregated or in separate account well it does matter in terms of the second part of the test which is whether or not equity holders had a right to rely on that cash was not sitting segregated somewhere where they could have a right to demand it instead this was something that was used as the capital of lehman brothers inc and and shareholders had a right just want to address the question that you had on compensation statements and what this equity of cruel means you couldn't determine the number of hours use that were going to be granted for these withheld commissions until the compensation committee set a grant price so for example let's say at the end of the year you had ten thousand dollars and withheld our commissions and the grant price was ten dollars then you knew at that point you're going to get a thousand are issues that's correct you guys it was a price that was set by the compensation committee but that couldn't be determined till your so what you're looking at in the compensation statement it has no connection whatsoever to our issues until year and grant date why isn't that really cut against you because what it means is that they're going to get more as you and whatever the value is lehman stock at that time is going to determine into how many hours use the the the the accrued and unpaid earnings would be translated and that means they were taking the risk on the downside i disagree with what it means is that there's cash that's being withheld from your commissions and at the end of the year as your honor noted lehman decided are we going to are we going to use these commissions and convert them into our issues are we going to pay them in cash and this goes to the you know the privacy it was already it was already settled that it was going to be converted into or as well maybe lehman thought that it was but that wasn't that wasn't a right that the employees had they had no legal combined base salary bonus and other compensation maybe payable in the form of conditional equity securities restricted stock units stock options or other equity awards it was lehman's discretion how it was going to pay its employees and that's important here because even even that being the case why no i perhaps all you're saying though is that is that what your clients had was just an expectation of getting our ass using an expectation of getting securities after all we don't always get what we expect even but it's still an expectation that they had an expectation is not how you look at the rule in this court it's not for the score to guess what lehman would have done in the future that's why we have this so called snapshot approach where we say did you have a right to equity on the petition date did you have ownership of an act of a security on the petition date on the petition did i ask your adversary what they had was cash cash withheld from them that was owed to them part of their they had cash with held and they didn't have it while it was withheld right it was they they had a right to receive compensation in the form of cash that's what the employees are seeking today to recoup the cash that was withheld from them and they have had a right to get compensation in the form of cash if as you just said lehman had a right to decide that they would get over its use anyway while they  did have or they had or they had a right to either say you're going to get our shoes you're going to get cash but on the petition to these employees were general creditors just like everyone else and the final that's a deduction i mean that's an inference drawn from fact what did they have