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dylatess, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5156
Experience:  37 plus years of experience specializing in bankruptcy law
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Hi. My question relates to restricted stock units issued by

Resolved Question:

Hi. My question relates to restricted stock units issued by a company that subsequently goes into bankruptcy. In this case, I am referring to Lehman Brothers. I am a former employee and had a significant amount of RSUs that had not vested at the time of bankruptcy. My understanding was that non-qualified plans (RSUs were issued pre-tax and therefore were part of a non-qualified plan) were treated an senior unsecured creditors of the firm. However, the bankruptcy court has reclassified my claim an a senior unsecured creditor to that of an equity holder. Can you tell me if the court is correct or should I file an objection to the reclassification. Thanks in advance.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  dylatess replied 5 years ago.
Over 33 years, I have assisted my clients with debt problems having filed more than 32000 Chapter 7 and Chapter 13 Bankruptcy petitions. Though you are probably correct ini your understanding about how the stock units were classifed pre BK, it is a whole new world once the BK was filed. Likewise, the teh US trustee and the trustee assigned the case has the burden of finding some equitable solution to making a distribution of what remains to the creditors and at the same time trying to treat everyone fairly. Therefore, it is not unusual to see certain assets reclassified. however, you may want to speak to other debtors/former Lehman employees with similar claims. And together, and with counsel, you may want to consider filing an objection. But doing so solo will probably prove to be an expensive and frutrating path to take.

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