{"id":104,"date":"2018-02-12T21:07:14","date_gmt":"2018-02-12T21:07:14","guid":{"rendered":"https:\/\/www.sherin.com\/employment-blog\/?p=104"},"modified":"2021-06-10T19:16:42","modified_gmt":"2021-06-10T19:16:42","slug":"beware-in-bankruptcy-equity-compensation-treated-as-equity-not-compensation","status":"publish","type":"post","link":"https:\/\/www.sherin.com\/employment-blog\/2018\/02\/12\/beware-in-bankruptcy-equity-compensation-treated-as-equity-not-compensation\/","title":{"rendered":"BEWARE: In Bankruptcy, “Equity Compensation” Treated As Equity, Not Compensation"},"content":{"rendered":"

In a January 25, 2018 decision, In re: Lehman Brothers, Inc.<\/em>, the Second Circuit of the United States Court of Appeals upheld a lower court decision that restricted stock unit (RSUs) claims filed by former Lehman Brothers employees were securities claims, not creditor claims – putting the compensation claims behind the claims of creditors.\u00a0 The Second Circuit accepted the lower court analysis that the employees “had … a choice” regarding compensation terms, which in our experience is often not true.\u00a0 In reliance on the notion of choice, the Second Circuit agreed that, “Because [the employees] assumed the risk and reward expectations of shareholder when they agreed to receive compensation in the form of RSUs, [their claims] must be subordinated.”<\/p>\n","protected":false},"excerpt":{"rendered":"

In a January 25, 2018 decision, In re: Lehman Brothers, Inc., the Second Circuit of the United States Court of Appeals upheld a lower court decision that restricted stock unit (RSUs) claims filed by former Lehman Brothers employees were securities claims, not creditor claims – putting the compensation claims behind the claims of creditors.\u00a0 The […]<\/p>\n","protected":false},"author":9,"featured_media":109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[],"tags":[],"class_list":["post-104","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nBEWARE: In Bankruptcy, "Equity Compensation" Treated As Equity, Not Compensation - Employment<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sherin.com\/employment-blog\/2018\/02\/12\/beware-in-bankruptcy-equity-compensation-treated-as-equity-not-compensation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BEWARE: In Bankruptcy, "Equity Compensation" Treated As Equity, Not Compensation - 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