L1B Petition denied when company got separated from parent

[rayoflight]

I came to the US from India on L1B for a Product Based company after working in India for the same company for 3+ years. I got valid stamp on my passport till Septemboner 2018. I was granted admission in the US and my I-94 is also valid till September 2018.
My division in the company got separated into a new privately held company in October 2015 and hence my employer filed for a I-129 petition for L1B visa (I guess due to change in the employer due to separation). The petition was filed in December 2015 and I received an RFE on it. Our lawyers responded to the RFE questions on 13-Jan-2016 and today (26-Jan-2016) I am seeing a denial on USCIS website for the petition.
My questions now are -
1. Can I stay in the US as I still have a valid visa and I-94?
2. If I leave US now, will I be able to come back on the already stamped valid visa? OR I need a new L1B visa with the new company now?
3. What are my other options?
4. Can I apply for H1B (which employer has already agreed to do) and hope that I get picked up in H1B lottery and apply for COS from L1B to H1B while in the US?

Appreciate any comments/suggestions.

I am kind of mad as there was no need to apply for the I-129S as I already had a valid L1B. I guess employer did that just as a due deligence but it has backfired.

[rayoflight]

Will appreciate any advice regarding this

Yet to hear from company lawyers

[raghvi]

I came to the US from India on L1B for a Product Based company after working in India for the same company for 3+ years. I got valid stamp on my passport till Septemboner 2018. I was granted admission in the US and my I-94 is also valid till September 2018.
My division in the company got separated into a new privately held company in October 2015 and hence my employer filed for a I-129 petition for L1B visa (I guess due to change in the employer due to separation). The petition was filed in December 2015 and I received an RFE on it. Our lawyers responded to the RFE questions on 13-Jan-2016 and today (26-Jan-2016) I am seeing a denial on USCIS website for the petition.
My questions now are -
1. Can I stay in the US as I still have a valid visa and I-94?
2. If I leave US now, will I be able to come back on the already stamped valid visa? OR I need a new L1B visa with the new company now?
3. What are my other options?
4. Can I apply for H1B (which employer has already agreed to do) and hope that I get picked up in H1B lottery and apply for COS from L1B to H1B while in the US?

Appreciate any comments/suggestions.

I am kind of mad as there was no need to apply for the I-129S as I already had a valid L1B. I guess employer did that just as a due deligence but it has backfired.

1. No you cannot as the underlying petition itself is not valid.
2. You would need to get a new visa stamping. The new company would have to apply for a new L1 Blanket petition if eligible or file a L1 Individual for you. I also think you need to work with the new entity at their non US location outside US for at least 1 Year in order to be eligible for fresh L1.
3. Dont see many as the company that you working with is no longer associated with the original company for which the L1 Blanket was approved.
4. Though they can apply H1, but as L1 itself is denied, you should leave US and if H1 approved then re enter with H1 stamping (earliest Sep End 2016).

What your employer did was correct in applying afresh I129S. The issue is the separation of the company, which I dont think you could do anything about, but you should have typically initiated the discussion with the employer's attorney prior to the separation as to how the L1 situation would be planned for.

This is my opinion not legal advice.

[rayoflight]

Response

Thanks so much for your response, appreciate it.
Couple more questions -
1. Can I go to and work for the parent company (from which my division got separated) whose name is on my visa and I-129S currently?
2. Can my lawyer contest the denial? If yes, can I stay in US while the case is pending?

Thanks much in advance.