L1B to H1B trf with a valid L1 I-94

[Aveerar]

Hi there. I am presently working in the US having a L1 visa. The L1 visa expired in OCt 2011 however I have a valid I94 till March 2013. Meanwhile my employer has applied for a H1B visa under premium processing. I have the following questions:

1. If my H1B visa is approved, Am I legally allowed to work based on my L1 I94 till my H1B visa is petition takes effect in October 2012?
2. If my H1B visa is rejected for some reason, will it impact my stay in the country using my L1 visa I94 which is valid till March 2013. Will be allowed to stay and work in the US till March 2013?
3. Will the last action rule apply and will my I94 be negated in case the H1B petition is not approved?

Please respond and put my out of my misery. Thank you

[shervin143]

1. If my H1B visa is approved, Am I legally allowed to work based on my L1 I94 till my H1B visa is petition takes effect in October 2012?
>>> Yes.

2. If my H1B visa is rejected for some reason, will it impact my stay in the country using my L1 visa I94 which is valid till March 2013.
>>> No.

Will be allowed to stay and work in the US till March 2013?
>>> Yes.

3. Will the last action rule apply and will my I94 be negated in case the H1B petition is not approved?
>>> Last action rule doesn't work that way. It only applies when you have multiple approvals. If H1B is rejected, you will remain to be in L1 status until the L1 I-94 expiry date.