Valid I94 but H1B extension is denied


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I have a situations where my H1B transfer with Company B is approved but my extension was denied. Reason it was denied because I was in India for vacation at the time of H1B transfer/extension with Company B made.

I also have I94 from my old employer which is valid until 2015.


My question is, am I legal to stay in the country and continue my job with Company B since my transfer is approved and I have a valid I94?


If not, what are my options? Thanks in advance for your reply.

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Thanks for the reply. 


Reason why my extension is denied is because USCIS quotes "I was out of country during the extension is requested".

I still have valid I94 because I entered the country on Sep 25th 2013 (through my previous employer visa) and got new I94 and so I have it valid until 2015.


My attorney says we can apply for H1B amendment stating that I am now in the country and re-request for the extension approval. He is also staying I am legal to stay in the country as I have valid I94 and Visa from my previous employer which is valid until 2015.


Is that correct?

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