An employer told me that there are "no funds" to be able to distribute to my fathers 2,000 shares in the ESOP???

How can this be???

Many ESOPs hold only shares and no cash. If "funds" means cash, it is not surprising that there is none. Many ESOPs provide for distribution of shares to participants, and then the recipient sells the shares to the company or the ESOP to get cash in the end.

The answer about funds also might have to do with timing. If the ESOP will distribute cash, it may do it on a particular schedule and will have cash only immediately before the distribution.

Finally, the company may be broke, so no matter how the ESOP is designed, there is no cash by any means to pay ESOP participants.

You should read the summamry plan description for the plan to try to get an understanding of where the money comnes from and when.