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Any Fix Possible for Improperly Defaulted Loans after 1099-R?

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Plan sponsor discovers participant loans were defaulted because of errors by plan sponsor (including failure to start payments) over a number of years.  The EPCRS Procedure sets out the steps the participant and employer can take in combination to fix that where there has not been a deemed distribution and 1099-R.  But what is the "fix" (1) where there has been a deemed distribution and 1099-R but no actual loan offset or (2) where there has been a deemed distribution and 1099-R followed by a termination or other event resulting in an actual offset?  If you were to go into VCP, what corrective measures would you propose?  (I understand in scenario (1), the participant can repay the defaulted loan creating basis but don't see that they gain much by doing that.)

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