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"Asset or stock purchase?" is my standard initial question when a sale or acquisition is under discussion. Since you don't know which is was, no one can tell you for certain what should have been done. If it was an asset purchase, the OP company's action of immediately stopping deferrals and loan payments was proper. The employees are no longer employed by the plan sponsor and their new employer had not adopted their prior employer's plan. If the asset purchaser later decides to adopt the other company's plan, then they start deferrals and loan payments again. We had that situation happen with a client that went bankrupt. The company that bought their assets decided a couple of months after the purchase to adopt the old plan. If it was a stock purchase, then as mentioned stopping deferrals without amending or terminating the plan is a problem. With a stock purchase, the purchaser becomes the plan sponsor unless the plan is terminated prior to the sale.