MVRA Revisited - Expense Allocation

[Guest halka]

Previously asked for experiences/interpretation of a Mandatory Victim Restitution Act garnishment of participant's qualified plan account. In the interest of protecting the Plan and the Trustee, the Trustee contested the garnishment. Federal court has now ordered Plan to pay the garnishment (Court essentially equated the MVRA judgment to an IRS levy.) Now, the questions are:

1. Is distribution exempt from 10% early distribution penalty?

2. Can the attorney fees for contesting the garnishment be paid from the Participant's account (as opposed to a Plan expense)? And, if so, is that a distribution or an expense? THANKS