"Severance from Employment"

[Guest kkost]

Under Notice 2002-4, a "severance from employment" is deemed to occur when a target company is acquired, in a stock purchase, from its parent company if the plan stays with the selling group - notwithstanding the fact that the employees involved remain employed by the same legal entity. The rationale is that the target company doesn't "maintain" the plan after the closing.

Does anyone have any thoughts on what happens when a comapny is acquired from its individual shareholders (no corporate parent is involved) in a stock purchase transaction? If corporate action is taken to terminate the target plan prior to the closing date, does the corporation continue to "maintain" the plan after the closing date if it has been terminated and all that remains to be done is to process distributions following the receipt of a favorable determination letter?