Hardship withdrawal from "frozen" account

[Guest IPound]

A division of a company was sold. The employees affected by the sale had prior to a certain date the opportunity to 1) take withdrawal from current plan; 2) rollover to new purchasing employer plan; or, 3)leave money in old plan. If #3 was chosen, money cannot be distributed from old plan until participant terminates from new acquiring employer. No loans are allowed from accounts left under old plan according to plan document since repayment is by payroll deduction and only to parties-in-interest.

Plan also allows for IRS safe harbor reasons.

Question: can a hardship distribution be taken to purchase home by former employee who left money in old plan?

Definition of participant is "eligible employee...whose participation has not been terminated." eligible empoyee is "..person employed by Company.." Company is defined as the old employer and any successor employer.

Follow-up question: Assuming that somehow the answer will be that a hardship withdrawal is allowed, how is the 12 month suspension of salary deferral applied since the withdrawal did not come out of the acquiring employer plan?