Help with unsolicited distribution

[Guest wetdog]

Here is my story ... Hopefully someone can help me.

I was employed with a company for 5 years and I was in their 401k plan. I left this company and totally forgot about the money in my 401k plan. A few years later this company was bought out by another comapny and the 401k plan had to be terminated. At the time of termination I had $5068 dollars in my old 401k account. The plan administrator made a distribution for me (I was considered a lost particpant) and not until 2 years later, when the IRS tried to match 1099r's with my tax return from 2003 did I have any idea that a distribution was made for me. The distribution I got was 96 shares of the company that bought out my old company. Unfortunatley since this was in the general sense a distribution I owed the IRS additional tax along with the 10% penalty (approximately $1400 all told).

My questions are ... Can the pa do this since my account was over $5000? Is there any legal action I can take against the pa for not making an effort in trying to find me? (All they had to do was do a google seach on my name and they would find my current address). I though it was their fiduciary responsiblity to a make a responsible effort in locating participants. ( they could have ask the IRS or SSA for my current address)

The other funny thing I forgot to mention is that of the $5068 dollars in my account when the plan terminated, $97 went to some holding company while $4971 was distributed for the other company's shares. This was the amount on my 1099r. That why I am asking about the $5000 limit.

Thanks for any feed back