Bankruptcy/Successor Plan?

[Guest AndyL]

ABC Corp, owned 100% by John Doe, shut its doors earlier this year. ABC Corp sponsors a 401k plan. There have been no 401k deferrals made since then and all of the employees were let go involuntarily. The Plan has not formally been terminated yet.

DEF Corp, owned 100% by Jane Doe, opened its doors a few weeks ago. Jane Doe is married to John Doe and it is not known if they have any children. Jane would like to start a 401k plan. Most of the DEF employees used to work for ABC.

There may be some bankruptcy concerns with John and/or ABC Corp.

Are John and Jane better off terminating the ABC 401k plan or better off having DEF become the new sponsor of the ABC plan?