Guest KRS401k Posted February 4, 2011 Posted February 4, 2011 Company A has financial problems so Company B comes in and purchases A and keeps the company name. After the purchase B terminates some employees and then rehires them back a few days later. Employees still have money in A's plan. Can A's plan terminate or would it be considered a takeover? Is there other questions/information we should find out? Thanks!
david rigby Posted February 4, 2011 Posted February 4, 2011 Did buy/sell agreement mention how the plans would (or would not) be included? Stock purchase or asset purchase? If stock purchase, then B has (probably) become the sponsor of Plan A. Depending on how many EEs terminated, then a partial termination may have occurred (100% vesting for those affected, w/o regard to whether they were rehired). If not a stock purchase, then does A still exist? If so, then it (probably) remains the sponsor of plan A. If A is bankrupt, then the plan might automatically be terminated (100% vesting for all participants). Why didn't A and/or B discuss this w/ legal counsel first? (Oh, don't bother with that Q.) I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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