ADP corrective distributions for wrong amount

[DMcGovern]

Large 401(k) plan Sponsor submitted a file to the investment company (also a directed Trustee for the plan) for corrective distributions. Later that day, it was discovered that 3 of the people listed were catch-up eligible for a portion of the amount and the investment company was notified of the changes. The investment company confirmed that they would process the corrected amounts.

Several days later (and before the 3/15 deadline), one of the 3 participants called the contact person at the Sponsor to tell him that he received a larger check than anticipated. Note the investment company did not notify the Sponsor of this error. Turns out all three participants have cashed the checks and the investment company is saying they will issue two 1099Rs - one for the smaller corrective distribution amount, and the second one for the extra amount, coded as "E", excess annual additions. Somehow this does not seem right. It seems correction should be the investment company's responsibility.

What would be the best way to fix this?

Thanks for your insights!