Final 5500 - company bankrupt

[Lou S.]

A plan with roughly 140 eligible participants on 1st day of the year but 401K only and approximately 50 participants with balances.

Clearly by definition the plan requires an audit and has filed one historically.

In the last year of the plan the sponsor goes bankrupt and pays out all participants.

If the sponsor has no funds to pay an auditor and the plan has paid all benefits to participants, what do you do?

File Final 5500 with no audit?

Obviously if someone comes up with money for auditor this is not a problem but this can't be the first time this has come up.

[chc93]

In a case that we had a few years ago, the bankruptcy trustee, appointed by the court, paid all necessary fees related to the plan. I think the backruptcy process got all company assets so he had funds to pay such fees. However, if I recall, there were "timing" issues with bankruptcy filing, our service period, and our invoice "date". So one invoice for services prior to the bankruptcy filing ended up as a "creditor in line" which we didn't get paid. But all of the plan termination fees, including our fees and I think the auditors fees were paid by the bankruptcy trustee. All 5500's with audit reports were filed timely.