Missing Trustee (and assets)! How to "distribute"/correct?

[ERISAatty]

Odd situation here.  Just wondering if anyone has any insight.  Two business partners had a 401(k)/profit sharing plan.  The two owners were the only employees/participants.  Each owner oversaw the investment of his own plan investments. A couple of years ago, one of the partners had some significant life changes and left the business.  (Possible mental health issues present). Business was reorganized to now have only the single, remaining owner. The problem is that the former owner (I'll call him Bob) hasn't provided any detail (and has ignored/rejected multiple requests) on his plan account investments since then. Remaining owner wants to make sure plan is in compliance.  Because Bob won't provide info (and has probably spent his assets), we don't know how to handle formalizing the distribution of his plan assets (which are not under the control of remaining owner). Do we 'deem' those amounts distributed at some point? Even if we do that, we don't have the assets from which to take withholding. Do we deem them rolled over? To where/whom? Trying to figure out what to do so that the distribution to Bob can be documented, and because distribution (after termination of employment) is required by plan.  I have called around to try to get informal input from DOL and IRS.  DOL not interested, since no non-owner participants involved.  IRS contacts had varying views.  Once said ' get into Audit Cap, like yesterday.' Another said, that it seems more like a tax issue for Bob, and less of a Plan qualification issue.  I'm stumped on how to correct. Remaining owner wants to do things right.  Any suggestions/insights? 

[Mike Preston]

Lots of detail missing.  And it matters.  If both were Trustees then as of the date that Bob left the business, remaining owner should have invoked document procedure to remove Bob as Trustee and taken control of all of those assets.  Still can be done, but may be more difficult to corral the assets at this point, especially if a distribution has taken place.  Contact whoever was doing the 5500-EZ (or -SF) and see if you can establish where the assets were (i.e, at what financial institution) as of a given date.  Follow the document procedure to establish remaining owner as sole Trustee and then, as Trustee, try to communicate with said financial institution.  A tedious process awaits.  Good luck.