spin off - trustee to trustee transfer

i have some employees basically leaving and forming a new entity. we want to start a new plan and do a trustee to trustee transfer of their entire accounts to the new plan (as opposed to distributions/rollovers). would this be considered a spin-off and be allowed? we do not have an asset  sale. 

If both companies agree then yes and yes.

Talk to your ERISA attorney first.  The original post said "leaving", which sounds like a separation of employment, which sounds like a distributable event.  The sequence of events might be important in determining what options are available.