I received a court order for a 401(k) plan participant ordering to stop loan repayments and refund the payments made from September 1st to current date. Is it legal to refund amounts that have already posted into the plan?

is it b/c of bankruptcy?

yes

What does counsel say? Generally payments on outstanding loans are required to cease when the bkcy ct issues an order notifiying all creditors that the empoyee has filed a petition in bankruptcy. Refunding loan payments my conflict with the terms of the plan. Why did the ct order a retroactive refund?