our clients assets were acquired and its plan terminated. the new employer of the employees will be starting a new plan. there are participants with loans that would prefer if they could roll their loans over to the new plan. i believe they could do this. however, the loan policy of the old plan provides that you have to be a party in interest to have a loan. in this case since they are now terminated they are no longer parties in interest. my question is whether this puts them in default and makes the loans ineligible for rollover or do they have a grace period where the loan would be eligible for rollover?

Any plan provisions or policies that interfered should have been amended in connection with the transaction. It may not be too late to amend. Also, the fiduciary may have discretion over timing of default and contractual consequences of default and may be able to accommodate a prompt rollover.