If we are selling of a subsidiary of our company through a "stock sell", does this qualify for a distribution and if the employee currently has an outstanding loan what happens if the new 401k plan administrators say they will not let them roll over?

Need more information: Does the sub maintain the 401(k) plan or does it participate in the plan of the parent? Is the sale to a company who is not part of the controlled group with the plan sponsor? The question is whether the sale of the sub will result in the termination of the subs employees in the plan.