Tax Cut and Jobs Extends the deadline to avoid having a plan loan be treated as a taxable distribution for individuals who fail to meet the repayment terms of the loan because of their separation from service (or in the event of plan termination) by
permitting employees to roll over the loan balance to an IRA/plan by the due date for filing their tax return (including
extensions).

Client has an o/s 401(k) loan
company was bought by another company
Participant has been given 4 options (1) keep the assets in the current plan (2) roll the assets into the 401(k) plan of the new employer (loan payments would continue), (3) IRA rollover or (4) cash out

Question
Would this scenario qualify as a plan termination – thus allowing the participant to qualify for the extra time allotted to rollover the loan to an IRA avoiding taxes/penalties?

Thank you