Can a company true up ESOP account balances for employees who received distributions prior to a sale of the company when the shares were sold for more than what the former employees received?

A. When ESOP companies are sold at a premium, employees who received a distribution and cashed in their shares or received cash in lieu of shares prior to the sale will have lost out on a potentially significant windfall. Some companies true up the distributions of these participants to reflect the difference. Generally, this would apply only to distributions that occurred in the same plan year as the sale. The true up will reduce what other participants receive.

Link to this FAQ Topic: Distributions & Repurchase