When a 401(k) is actually Terminated (the Board of the company should determine the Termination Date), then a portion of your friend's 401(k) investments can be Distributed:

The Non-elective Contributions (what the employer put in no matter what your friend did - with a couple of exceptions), and;

The Matching Contributions (what the employer matched based on what your friend deferred into the Plan from each paycheck - again, with a couple of exceptions).

The remainder of your friend's 401(k), most notably the actual deferrals from each paycheck into the Plan, may or may not be Distributed to your friend right away.

If the employer has a Successor Plan in place, they will likely invite the employees of the Terminated 401(k) to move their investments into it.

Because of how quickly such a situation can become complicated (for both the employer and employee alike), it is best to stay in touch with the Plan's administrator (ask HR what company is actually managing the funds - it could be Vanguard, Fidelity, or some other financial institution).

If your friend is allowed take all of her/his funds out of the 401(k), I advise to play it safe and do a "Trustee-to-Trustee Transfer" of the funds directly to a Traditional Deductible IRA. Your friend may not want to touch most of this money until at least 12 months have passed since ALL of the Terminated 401(k) Plan's assets have been Distributed to the employees - and watch to see if there has been an announcement of a Successor Plan for the funds.

To play it safe, ask your friend to get together with her/his co-workers and consider retaining the Services of a Tax Attorney and/or ERPA (Enrolled Retirement Plan Agent) to help with making the best decisions - with the lowest possible Tax consequences.

I wish your friend Good Luck!