"Now she took/stole 50,000 from the S-Corp bank account and is not willing to return it."

When? The current tax year or a prior (closed) tax year?

I've never heard of not being able to declare it distribution. And if he takes any funds as distribution, she's entitled to the same amount; is that why she did this?

Why is she still on the banking signature card?

Why don't you list it as Shareholder Loan (other asset) and report it to the divorce lawyer so it is taken into consideration in the settlement.