MTG Rules Question

[Blueiji]

I was playing a game of EDH with two of my friends when a very odd situation arose. For the purposes of the post, I'm going to refer to the three players as follows: Michael (playing a U/R deck), Adam (playing W/U deck), and Blueiji (playing a B/G deck).

Michael had used "Keiga, the Tide Star" to take control of Adam's general, "Grand Arbiter, Augustine IV".

Adam then played "Reins of Power" (Adam had no creatures so Michael ended up with nothing).

Adam used Michael's creatures to swing at Michael (this included the Arbiter), this attack knocked Michael out of the game.

Michael's creatures (currently under Adam's control) got removed from the game (because Michael had lost), but we weren't sure about the Arbiter.

The Arbiter is owned by Adam, and was under his control, but only through a non-permanent creature steal, it would have gone back to Michael at the end of the turn.

We came up with two situations we figured might work, but couldn't decide which one was correct (in the official rules).

- The Arbiter stays under Adam's control until the end of the turn, then gets returned to Michael, which causes it to go to the graveyard (because Michael has lost the game).

or

- The Arbiter is sent to Adam's graveyard as soon as Michael loses.

Would one of these two things happen, or something else entirely?

Thanks for the help.