5
administrators, petitioners are subject to the Employee
Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406,
sec. 103(a)(1)(A), 88 Stat. 841, 29 U.S.C. sec. 1023(a)(1)(A)
(1994). ERISA requires administrators of employee benefit plans
to use independent qualified public accountants to publish
various reports relating to the plan. Id. As a result,
petitioners paid auditing and professional fees of $100,650 to
KPMG Peat Marwick, Ernst & Whinney, and Ernst & Young from 1989
to 1992 to examine and prepare financial statements for
petitioners and their employee benefit plans.
D. The 1986 Acquisitions and Section 338 Elections
In December 1986, Sealy Mattress Co., formerly known as
Ohio-Sealy Mattress Manufacturing Co., a subsidiary of the Ohio
Mattress Co., bought the stock of Slumber Products Corp., Sealy
Mattress Co. of Albany, Inc., Sealy Mattress Co. of Illinois,
Inc., Sealy of Minnesota, Inc., Sealy of Connecticut, Inc., the
Maryland Bedding Co., Sealy of Maryland and Virginia, Inc., the
Metcalfe Brothers, Inc., and Sealy Mattress Co. of Kansas City,
Inc. Sealy Mattress Co. bought Sealy of Michigan, Inc., in April
1987.
Each of these companies (the acquired companies) had license
agreements with Sealy, Inc., which is now known as the Ohio
Mattress Co. Licensing & Components Group. All but two of the
acquired companies owned voting stock in Sealy, Inc. After the
1986 acquisitions, the Ohio Mattress Co. indirectly owned 77.49
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