Enron And The Enron Scandal

791 Words4 Pages
Enron Corporation was an American commodities, energy, and services company that was based out of Houston, Texas. This corporation was founded in 1985, resulting from the merger between InterNorth and Houston Natural Gas, these were both moderately small businesses in the United States. Before Enron’s bankruptcy on December 2, 2001, it had nearly 20,000 employees and was one of the global leaders in the communications, electricity, natural gas, and pulp and paper market, with declared earnings of approximately $101 billion during 2000. Enron was termed “America’s Most Innovative Company” by Fortune for six years in a row. It was discovered that Enron’s stated financial condition was prolonged by established, inventively, and methodically planned accounting fraud at the end of 2001. It has been since called the Enron scandal. Enron has subsequently become a popular example of deliberate corporate corruption and fraud. This scandal additionally caused the accounting methods and activities of many business corporations in the U.S. to come into question. The Enron scandal was also an influencing factor in the passing of the 2002 Sarbanes-Oxley Act. This scandal furthermore altered the corporate world by triggering the disbanding of the Arthur Andersen accounting firm. Enron filed for bankruptcy in late 2001 in New York’s Southern District and it designated Weil, Gotshal & Manges as its bankruptcy counsel. Its bankruptcy came to an end during the November of 2003, pursuant to a plan of restructuring that was approved by the court, after one of the most complicated bankruptcy cases in the history of the United States. The new directors’ board renamed the business to Enron Creditors Recovery Corp., and stressed restructuring and liquida... ... middle of paper ... ...to safeguard the assets of Enron Corporation. In late 2000, The stocks of Enron attain a high of $90. Then, the corporation appoints Skilling as Kenneth Lay’s successor as CEO in the beginning of the next year. Lay will also continue on as chairman of Enron. Stock hits an annual peak of $84.87. In August of 2001, Skilling leaves Enron, Lay is reappointed CEO. Furthermore, Sherron Watkins, finance executive, convenes privately with Lay to discuss apprehensions of murky accounting and finance that could potentially cause Enron to be ruined. As a result of this fraud and corruption, employees and investors could be impacted by this issue. Top executives of Enron probably knew about the looming downfall of Enron and sold their stocks. However, lower-level employees and investors might not have had this luxury. As a result, many likely lost their life savings and 401k’s.

More about Enron And The Enron Scandal

Open Document