The Fall of Enron Kenneth Lay, the CEO of Houston Natural Gas, started a merger with InterNorth, a gas pipeline business, to create Enron in 1985. Kenneth Lay and his partner Richard Kinder set off on creating Enron’s business practices through new projects and investments. However, the company was brand new and not had enough time to become profitable and thus all their investments send them into massive debt. After paying roughly $350 million to Jacobs, another extra from the merger and reorganization, 75% of the company’s capital was equal to its debt. After a few years has passed and the company still in debt, Kenneth Lay hires Jeffrey Skilling to take over Enron’s financial problems and soon became the head of Enron’s Finance.
After investing only a half a million dollars into the units, him and his father were able to reach 100% occupancy in two years and turned over a $6 million profit (Korte 4). He graduated from The Whorton School with a degree in economics in 1968 (Encyclopedia of World Biography 4). Gallagher 2 Shortly after his graduation, Trump moved back to Manhattan and began undertaking the first of his solo real estate development deals. He took on several massive projects during this time, the first of which capitalized on the Pennsylvania Central Railroad company declaring bankruptcy (Encyclopedia of World Biography 4). Trump originally intended to renovate the west yard into an apartment complex,... ... middle of paper ... ...entures.
Enron, once the darling of American businesses, was named “America’s Most Innovative Company” for six consecutive years by Fortune. This lofty image was, however, quickly tarnished and the company eventually filed for bankruptcy. Over the next few pages I will discuss who and how this Fortune 500 Company went from great to late. There are a few key players involved in this scandal that should be highlighted. First, is the founder Kenneth Lay.
NBC apologized in 1993 for improprieties in its expose alleging that GM pickups equipped with "sidesaddle" gas tanks tended to explode upon side impact. The government nonetheless asked the ... ... middle of paper ... ...improved. The stock holders equity has increased dramatically indicating the better management of the companies equity. The EBIT has improved for the last two year mainly because the level of interest paid has decreased due to the reduction of liabilities. Profitability The Gross Profit Margin has increased from 1993 to 1994 as the cost of goods sold did not increase at the same level that the sales increased.
Berkshire Hathaway, Inc was a small textile company. Its chairman and CEO of the company is Warren Buffett, the world's third richest man. He invested his partnership in invests in Berkshire Hathaway at the price of $8.6 million (The Essential Buffett, p27). It took him over 35years to grow its book value from $19 per share to $37,987 per share with a rate of 24 percent compounded annually (The Essential Buffett, p44). Buffett started purchasing other businesses, which were primarily insurance companies, with profits from the declining original textile business.
Ten3 Business e-coach. 24 November 2004. Rather, Dan, “GE’s Jack Welch Under Fire,” CBS Evening News Transcript, 1998, 2 Rosenstein, Bruce “How GE Chief Welch Rallies GE’s Troops,” USA Today, September 1998,15b. Tribune Business News. “In Boston, former GE chief Jack Welch works on new book with new wife.” The Boston Globe Oct 3, 2004, pITEM04277007 http://proquest.umi.com/pqdweb?RQT=309&VInst=PROD&VName=PQD&VType=PQD&sid =2&index=5&SrchMode=1&Fmt=3&did=000000706042601&clientId=12441 Welch, John, “John Welch, Jr.,” Narrative Biographies, American Decades, CD- Rom, Gale Research, 1998, 302 Welch, Jack.
To start with, in early this year, New Century was once the second largest subprime mortgage originator in the United States. However, once New York Stock Exchange delisted NCF in March this year, its market capitalization sharply decreased. I noticed NCF had flawed business model and strategies serving its business objectives. Supposedly, the business model of NCF is primary originating; bundling; servicing, and securitizing subprime mortgage loans and sells them to investors. In 2006, NCF claimed to its shareholders and public that the company’s strategic objectives include delivering strong operating performance, expanding more mortgage products and services, increasing market shares by lowering costs and improving productivity.
1. Introduction 158-years-old institution, the Lehman Brothers Holdings, Inc., Sought chapter 11 protections on September 15, 2008, indicating the largest bankruptcy filed in the U.S. history. The Lehman declared $639 billion in assets and $619 billion on debts, which surpassed the previous bankruptcy filed by Enron and WorldCom. The Lehman brother was 4th best-ranked U.S. Investment bank and globally 7th best investment bank before the collapse. An industry that had 25,000 employees worldwide crumbled into almost nothing within a week, which is one of the seminal events in the global financial crisis.
On November 8, 2001, people were shocked when one of the hottest companies of the booming nineties, Enron, admitted to using accounting practices that had inflated its income figures by $586 million over a four-year period (Kadlec, 2002). Less than a month later, Enron filed Chapter 11 bankruptcy, and early in 2002, the Justice Department launched a criminal investigation into the company’s practices. Investigators wanted to determine how much executives knew about the company’s status, as they told their employees to hold their shares of Enron, but sold more than $1 billion of their own (Kadlec, 2002). The company went belly-up, employees’ retirement savings were all but wiped out, and millions of investors lost a total of more than $60 billion (Thomas, 2002). People began to worry.
What was once the unthinkable occurred on September 16, 2008. On that date, the federal government gave the American Investment Group - better known as AIG (NYSE:AIG) - a bailout of $85 billion. In exchange, the U.S. government received nearly 80% of the firm's equity. For decades, AIG was the world's biggest insurer, a company known around the world for providing protection for individuals, companies and others. But in September, the company would have gone under if it were not for government assistance.