Enron Corp Case Study

Enron Corp.

What was Enron?

In 1985, Nebraskan energy company InterNorth's acquisition of Houston Natural Gas Company was the beginning of the Enron, a Houston based energy company just specialized in many other fields including plastic, pulp and paper, pipelines, water, shipping, steal and more. At its height it operated over 35 power plants worldwide and tens of thousands of miles of pipelines all over North and South America. It was considered to be one of the largest and most successful companies in the world- after only 14 years of operation Enron was 7th on the fortune 500. After a series of liabilities and other falsifies or hidden accounting information was revealed in 2001 Enron declared bankruptcy.

What is Enron today?

Enron emerged from bankruptcy in 2004 and has changed its name to Enron Creditor's Recovery Corp. Its sole purpose being (as stated on the company's website) 'to reorganize and liquidate the remaining operations and assets of Enron following one of the largest and most complex bankruptcies in U.S. history.' So far 21.7 Billion dollars have been recovered and more are still being distributed.

Key Players

Kenneth Lay

* Started his career in the public energy sector, then moved to private in 1984

* Created the merge of Houston Natural Gas and InterNorth

* Was the CEO of Enron Corp from its beginning until the scandal, with the exception of 6 months in 2001,

* He died in 2006 of a heart attack 3 months after he was convicted of 11 counts of various fraud.

Jeffery Skillings

* Acted as CEO of Enron for 6 months in Mr. Lay's Absence

* Was responsible for the change in accounting styles, a style where anticipated profits were recorded at the time of the deal- before they were earned

* He quit the company and sold all his stocks before the discovery of the scandal.

* He is now serving a 24 year long sentence in prison.

Andrew Fastow

* Was CFO for Enron Corp.

* Created the method used to hide liabilities of companies tied to Enron

* Receives much of the blame for the creation of the scandal.

* Was sentenced to 6 years in prison and had a huge amount of family assets taken from him.

The Scandal

The scandal was created in order to inflate