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Enron Creditors Recovery Corporation
Type Defunct / Asset-less Shell
Founded Omaha, Nebraska, 1985
Headquarters Houston, Texas, USA
Key people Kenneth Lay, Founder, former Chairman and CEO
Jeffrey Skilling, former President, CEO and COO
Andrew Fastow, former CFO
Rebecca Mark-Jusbasche, former Vice Chairman, Chairman and CEO of Enron International
Stephen F. Texas ( is a state geographically located in the South Central United States and is also known as the Lone Star State. The United States of America —commonly referred to as the Kenneth Lee "Ken" Lay ( April 15, 1942 Jeffrey Keith "Jeff" Skilling (born November 25, 1953) was the CEO of Enron Corporation in 2001 Andrew Stuart Fastow (born 22 December 1961 was the Chief financial officer of Enron Corporation until the U Rebecca Mark-Jusbasche was famous as the head of the Enron International division of Enron. Cooper, Interim CEO and CRO
John J. Ray, III, Chairman
Industry formerly Energy
Revenue $111 billion (in 2000)
Employees approx. For other uses of this term see Industry (disambiguation An industry (from Latin industrius, "diligent industrious" In Physics and other Sciences energy (from the Greek grc ἐνέργεια - Energeia, "activity operation" from grc ἐνεργός In business revenue or revenues is Income that a company receives from its normal business activities usually from the sale of goods and services Employment is a Contract between two parties, one being the employer and the other being the employee. 22,000 in 2000
approx. 40 as of 2008.
Website http://www.enron.com/

Enron Creditors Recovery Corporation (formerly Enron Corporation, NYSE ticker symbol ENE) was an American energy company based in Houston, Texas. A website (alternatively web site or Web site, a back-construction from the Proper noun World Wide Web) is a collection of Web pages The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. The United States of America —commonly referred to as the In Physics and other Sciences energy (from the Greek grc ἐνέργεια - Energeia, "activity operation" from grc ἐνεργός Texas ( is a state geographically located in the South Central United States and is also known as the Lone Star State. Before its bankruptcy in late 2001, Enron employed around 22,000 people (McLean & Elkind, 2003) and was one of the world's leading electricity, natural gas, pulp and paper, and communications companies, with claimed revenues of $111 billion in 2000. Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against Fortune named Enron "America's Most Innovative Company" for six consecutive years. Fortune is a Global Business Magazine published by Time Inc's Fortune|Money Group At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud (see: Enron scandal). Accounting scandals, or corporate accounting scandals are political and business scandals which arise with the disclosure of misdeeds by trusted executives The Enron scandal was a financial scandal involving Enron Corporation Former ( NYSE ticker symbol ENE and its accounting firm Arthur Andersen Enron has since become a popular symbol of willful corporate fraud and corruption.

Enron filed for bankruptcy protection in the Southern District of New York in late 2001 and selected Weil, Gotshal & Manges as their bankruptcy counsel. Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against Weil Gotshal & Manges is an international law firm headquartered in New York City. It emerged from bankruptcy in November of 2004 after one of the biggest and most complex bankruptcy cases in U. S. history. On September 7, 2006, Enron sold Prisma Energy International Inc., its last remaining business, to Ashmore Energy International Ltd. Events 1251 BC - A Solar eclipse on this date might mark the birth of legendary Heracles at Thebes Greece. Year 2006 ( MMVI) was a Common year starting on Sunday of the Gregorian calendar. Prisma Energy International Inc, was a former subsidiary of Enron Corporation formed in 2003 to own and manage the majority of Enron's overseas assets formerly known as "Enron Following the scandal, lawsuits against Enron's directors were notable because the directors settled the suits by paying very significant sums of money personally. The scandal also caused the dissolution of the Arthur Andersen accounting firm, affecting the wider business world. Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche [1]

In early 2007, Enron changed its name to Enron Creditors Recovery Corp. to reflect its status as a (largely) asset-less shell corporation. Its current goal is to liquidate all remaining assets of the company. For most of 2007, Enron continued to operate under the name Enron Corp. by filing a Doing Business As, or "dba" certificate in Harris County, Texas. The Phrase " doing business as " (abbreviated DBA or d/b/a) is a legal term, meaning that the Name of the business or operation Harris County is a County located in the US state of Texas within the Houston–Sugar Land–Baytown metropolitan area

Contents

Early history

Enron traces its roots to the Northern Natural Gas Company, which was formed in 1932 in Omaha, Nebraska. It was reorganized in 1979 as the leading subsidiary of a holding company, InterNorth. Year 1979 ( MCMLXXIX) was a Common year starting on Monday (link displays the 1979 Gregorian calendar) A holding company is a company that owns part all or a majority of other companies' outstanding Stock. InterNorth Inc was a very large energy company headquartered in Omaha Nebraska, in the United States, specializing in Natural gas pipelines but also a In 1985, it bought the smaller Houston Natural Gas and changed its name to Enron in the process. Year 1985 ( MCMLXXXV) was a Common year starting on Tuesday (link displays 1985 Gregorian calendar) Houston Natural Gas Company (HNG was a gas utility headquartered in Houston Texas. [2]

The merged company initially named itself "HNG/InterNorth Inc. ", even though InterNorth was the nominal survivor. It built a large headquarters complex in Omaha. However, the departure of ex-InterNorth CEO Samuel Segnar six months after the merger allowed former HNG CEO Kenneth Lay to become CEO of the newly merged company. Kenneth Lee "Ken" Lay ( April 15, 1942 Lay soon moved Enron's headquarters to Houston and began to thoroughly re-brand the business. Lay originally favored the name "Enteron" (possibly spelled in camelcase as "EnterOn"); but when it was pointed out that the term approximated a Greek word referring to the intestine, it was quickly shortened to "Enron. CamelCase (also spelled " camel case " and sometimes known as medial capitals) is the practice of writing compound words or phrases in which the Greek (el ελληνική γλώσσα or simply el ελληνικά — "Hellenic" is an Indo-European language, spoken today by 15-22 million people mainly In Anatomy, the intestine is the segment of the alimentary canal extending from the Stomach to the Anus and in humans and other mammals consists " The final name was decided upon only after business cards, stationery, and other items had been printed reading Enteron, reflecting the confused state of affairs in the company at the time. Enron's infamous "crooked E" logo was designed by the late American graphic designer Paul Rand. A graphic designer (also known as a graphic artist and communication designer) is a professional within the Graphic design and Graphic arts industry Paul Rand (born Peretz Rosenbaum, August 15 1914 &ndash November 26 1996 was an American Graphic designer best known for his corporate logo designs

Enron was originally involved in transmitting and distributing electricity and gas throughout the United States and developing, building, and operating power plants, pipelines, and it also dealt with rule of law and other infrastructure worldwide. A power station (also referred to as generating station, power plant or powerhouse) is an industrial facility for the generation of Pipeline transport is the transportation of goods through a pipe. Enron owned a large network of natural gas pipelines which stretched ocean to ocean and border to border including Northern Natural Gas, Florida Gas Transmission, Transwestern Pipeline company and a partnership in Northern Border Pipeline from Canada. These were the cash cows that made all of the other ENRON companies, ventures and investments possible. They were the only part of ENRON that made significant profits. In 1998, Enron moved into the water sector, creating the Azurix Corporation, which it part-floated on the New York Stock Exchange (NYSE) in June 1999. The water industry provides Drinking water and Wastewater services (including Sewage treatment) to households and industry Azurix Corp was the Water services division of Enron Corporation formed by purchasing Wessex Water in 1998 The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. Azurix failed to break into the water utility market, and one of its major concessions, in Buenos Aires, was a large-scale money-loser. Buenos Aires is the Capital and largest city of Argentina. It is geographically located on the southern shore of the Río de la Plata, on the southeastern In April 2001, Enron announced

Enron grew wealthy, it claimed, via its pioneering, due largely to marketing and promoting power and communications bandwidth commodities and related derivatives as tradable financial instruments, including exotic items such as weather derivatives. In popular usage "marketing" is the promotion of products especially Advertising and Branding However in professional usage the term has a wider meaning of Promotion involves disseminating information about a product, Product line, Brand, or company Communication is the process of conveying information from a sender to a receiver with the use of a medium in which the communicated information is understood the same way In Computer networking and Computer science, digital bandwidth or just bandwidth is the capacity for a given system to transfer data over a connection A commodity is anything for which there is demand but which is supplied without qualitative differentiation across a market Derivatives are Financial instruments whose values depend on the value of other underlying financial instruments Financial instruments are cash evidence of an ownership interest in an entity or a contractual right to receive or deliver cash or another financial instrument Weather derivatives are Financial instruments that can be used by organizations or individuals as part of a Risk management strategy to reduce risk associated with Enron was named "America's Most Innovative Company" by Fortune magazine for six consecutive years, from 1996 to 2001. Fortune is a Global Business Magazine published by Time Inc's Fortune|Money Group It was on the Fortune's "100 Best Companies to Work for in America" list in 2000, and had offices that were, in hindsight, stunning in their opulence. Enron was hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers and extremely effective management until its exposure in corporate fraud. A vitality curve is a Leadership construct assigning credit with certain proportions of the production to proportions of a producing population The first analyst to publicly disclose Enron's financial flaws was Daniel Scotto who in August 2001 issued a report entitled "All Stressed up and no place to go" which encouraged investors to sell Enron stocks and bonds at any and all costs. Daniel "Dan" Scotto is an American Financial analyst.

As was later discovered, many of Enron's recorded assets and profits were inflated, or even wholly fraudulent and nonexistent. Debts and losses were put into entities formed "offshore" that were not included in the firm's financial statements, and other sophisticated and arcane financial transactions between Enron and related companies were used to take unprofitable entities off the company's books. Financial statements (or financial reports) are formal records of a business' financial

Its most valuable asset and the largest source of honest income, the 1930s-era Northern Natural Gas, was eventually purchased back by a group of Omaha investors, who moved its headquarters back to Omaha, and is now a unit of Warren Buffett's Mid-American Energy Holdings Corp. Warren Buffett (born August 30 1930 is an American Investor, Businessman, and Philanthropist. NNG was put up as collateral for a $2. 5 billion capital infusion by Dynegy Corporation when Dynegy was planning to buy Enron. Dynegy Inc ( based in Houston, Texas, is a large owner and operator of Power plants and a player in the Natural gas liquids and Coal When Dynegy looked closely at Enron's books, they backed out of the deal and fired their CEO, Chuck Watson. The new chairman and interim CEO, the late Daniel Dienstbier, had been president of NNG and an Enron executive at one time and an acquaintance of Warren Buffett. NNG continues to be profitable today.

Products

Enron traded in more than 30 different products including the following.

It was also an extensive futures trader, including sugar, coffee, grains, hog, and other meat futures. Petrochemicals are chemical products made from raw materials of Petroleum or other Hydrocarbon origin Plastic is the general common term for a wide range of synthetic or semisynthetic organic solid materials suitable for the manufacture of industrial products Electric power is defined as the rate at which Electrical energy is transferred by an Electric circuit. Wood pulp is a dry fibrous material prepared by chemically or mechanically separating the fibers which make up Wood. Steel is an Alloy consisting mostly of Iron, with a Carbon content between 0 An oil is a substance that is in a viscous Liquid state ( "oily") at ambient temperatures or slightly warmer and is The term broadband can have different meanings in different contexts Shipping is physical process of Transporting goods and Cargo. Cargo (or freight) refers to goods or produce transported generally for Commercial gain by ship, aircraft, train, Water is a common Chemical substance that is essential for the survival of all known forms of Life. Distinguish from Wastwater (a lake in the Lake District in northwest England In Finance, a futures contract is a standardized Contract, traded on a Futures exchange, to buy or sell a certain Underlying instrument At the time of its bankruptcy filing in December, 2001, Enron was structured into seven distinct business units.

Online marketplace services

Broadband services

Energy and commodities services

Capital and risk management services

Commercial and industrial outsourcing services

Project development and management services

Energy transportation and upstream services

Enron manufactured gas valves, circuit breakers, thermostats, and electrical equipment in Venezuela through INSELA SA, a 50-50 joint venture with General Electric. Enron owned three paper and pulp products companies: Garden State Paper, a newsprint mill; as well as Papiers Stadacona and St. Aurelie Timberlands. Enron held a controlling stake in the Louisiana-based petroleum exploration and production company Mariner Energy.

EnronOnline

The front page of EnronOnline
The front page of EnronOnline

In November 1999, Enron launched EnronOnline. Conceptualized by the company's Global Finance department under John Siepierski, it was the first web-based transaction system that allowed buyers and sellers to buy, sell, and trade commodity products globally. It allowed users to do business only with Enron. Due to the huge cash needs of Enron Online, and the firm wasting money in other areas such as broadband, Azurix, Enron Energy Services, and shutting down the original pipeline service which generated cash flow, Enron virtually drained itself of cash. Azurix Corp was the Water services division of Enron Corporation formed by purchasing Wessex Water in 1998 Enron Energy Services (EES was a business unit of Enron Corporation, whose purpose was to provide gas electricity and energy management directly to businesses and The Enron Global Finance department had to keep working up more creative financing moves to keep the company running.

EnronOnline went live on November 29, 1999. Events 1777 - San Jose California, is founded as el Pueblo de San José de Guadalupe Year 1999 ( MCMXCIX) was a Common year starting on Friday (link will display full 1999 Gregorian calendar) The site allowed energy users to do business in a previously unseen way. Until this point a trader who wanted to buy an energy contract talked with another energy trader who wanted to sell a contract, and from there, terms were agreed. Trade is the willing exchange of goods, services, or both Trade is also called Commerce. In Physics and other Sciences energy (from the Greek grc ἐνέργεια - Energeia, "activity operation" from grc ἐνεργός A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law EnronOnline allowed market participants to see prices on their screen just like a stock ticker, and could do business far more simply. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information Ticker tape was used by ticker tape machines, the Ticker tape timer stock ticker machines, or just stock tickers.

The main commodities offered on EnronOnline were natural gas and electricity, although there were 500 other products including credit derivatives, bankruptcy swaps, pulp, gas, plastics, paper, steel, metals, freight, and TV commercial time. Natural gas is a Gaseous Fossil fuel consisting primarily of Methane but including significant quantities of Ethane, Propane, In Finance, a credit derivative is a derivative whose value derives from the Credit risk on an underlying bond loan or other financial asset Plastic is the general common term for a wide range of synthetic or semisynthetic organic solid materials suitable for the manufacture of industrial products Paper is thin material mainly used for writing upon printing upon or packaging Steel is an Alloy consisting mostly of Iron, with a Carbon content between 0 The M acro E xpansion T emplate A ttribute L anguage complements TAL, providing macros which allow the reuse of code across Cargo (or freight) refers to goods or produce transported generally for Commercial gain by ship, aircraft, train, A television advertisement or television commercial (often just commercial or advert (US or ad (UK is a span of television programming produced

EnronOnline was seen as an impressive tool, but because Enron was either buying, selling, or trading in every transaction, the costs increased over time, and the systems were involved in the financial misreporting and other questionable financial behavior that eventually led to Enron's demise. However, EnronOnline spawned several other e-commerce websites including www.DealBench.com. DealBench is an acquisition and divestiture tool still operating today. As of 2007, Enron still operates the DealBench code under the name EnronAssets. Other Enron developed technologies include Commodity Logic, ClickPaper and EnronCredit. Enron Creditors Recovery Corporation (formerly Enron Corporation, former NYSE ticker symbol ENE was an American Energy company based in

EnronOnline closed down for online trading on the morning of November 28, 2001, with Enron filing for bankruptcy four days later. For the town in Argentina, see 28 de Noviembre. Events Year 2001 ( MMI) was a Common year starting on Monday according to the Gregorian calendar. Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against

Principal assets

At the time of bankruptcy, Enron owned all of or interests in the following major assets:

Power plants

Enron owned or operated 38 electric power plants worldwide:

Pipelines

Electric utilities/distributors

Natural gas-related businesses

Pulp and paper

Other

Accounting scandal of 2001

Main article: Enron scandal

After a series of revelations involving irregular accounting procedures bordering on fraud perpetrated throughout the 1990s involving Enron and its accounting firm Arthur Andersen, Enron stood on the verge of undergoing the largest bankruptcy in history by mid-November 2001. The Enron scandal was a financial scandal involving Enron Corporation Former ( NYSE ticker symbol ENE and its accounting firm Arthur Andersen Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche A white knight rescue attempt by a similar, smaller energy company, Dynegy, was not viable. In Business, a white knight may be a Corporation, a private company or a person that intends to help another firm Dynegy Inc ( based in Houston, Texas, is a large owner and operator of Power plants and a player in the Natural gas liquids and Coal

As the scandal was revealed, Enron shares dropped from over US$90. 00 to just pennies. Enron had been considered a blue chip stock, so this was an unprecedented and disastrous event in the financial world. A blue chip Stock is the stock of a well-established company having stable earnings and no extensive liabilities. Enron's plunge occurred after it was revealed that much of its profits and revenue were the result of deals with special purpose entities (limited partnerships which it controlled). A special purpose entity ( SPE) (sometimes especially in Europe " special purpose vehicle " or simply SPV) is a body corporate (usually a A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are The result was that many of Enron's debts and the losses that it suffered were not reported in its financial statements. Financial statements (or financial reports) are formal records of a business' financial

Enron filed for bankruptcy on December 2, 2001. Events 1409 - The University of Leipzig opens 1755 - The second Eddystone Lighthouse is destroyed by fire Year 2001 ( MMI) was a Common year starting on Monday according to the Gregorian calendar. In addition, the scandal caused the dissolution of Arthur Andersen, which at the time was one of the world's top accounting firms. Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche The firm was found guilty of obstruction of justice in 2002 for destroying documents related to the Enron audit and was forced to stop auditing public companies. The crime of obstruction of justice includes crimes committed by Judges Prosecutors attorneys general, and elected officials in general Although the conviction was thrown out in 2005 by the Supreme Court, the damage to the Andersen name has prevented it from returning as a viable business. Year 2005 ( MMV) was a Common year starting on Saturday (link displays full calendar of the Gregorian calendar. The Supreme Court of the United States is the highest judicial body in the United States and leads the federal judiciary.

Enron also withdrew a naming rights deal with the Houston Astros Major League Baseball club to have its name associated with their new stadium, which was formerly known as Enron Field (it is now Minute Maid Park. The Houston Astros are a Professional baseball team based in Houston Texas. Minute Maid Park (formerly The Ballpark at Union Station, Enron Field, and Astros Field) is a ballpark in Houston, Texas )

Accounting practices

Enron had created offshore entities, units which may be used for planning and avoidance of taxes, raising the profitability of a business. This provided ownership and management with full freedom of currency movement, and full anonymity, that would hide losses that the company was taking. These entities made Enron look more profitable than it actually was, and created a dangerous spiral in which each quarter, corporate officers would have to perform more and more contorted financial deception to create the illusion of billions in profits while the company was actually losing money. This practice drove up their stock price to new levels, at which point the executives began to work on insider information and trade millions of dollars worth of Enron stock. The executives and insiders at Enron knew about the offshore accounts that were hiding losses for the company; however the investors knew nothing of this. Chief Financial Officer Andrew Fastow led the team which created the off-books companies, and manipulated the deals to provide himself, his family, and his friends with hundreds of millions of dollars in guaranteed revenue, at the expense of the corporation he worked for and its stockholders.

In 1999, Enron launched EnronOnline, an Internet-based trading operation, which was used by virtually every energy company in the U. Enron Creditors Recovery Corporation (formerly Enron Corporation, former NYSE ticker symbol ENE was an American Energy company based in S. President and chief operating officer Jeffrey Skilling began advocating a novel idea: the company didn't really need any "assets. Jeffrey Keith "Jeff" Skilling (born November 25, 1953) was the CEO of Enron Corporation in 2001 " By pushing the company's aggressive investment strategy, he helped make Enron the biggest wholesaler of gas and electricity, with $27 billion traded in a quarter. The firm's figures, however, had to be accepted at face value. Under Skilling, Enron adopted mark to market accounting, in which anticipated future profits from any deal were tabulated as if real today. Thus, Enron could record gains from what over time might turn out losses, as the company's fiscal health became secondary to manipulating its stock price on Wall Street during the Tech boom. Wall Street is a street in lower Manhattan, New York City, United States. The " dot-com bubble " (or sometimes the " IT bubble " was a speculative bubble covering roughly 1995–2001 (with a climax on March 10 But when a company's success is measured by agreeable financial statements emerging from a black box, a term Skilling himself admitted, actual balance sheets prove inconvenient. Black box is a technical term for a device or system or object when it is viewed primarily in terms of its input and output characteristics Indeed, Enron's unscrupulous actions were often gambles to keep the deception going and so push up the stock price, which was posted daily in the company elevator. An advancing number meant a continued infusion of investor capital on which debt-ridden Enron in large part subsisted. Its fall would collapse the house of cards. House of Cards is a political thriller novel written by Michael Dobbs, a former Chief of Staff at Conservative Party headquarters which was set at the Under pressure to maintain the illusion, Skilling verbally attacked Wall Street Analyst Richard Grubman[3], who questioned Enron's unusual accounting practice during a recorded conference call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling replied "Well, thank you very much, we appreciate that . . . asshole. " Though the comment was met with dismay and astonishment by press and public, it became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling's lack of tact. When asked during trial in the street, Skilling wholeheartedly admitted that industrial dominance and abuse was a global problem: "Oh yes, yes sure, it is. "[1] [4]

Peak and decline of stock price

In August of 2000, Enron's stock price hit its highest value of $90. [5] At this point Enron executives, who possessed the inside information on the hidden losses, began to sell their stock. At the same time, the general public and Enron's investors were told to buy the stock. Executives told the investors that the stock would continue to climb until it reached possibly the $130 to $140 range, while secretly unloading their shares.

As executives sold their shares, the price began to drop. Investors were told to continue buying stock or hold steady if they already owned Enron because the stock price would rebound in the near future. Kenneth Lay's strategy for responding to Enron's continuing problems was in his demeanor. As he did many times, Lay would issue a statement or make an appearance to calm investors and assure them that Enron was headed in the right direction.

By August 15, 2001, Enron's stock price had fallen to $42. Many of the investors still trusted Lay and believed that Enron would rule the market. They continued to buy or hold their stock and lost more money every day. As October closed, the stock had fallen to $15. Many saw this as a great opportunity to buy Enron stock because of what Lay had been telling them in the media. Their trust and optimism proved to be greatly misplaced.

Lay has been accused of selling over $70 million worth of stock at this time, which he used to repay cash advances on lines of credit. He sold another $20 million worth of stock in the open market. Also, Lay's wife, Linda, has been accused of selling 500,000 shares of Enron stock totaling $1. 2 million on November 28, 2001. The money earned from this sale did not go to the family but rather to charitable organizations, which had already received pledges of contributions from the foundation. Records show that Mrs. Lay placed the sale order sometime between 10:00 and 10:20 AM. News of Enron's problems, including the millions of dollars in losses they had been hiding went public about 10:30 that morning, and the stock price soon fell to below one dollar. Former Enron executive Paula Rieker has been charged with criminal insider trading. Rieker obtained 18,380 Enron shares for $15. 51 a share. She sold that stock for $49. 77 a share in July 2001, a week before the public was told what she already knew about the $102 million loss.

Post-bankruptcy

Enron initially planned to retain its three pipeline companies as well as most of its overseas assets. However, before emerging from bankruptcy, Enron spun off its pipeline companies as CrossCountry Energy.

Shortly after emerging from bankruptcy in November 2004, Enron's new board of directors sued 11 financial institutions for helping Lay, Fastow, Skilling and others hide Enron's true financial condition. Among the defendants were Royal Bank of Scotland, Deutsche Bank and Citigroup. The Royal Bank of Scotland plc ( Scottish Gaelic: Banca Rìoghail na h-Alba) is one of the retail banking subsidiaries of the Royal Bank of Scotland Group Deutsche Bank AG (literally "German Bank" ˈdɔɪtʃə,) is an international Universal bank with a broad private clients franchise headquartered in As of 2008, Enron has settled with all of the institutions except Citigroup. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common A final settlement with Citigroup is pending approval by a judge.

Enron sold its last business, Prisma Energy, in 2006, leaving it as an asset-less shell. In early 2007, it changed its name to Enron Creditors Recovery Corporation. Its goal is to pay off the old Enron's remaining creditors and wind up Enron's affairs.

California's deregulation and subsequent energy crisis

See also: California electricity crisis

In October 2000, Daniel Scotto, the top ranked utility analyst on Wall Street, suspended his ratings on all energy companies conducting business in California due to the unlikely probability that the companies would receive full and adequate compensation for the deferred energy accounts used as the cornerstone for the California Deregulation Plan enacted in the late 1990s. The California electricity crisis (also known as the Western U Daniel "Dan" Scotto is an American Financial analyst. Wall Street is a street in lower Manhattan, New York City, United States. California ( is a US state on the West Coast of the United States, along the Pacific Ocean. Five months later, Pacific Gas & Electric (PG&E) was forced into bankruptcy. For the 1970s rock music band see Pacific Gas & Electric (band. Congressman Phil Gramm, the second largest recipient of campaign contributions from Enron, succeeded in legislating California's energy commodity trading deregulation. William Philip Gramm (born July 8 1942, in Fort Benning, Georgia, USA is an American politician who served as a Democratic A political campaign is an organized effort which seeks to influence the decision making process within a specific group Despite warnings from prominent consumer groups which stated that this law would give energy traders too much influence over energy commodity prices, the legislation was passed in December 2000.

As Public Citizen reported, "Because of Enron’s new, unregulated power auction, the company’s 'Wholesale Services' revenues quadrupled—from $12 billion in the first quarter of 2000 to $48. Public Citizen is a Washington DC -based public interest group engaged in Consumer Advocacy, government accountability clean democracy and ethical 4 billion in the first quarter of 2001. "[6]

Before passage of the deregulation law, there had been only one Stage 3 rolling blackout declared. A rolling blackout, also referred to as load shedding, is an intentionally-engineered electrical Power outage. Following passage, California had a total of 38 blackouts defined as Stage 3 rolling blackouts, until federal regulators intervened in June 2001. These blackouts occurred mainly as a result of a poorly designed system that was manipulated by traders and marketers. Enron traders were revealed as intentionally encouraging the removal of power from the market during California's energy crisis by encouraging suppliers to shut down plants to perform unnecessary maintenance, as documented in recordings made at the time. [7] These acts contributed to the need for rolling blackouts, which adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers.

References

  1. ^ BBC NEWS | Business | Andersen guilty in Enron case
  2. ^ BBC News | Enron: The rise and fall
  3. ^ "Skilling comes out swinging", Money/CNN, April 10, 2006.  
  4. ^ Beth MacLean and Peter Elkind , Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, 2003, ISBN 1591840082
  5. ^ http://business.nmsu.edu/~dboje/papers/ENRON_2.jpg
  6. ^ Blind Faith: How Deregulation and Enron’s Influence Over Government Looted Billions from Americans
  7. ^ Tapes Show Enron Caused Rolling Blackouts in California

Bibliography

External links

Data

Events 1294 - Saint Celestine V abdicates the papacy after only five months Celestine hoped to return to his previous life Year 2001 ( MMI) was a Common year starting on Monday according to the Gregorian calendar. Events 781 BC - The first historic Solar eclipse is recorded in China. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. Bethany McLean (born December 12 1970 is a contributing editor to Vanity Fair magazine known for her work on the Enron scandal Enron The Smartest Guys in the Room is a 2005 Documentary film based on the best-selling 2003 book of the same name by Fortune Sherron Watkins (born August 28, 1959, in Tomball Texas) was Vice President of Corporate Development at the Enron Corporation. Daniel "Dan" Scotto is an American Financial analyst.
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