Enron bankruptcy timeline

Pro Search

3 steps completed
Answer
Enron Corporation, a U.S. energy, commodities, and services company, was founded in 1985 by Kenneth Lay after the merger of Houston Natural Gas and InterNorth. The company began trading natural gas commodities in 1989 and hired Jeffrey Skilling in 1990 to lead its effort to focus on commodities trading in deregulated markets12. In 1997, Skilling was named president and chief operating officer of Enron. That same year, Chief Financial Officer Andrew Fastow created Chewco, a partnership, to buy the University of California pension fund's stake in another joint venture called JEDI. This was the first step toward similar financial moves to hide debt and inflate profits that would eventually lead to Enron's downfall1. Fastow created the first of two partnerships, LJM, in 1999 to "buy" poorly performing Enron assets and hedge risky investments. This helped the company hide debt and inflate profits. Enron directors approved Fastow's plan that he run the partnerships that do deals with Enron while continuing as Enron's finance chief1. In August 2000, Enron shares reached a high of $90. By December 2000, Enron announced that Skilling, then president and chief operating officer, would succeed Kenneth Lay as CEO in February 20011. However, Skilling resigned in August 2001, and Lay was named CEO again. That same month, finance executive Sherron Watkins met privately with Lay to discuss concerns of murky finance and accounting that could ruin the company1. In October 2001, Enron announced $638 million in third-quarter losses and a $1.2 billion reduction in shareholder equity. Later that month, the company disclosed that the Securities Exchange Commission had opened an inquiry into its accounting practices15. By November 2001, Enron admitted accounting errors, inflating income by $586 million since 1997. The company also explored merger or acquisition possibilities with rival Dynegy in a desperate effort to save itself from bankruptcy5. However, the deal with Dynegy failed, and on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. At the time, it was the largest bankruptcy in U.S. history34.
Related
what were the main causes of enron's bankruptcy
how did the enron scandal affect the energy industry
what were the consequences of enron's bankruptcy for its employees and shareholders
arc-anglerfish-washpost-prod-washpost.s3.amazonaws.com