Enron is an energy company that quickly grew to become one of the world's largest corporations before its financial practices caused its bankruptcy. Formed in 1985 by the merger of two gas pipeline companies, Houston Natural Gas and InterNorth, the company diversified under its manager, Kenneth Lay, into an energy trading company offering various services, including a massive e-commerce. It bought the name of the Houston Astros' ballpark and was named most innovative company of the year for five consecutive years by Fortune magazine. It peaked in the year 2000, with revenues of $100 billion and a share price of $90, its rapid growth attracting many investors.
In 2001, however, Enron's success appeared to be phony. The company had assigned billions of dollars of debt and risk to subsidiary companies, which then kept them off their books. Share prices began to fall precipitously. Enron's accounting firm, Arthur Anderson, was caught destroying Enron-related documents. On 2 December 2001, Enron filed for bankruptcy, along with sixty subsidiary companies. In 2002, its shares were traded at 11 cents. The company's collapse destroyed thousands of investors' savings. In July 2002, Arthur Andersen, Enron's accounting firm, was convicted of destroying evidence, although an appeal was pending at the time of this writing. Enron's officials were then undergoing further congressional hearings and criminal investigations, and numerous agencies were investigating other corporations for similar accounting and finance methods.
Bibliography
Fox, Loren. Enron: The Rise and Fall. New York: Wiley, 2002.
Barreveld, Dirk J. The ENRON Collapse. New York: Universe, 2002.
—Steve Sheppard
