Hiding Debt-Prolonging Ruin
Enron first appeared on the scene in 1985 after Kenneth Lay merged the companies: Houston Natural Gas and InterNorth. By 1992 the company’s gas contracts were valued at over $122 million. Early on, the tides seemed to be in Enron’s favor, when Congress deregulated the sale of natural gas (“Enron”). With less regulations to follow Enron continued to increase its revenue and eventually looked to diversify their earnings. With diversification strategies in place, the company’s stock rose over 750% by the close of the 1990’s (“Enron”). This was a far cry from similar companies at the time. The company eventually capped out at a net worth of almost $70 billion, with shares worth $90 a piece (“Enron”).
However, Enron’s financial rein came to a crashing halt. In 2001, the company claimed earnings of over $138.7 billion (“Enron”). Unfortunately, the numbers were distorted. Shell corporations were created in order to hide significant losses. Lay and other executives falsified documents and hide evidence. Eventually, the company which was earlier rated as the most innovative company in America, became the symbol of…show more content… The company was in debt for nearly $67 billion dollars when they filed for bankruptcy. Although, all of the company’s assets were liquidated, including pictures taken off of executives’ walls which were auctioned, many were left in financial ruin. In May of 2004, 20,000 former Enron employees filed a $2 billion suit against the company. The employees were only awarded $85 million. After the loss of their jobs and pension they were each compensated approximately $3000 (“Enron”). Lay’s conviction may have been vacated after his death in 2006, but the wake of his decisions are still being felt (Roberts). Enron, a once promising company, is now the epitome of bad business