Enron Oil wasn’t producing or selling oil, but simply speculating on oil prices not only that but the oil traders were manipulating their earnings.įor example, they would set up deals with fake companies that let them take a huge loss on one contract, only to cancel out these losses with a second contract that generated the same amount in profits. By early 1986, Enron reported a first-year loss of $14 million, and by January 1987 its credit rating was at junk status.Įnron had been engaging in dishonest business practices that had brought the company to the brink of bankruptcy, and a specific subdivision called Enron Oil was causing the most trouble. Unfortunately for Lay, it wasn’t long before Enron was in dire financial straits. An intelligent and ambitious man named Ken Lay assumed the role of CEO, and in 1986 the company was renamed Enron. In fact, in 1987, just two years after it was founded, Enron was already saddled with debt.Įnron was formed in 1985 through a merger between two pipeline companies, Houston Natural Gas (or HNG) and InterNorth. The company’s demise due to huge debts and fraudulent business practices mirrored problems they had experienced years earlier when first starting out. what went on in the company’s closed-door meetings.Ĭhapter 1 – Enron, a company whose decades of deceit ended in bankruptcy, nearly met the same fate just two years after incorporating.ĭoes it ever feel like history is repeating itself? It sure seemed that way in 2001 when the American energy colossus Enron filed for bankruptcy.how financial structures sneakily camouflaged existing debts and.why egomaniacs and backstabbers were welcome at Enron.In this summary, you’ll venture into Enron’s past to learn about the fascinating people behind this infamous scandal, and will see how greed and deceit can lead to such a dramatic demise. But how does a respected company make it to the top of the business world, only to crumble into economic tragedy? Enron’s fall from grace is probably the most scandalous business story of our times, its skyrocketing profits followed by the largest bankruptcy case in US history. Enron Corporation, the once-dominant American energy, commodities, and services company, has come to be known as a synonym for fraud, corruption, and disastrous debts.
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