The research I conducted throughout the semester was an event that happened on the day I was born it’s about the Enron Company, an American energy-trading company based in Houston, Texas that filed for chapter 11 bankruptcy protection on Dec 2, 2001 and ended on October 6, 2002.
This event caught my attention because it was a very drastic bankruptcy, sparking one of the largest corporate scandals in the U.S and Texas history. Another dramatic point was that finding out that the company had been lying to their investors and employees about debts and losing profits, while assuring their employees to buy more shares and to not worry that the company was on a rebound which cause the employees to lose all their life savings and when it was sent to court it had 35 counts including fraud, conspiracy and insider trading.
This were the reason why I chose this event, it brought me great curiosity that a great profited company made the turn to the worts and I wanted to find out what were the after effects of the Enron company going to bankruptcy and finding the reasons that cause this to happen and inside information of the employees to know what happened what they thought that really happened, with also finding out what happened in court.The primary sources I used to find the information were newspapers and I would go more in detailed about the topic.
The Enron employees seek voice in the bankruptcy and one of the former employees speaks up with others ,out of the 4,500 employees fired only 200 of the former employees are uniting together to claim their severance pay as it what said by Rod Jordan we’re about getting just due compensation for former employees and we also want equal representation.
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Because they were supposed to get 37,000 instead got 4,500 which is a crime as the company has to pay a certain amount that the employees deserve it also inform me how the company hided the information about their bankruptcy from their employees and investors to continue get money from them trying to save the company that was already in ruins too late to be saved and become a prosperous company that once was.
Another, horrible act that the company Enron made to save the company from bankruptcy was to blame Dynegy company for the bankruptcy and was trying to steal more money on them by suing them saying that Dynegy took advantage of its larger rival’s unpredictable financial situation and cause its downfall by backing out of the amalgamation days before Enron was forced to file for bankruptcy, because they didn’t invest their 8.4 billion dollars which is a huge lawsuit and another thing was that in the same day they filed for bankruptcy, which is false because the company Enron was already in a downfall but they still sued Dynegy Inc. saying lies that its was their fault as Bristow a Dynegy attorney said No one can show Dynegy made this happen and people were surprised that an excellent company as Enron went downhill as people were quoting that this company was the Titanic and it had gone down hill , for the bad decisions the Enron company made on the business causing them to go for bankruptcy.
Bankruptcy was also cause by the company not paying their taxes as the company Enron releases their tax records from 1985 to the time the company file for bankruptcy, this action was done by the congress to find out what caused and what bad decisions they made that the Enron company had to file for chapter 11 bankruptcy which is a form of bankruptcy that involves a reorganization of a debtor’s, business affairs, debts and assets which are the most expensive.
This would also help the congress see if laws need to be changed so this problem would never happen again to a another company and another drastic effect on the economy and our society as people lost their jobs would also not happen again.
Some Companies were lucky to not lose money as some executives were informed that the company Enron filed for bankruptcy so they quickly withdrew all their money so they would not lose what they invested but other companies were not so lucky that ended losing all the money they invested and their was also prove that for five years enron didn’t pay taxes which was another thing that cause the company to go for bankruptcy and be fined with criminal offenses. Not only were other companies losing money that had invested with Enron but also the employees as the company Enron had a program that gave the employees the opportunity to invest and buy stocks and some people lost their retiring money and we’re left with nothing and some were confident that they were not going to get the money they lost as Michelle Robichaux said I’m not confident well see that money and she lost $1million and the effect was that her retirement ideas were greatly devalued.
The person that was the head and CEO of the Enron company when it was filed for bankruptcy was Kenneth Lay which was once a exalted corporate leader with a prosperous company that had a bright future and turn to be a executive in exile with a company that was left in the dust without money and with a huge debt as he presents himself in the congress to testify what happen to the company and why it went into bankruptcy and how economically it turn out to be a company in ruins.It was also proven that the executives were living their lives to the fullest without a care that the company was in bankruptcy while the employees were trying to fight for their money that was stolen from them , like the titanic, men in the boats and children and women in the water but theirs it’s only a good explanation its that the CEO was not the man for the job because he brought the destruction of his own company this shows that he was not qualified to be a CEO for a big corporation, as John Allairo who worked in Enron company as business development said either he did not understand our business or he didn’t have a good judgement in business.
Although some people were saying that we were rushing to judge the company Enron because they might have done some not illegal business but not alot because have of their business were doing alright and everything was illegal, because was not answered why exactly did Enron have to file for bankruptcy when many of its business where real and working? and that question was never answered and as the Ceo was speaking in court he was never able to finish his speech and that question was lead hanging. But as more prove was showed of the crimes the company made that question was left unanswered.
The biggest news that hurt many people was that the government knew before it even happened that the company was going for bankruptcy as Rep. Henry Whatsman said It’s clear the White House had knowledge on what was happening with the company Enron and knew it was going to collapse but did nothing to try and protect the innocent employees and shareholders who ultimately lost their lives savings and as this was made public the White House was forced to answer questions and as they were answers a lot of the U.S. attorney’s disqualified itself from the investigation because they had family that worked on the company but one person that had no family that worked their investigated and that was Arthur Andersen and he found out that some documents were deleted but some were saved and were of money that the company profited and found more prove that brought the company more to the ground as their was more information found about all the bad decisions they made and the only good thing that came out was that the President Bush made a law so all this ordeal would never happen again to our society and to learn from the mistakes the company made so the economy doesn’t suffer with the people that lost their jobs and money.
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