Editing Enron (section)

== 2001 accounting scandals ==
{{Main|Enron scandal}}
In 2001, after a series of revelations involving irregular accounting procedures perpetrated throughout the 1990s involving Enron and its auditor [[Arthur Andersen]] that bordered on fraud, Enron filed for the then largest [[Chapter 11, Title 11, United States Code|Chapter 11 bankruptcy]] in history (since surpassed by those of [[Worldcom]] during 2002 and [[Lehman Brothers]] during 2008), resulting in $11 billion in shareholder losses.<ref>{{Cite web |url=https://oilprice.com/Energy/Energy-General/The-10-Biggest-Energy-Company-Bankruptcies.html |title=The 10 Biggest Energy Company Bankruptcies |date=October 10, 2014 |publisher=Oilprice.com }}</ref>

[[File:EnronStockPriceAugust2000toJanuary2001.svg|thumb|Stock Price of Enron from August 2000 to January 2002]]

As the scandal progressed, Enron share prices decreased from US$90 during the summer of 2000, to just pennies.<ref>{{cite web |url=http://www.gilardi.com/pdf/enro13ptable.pdf |title=Enron Corporation (ENRN Q) Common Stock Historical Price Table |publisher=Gilardi.com |access-date=January 29, 2019 |archive-url=https://web.archive.org/web/20171005050722/http://www.gilardi.com/pdf/enro13ptable.pdf |archive-date=October 5, 2017 |url-status=dead }}</ref> Enron's demise occurred after the revelation that much of its profit and revenue were the result of deals with special-purpose entities ([[limited partnership]]s which it controlled). This maneuver allowed many of Enron's debts and losses to disappear from its financial statements.<ref>{{Cite book |title=The encyclopedia of the industrial revolution in world history |others=Hendrickson, Kenneth E.|year=2014|isbn=978-0-8108-8888-3|location=Lanham|oclc=913956423}}</ref>

Enron filed for bankruptcy on December 2, 2001. In addition, the scandal caused the dissolution of Arthur Andersen, which at the time was one of the Big Five of the world's accounting firms. The company was found guilty of [[obstruction of justice]] in 2002 for destroying documents related to the Enron audit.<ref>{{Cite news|last=Eichenwald|first=Kurt|date=June 16, 2002|title=Andersen Guilty in Effort to Block Inquiry on Enron|language=en-US|work=The New York Times|url=https://www.nytimes.com/2002/06/16/business/andersen-guilty-in-effort-to-block-inquiry-on-enron.html|access-date=May 3, 2020|issn=0362-4331}}</ref> Since the [[U.S. Securities and Exchange Commission|SEC]] is not allowed to accept audits from convicted felons, Andersen was forced to stop auditing public companies. Although the conviction was dismissed in 2005 by the [[Supreme Court of the United States|Supreme Court]], the damage to the Andersen name has prevented it from recovering or reviving itself as a viable business even on a limited scale.

Enron also withdrew a naming-rights deal with the [[Houston Astros]] [[Major League Baseball]] club for its new stadium, which was known formerly as Enron Field (now [[Daikin Park]]).<ref>{{cite web|url=http://houston.astros.mlb.com/hou/ballpark/index.jsp|title=Minute Maid Park|website=Houston Astros Official Site|access-date=January 19, 2016|archive-date=September 5, 2015|archive-url=https://web.archive.org/web/20150905054343/http://houston.astros.mlb.com/hou/ballpark/index.jsp|url-status=dead}}</ref>

===Accounting practices===
Enron used a variety of deceptive and fraudulent tactics and accounting practices to cover its fraud in reporting Enron's financial information. Special-purpose entities were created to mask significant liabilities from Enron's financial statements. These entities made Enron seem more profitable than it was, and created a dangerous spiral in which, each quarter, corporate officers would have to perform more and more financial deception to create the illusion of billions of dollars in profit while the company was actually losing money.<ref>{{cite news|url=https://www.forbes.com/2002/01/15/0115enron.html|title="Enron the Incredible"|date=January 15, 2002|newspaper=Forbes}}</ref> This practice increased their stock price to new levels, at which point the executives began to work on [[insider trading|insider information]] and trade millions of dollars worth of Enron stock. The executives and insiders at Enron knew about the offshore accounts that were hiding losses for the company; the investors, however, did not. Chief Financial Officer [[Andrew Fastow]] directed the team that created the off-books companies and manipulated the deals to provide himself, his family, and his friends with hundreds of millions of dollars in guaranteed revenue, at the expense of the corporation for which he worked and its stockholders.{{citation needed|date=January 2012}}

[[File:Arthur Andersen Witnesses.jpg|thumb|Arthur Andersen employees, from left, Michael C. Odom, Nancy Temple, Dorsey Baskin Jr., and C.E. Andrews are sworn in as they appear before a House Committee on January 24, 2002.]]

In 1999, Enron initiated EnronOnline, an Internet-based trading operation, which was used by virtually every energy company in the United States. By promoting the company's aggressive investment strategy, Enron's president and chief operating officer Jeffrey Skilling helped make Enron the biggest wholesaler of gas and electricity, trading over $27&nbsp;billion per quarter. The corporation's financial claims, however, had to be accepted at face value. Under Skilling, Enron adopted [[mark-to-market accounting]], in which anticipated future profits from any deal were tabulated as if currently real. Thus, Enron could record gains from what over time might turn out to be losses, as the company's fiscal health became secondary to manipulating its stock price during the so-called [[Tech boom]].<ref>{{Cite book|title=The encyclopedia of the industrial revolution in world history|others=Hendrickson, Kenneth E.|year= 2014|isbn=978-0-8108-8888-3|location=Lanham|oclc=913956423}}</ref> But when a company's success is measured by undocumented financial statements, actual balance sheets are inconvenient. Indeed, Enron's unscrupulous actions were often gambles to keep the deception going and so increase the stock price. An advancing price meant a continued infusion of investor capital on which debt-ridden Enron in large part subsisted (much like a financial "pyramid" or "[[Ponzi scheme]]"). Attempting to maintain the illusion, Skilling verbally attacked Wall Street analyst [[Highfields Capital Management#Business|Richard Grubman]],<ref name="million">{{cite news|url=https://money.cnn.com/2006/04/10/news/newsmakers/enron_trial/index.htm|title=Skilling comes out swinging|last=Pasha|first=Shaheen|date=April 10, 2006|publisher=Money/CNN}}</ref> who questioned Enron's unusual accounting practice during a recorded conference telephone call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling replied, "Well, thank you very much, we appreciate that&nbsp;... asshole." Though the comment was met with dismay and astonishment by press, Wall Street analysts and public,<ref name=mclean/>{{rp|325–6}} it became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling's offensiveness.<ref>{{Cite web|url=http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x319539|title=Skilling to skeptical financial analyst, "Thanks asshole" – Democratic Underground}}</ref><ref>{{cite web|url=https://www.cnbc.com/2015/02/12/clean-up-your-act-musk-teslas-a-total-disaster.html|title=Clean up your act Musk, Tesla's a total disaster!|website=[[CNBC]]|date=February 12, 2015|publisher= [[Mad Money]]|author=Stevenson, Abigail}} Enron named.</ref>

===Post-bankruptcy===
Enron initially planned to retain its three domestic pipeline companies as well as most of its overseas assets. However, before emerging from bankruptcy, Enron sold its domestic pipeline companies as CrossCountry Energy for $2.45 billion <ref>{{Cite journal|last=Shook|first=Barbara|date=September 3, 2004|title=Deals Mark Demise of Energy Merchant Business|url=http://www.highbeam.com/doc/1G1-121550619.html|archive-url=https://web.archive.org/web/20150903223316/http://www.highbeam.com/doc/1G1-121550619.html|url-status=dead|archive-date=September 3, 2015|journal=[[Oil Daily]]|publisher=Energy Intelligence Group, Inc.|access-date=June 22, 2014}}</ref> and later sold other assets to [[Vulcan Capital Management]].<ref>{{cite web|url=http://capital.vulcan.com/pdf/release_20040809.pdf|title=Vulcan's pipeline grip|archive-url=https://web.archive.org/web/20121028162512/http://capital.vulcan.com/pdf/release_20040809.pdf|archive-date=October 28, 2012|publisher=Investing Private Capital|date=August 2004}}</ref>

Enron sold its last business, [[Prisma Energy]], during 2006, leaving Enron asset-less.<ref>{{Cite web|url=http://www.marketwatch.com/story/enron-closes-sale-of-prisma-energy-to-ashmore|title=Enron closes sale of Prisma Energy to Ashmore|last=Hunt|first=Katherine|website=MarketWatch|access-date=April 1, 2016}}</ref> During early 2007, its name was changed to Enron Creditors Recovery Corporation. Its goal was to repay the old Enron's remaining creditors and end Enron's affairs. In December 2008, it was announced that Enron's creditors would receive $7.2 billion from the company's liquidation (approximately 17 percent of the debts owed by the company). After [[Citigroup]] and [[JP Morgan Chase]] were sued for their role in abetting Enron's practices with loans, the two companies agreed to give billions of dollars to Enron's creditors. By May 2011, $21.8 billion had been distributed to the creditors, totaling 53 percent of Enron's debts at the time of bankruptcy.<ref>Linda Sandler, [https://www.bloomberg.com/news/articles/2012-01-13/enron-creditors-pocket-21-8-billion-in-cash-stock-1- "Enron Creditors Get 53 Percent Payout, Aided by Lawsuit Accords"], [[Bloomberg News]], January 14, 2012.</ref><ref>[https://web.archive.org/web/20130726190938/http://www.enron.com/ "Enron Creditors Recovery Corp."], archived at the [[WayBack Machine]] on July 26, 2013.</ref> Enron Creditors Recovery Corporation was ultimately dissolved on November 28, 2016.<ref>[https://opencorporates.com/companies/us_tx/0011128906 "Enron Creditors Recovery Corp."], [[OpenCorporates]].</ref>

Azurix, the former water utility part of the company, remains under Enron ownership, although it is currently asset-less. It is involved in several litigations against the government of [[Argentina]] claiming compensation relating to the negligence and corruption of the local governance during its management of the Buenos Aires water concession in 1999, which resulted in substantial amounts of debt (approx. $620&nbsp;million) and the eventual collapse of the branch.<ref>{{Cite web|url=http://www.indyprint.info/wp-content/themes/expansion/development/merchantcashadvance.html|title=Merchant Cash Advance Executive Comes Clean On Industry's Dirty Lending Tactics|website=IndyPrint.info|access-date=November 3, 2016|archive-url=https://web.archive.org/web/20161104045837/http://www.indyprint.info/wp-content/themes/expansion/development/merchantcashadvance.html|archive-date=November 4, 2016|url-status=dead}}</ref>

Soon after emerging from bankruptcy in November 2004, Enron's new board of directors sued 11 financial institutions for helping Lay, Fastow, Skilling, and others hide Enron's true financial condition. The proceedings were dubbed the "megaclaims litigation". Among the defendants were [[Royal Bank of Scotland]], [[Deutsche Bank]] and Citigroup. {{As of|2008}}, Enron has settled with all of the institutions, ending with Citigroup. Enron was able to obtain nearly $7.2 billion to distribute to its creditors as a result of the megaclaims litigation.<ref>{{cite web |url=http://edition.cnn.com/2008/US/09/09/enron.settlement/index.html |title=Enron investors to split billions from lawsuit |publisher=CNN |access-date=July 20, 2017 |archive-date=November 21, 2020 |archive-url=https://web.archive.org/web/20201121110915/http://edition.cnn.com/2008/US/09/09/enron.settlement/index.html |url-status=dead }}</ref> As of December 2009, some claim and process payments were still being distributed.

Enron has been featured since its bankruptcy in popular culture, including in ''[[The Simpsons]]'' episodes "[[That '90s Show (The Simpsons)|That '90s Show]]"     (Homer buys Enron stock while Marge chooses to keep her own [[Microsoft]] shares) and "[[Special Edna]]", which features a scene of an Enron-themed amusement park ride. The 2007 film ''[[Bee Movie]]'' also featured a joke reference to a [[parody]] company of Enron called "Honron" (a play on the words honey and Enron). The 2003 documentary [[The Corporation (2003 film)|''The Corporation'']] made frequent references to Enron post-bankruptcy, calling the company a "bad apple".