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Collaps Of An Empire

Collapse of an Empire

When Enron filed bankruptcy on December, 2001 the energy industry and financial world were in deep shock. Enron was one of the largest corporations in the United States; its estimate market value was over 70 billions before declaration of bankruptcy. Many investors considered it to be blue chip stock company, and have put lot of money and faith into the company. When the Enron Empire collapsed, not only its employees and investor went into deep grief, but the whole energy industry and financial world were also heavily affected. What had happened? What had gone wrong? What had turned this energy giant into an empty shell? Who is responsible for the fall of Enron?   Answers to these questions not only allow us to understand the cause of this tragedy, but also enable us to learn from the mistakes and prevent something similar to happen again. This paper will divide to four sections. First, it will give some background information about Enron; Second, it will discuss the issues and problem relate to this biggest bankruptcy case in the U.S history; Third, it will give explanations about the causes of this tragedy; finally, it will provide some opinions on what could have done and what should be done in the future.
Enron Corporation was formed in 1986 with the merger of Houston Natural Gas and Internorth from Omaha, Nebraska. Enron’s headquarters was based in Houston, TX. The original core businesses for the corporation were pipeline and selling natural gas. Enron was the biggest electricity and natural gas company in the United States. It was named “America’s Most Innovative Company” for six consecutive years. According to Enron’s financial statements and reports on business media, such as Wall Street Journal, Enron’s yearly income was over billions of dollars since the 90s. At early stage of Enron’s development, it focused on building and operating pipelines and power plants. Ownership of the enormous amount of natural gas and pipelines across...