Enron :: GCSE Business Marketing Coursework

EnronExecutives at high-flying Enron Corp. (ENE ) never seemed excessively concerned with how the rest of the world viewed their business practices. Earlier this year, the California lawyer General had to get a court order to collect documents in an industrywide investigation into energy price fixing. And when an analyst challenged former CEO Jeffrey K. Skilling in a conference call to produce Enrons balance sheet, Skilling called him an ass----. Still, even few Enron executives worried that the company had gone too far with two analyzable partnerships set up in 1999 to buy company summations and hedge investments. With Enrons then-chief fiscal officer acting as general manager of the partnerships and in a position to personally benefit from their investments, the potential for a conflict of engross and backlash from investors seemed everywherewhelming. Internally, everybody said this is not a good idea, says a start close to the company.But no one could have predicted such a jaw-dropping outcome for the nations largest and most innovative energy trader. Since Oct. 16, when Enron revealed a $35 one thousand thousand charge to earnings to reflect losses on those partnerships and was forced to break $1.2 billion off its shareholders equity, the companys stock has plunged 60%. The Securities & Exchange Commission is examine Enrons accounting for its partnerships and whether it properly disclosed them to investors.Suddenly the company, which brought high-tech and complex pay to energy trading, is essentially trying to avoid a run on the bank. Moodys Investors Service has already downgraded the companys debt. Enron says it is meeting with credit agencies to calm their fears, and analysts say Enron is working(a) on a turnaround plan that would likely include accelerating asset sales, issuing shares, and obtaining new credit lines. Enrons board has set up a special committee to look into its controversial partnerships. But analysts also worry that Enrons t rading partners could pull the plug if they lose confidence that it can honour its trades.ON CRACK? Inside Enron, once-cocky employees are reeling. They were still puzzling over the abrupt Aug. 14 departure of CEO Skilling when the company announced on Oct. 24 that CFO Andrew S. Fastow, architect of the controversial private LJM investments--which got their name from the freshman initials of his wife and children--was removed from his post and on leave. In a strive meeting held at a Houston hotel after the latest financial disclosures, soft Chairman and CEO Kenneth L.