How did Enron go bankrupt?
How did a company, with nearly 21,000 employees in over 30 countries and stated revenues of more than $100 billion, run out of cash? While government investigators are still exploring the precise reasons why the global energy giant suddenly declared bankruptcy on Dec. 2, 2001, there are key events that led to the company’s dissolution. In early July, Enron surprised its investors by saying it would post a large loss in its quarterly statement. The company blamed losses on the California energy crisis, poor results from its investments in India and South America, and a moribund broadband Internet market. Then, in August, CEO Jeffrey Skilling unexpectedly resigned after a brief six-month tenure in the top spot. Skilling claimed the move was for “personal reasons,” but investors were left stunned and anxious about the stability of Enron. Sometime between July and October, the Securities and Exchange Commission began an inquiry into Enron’s troubling losses. In October, Enron said it would
