In 2001 Enron Corporation, energy and commodities trading company, became the largest company ever to file for Chapter 11 bankruptcy protection. Many people lost their jobs, retirement and in one case their life. This is the story behind it.
In 1985 two of the largest natural gas companies in the United States merged together to form what, in 1986, became known as Enron Corporation. InterNorth, a gas pipeline company out of Omaha, Nebraska, and Houston Natural Gas of Texas joined together to form the largest natural gas company in the United States. The newly formed Enron had roughly 37,000 miles of natural gas pipeline throughout the mid-west and into Texas. The new company, which was centered in Houston, named Kenneth Lay the chief executive officer and began to expand rapidly.
With Lay at the helm Enron began the transformation from a local gas pipeline company into the largest marketer of natural gas in North America and the United Kingdom. They began trading natural gas commodities in 1989 as well as electricity in 1994 and became the largest marketer of electricity in the United States shortly thereafter. Lay was unsatisfied with trading only gas and electricity and began branching out and trading commodities such as; metals, coal, chemicals, fiber-optic bandwidth, and paper. Lay also acquired Portland General Electric, one of the largest providers of electricity in the state of Oregon. .
Enron's rapid growth had a similar effect on the price of Enron stock. In this time span it had grown from less than $10 per share, in 1991, to a peak of $90 per share in 2000. In a two year span from 1998 to 2000 Enron's reported revenues had gone from $31 billion to over $100 billion. This increase boosted Enron to the seventh-largest company in the United States, according to the Fortune 500, in 2001. Enron also became the sixth-largest energy company in the world by March of 2001. .
With Kenneth Lay as the CEO the company was soaring to new heights, it seemed like the only direction to go was up; that was until 2001, then things started to head south.