Enron facts for kids
Logo (designed by Paul Rand) used from 1996 to 2001. This was Rand’s final major logo before his death in November 1996.
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1400 Smith Street, the former headquarters of Enron in Downtown Houston, Texas (now occupied by Chevron Corporation).
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| Public | |
| Traded as | NYSE: ENE |
| Industry | Energy |
| Fate | Bankruptcy |
| Predecessor |
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| Successor |
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| Founded | 1985 in Omaha, Nebraska, United States |
| Founder | Kenneth Lay |
| Defunct | 2001 |
| Headquarters |
1400 Smith Street
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Houston, Texas United States
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Area served
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United States, India, Caribbean, Brazil |
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Key people
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| Services | Energy |
| Revenue | $100.789 billion |
| $979 million | |
| Total assets | $67.503 billion |
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Number of employees
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29,000 (2001) |
| Divisions | Enron Energy Services (EES) Enron Xcelerator |
Enron Corporation was a large American energy company. It was based in Houston, Texas. Enron became very well known for its business practices.
At its peak, Enron had about 22,000 employees. It was a major player in the energy market. However, the company faced big problems. In 2001, it was discovered that Enron had been hiding its debts. This made the company's financial health look much better than it actually was. This practice is called accounting fraud.
Because of these issues, Enron went bankrupt in late 2001. The company officially closed in 2007. The Enron scandal became a famous example of corporate wrongdoing. It led to new rules for how companies report their finances.
Contents
What Was Enron?
Enron started in 1985. It was formed when two companies, InterNorth and Houston Natural Gas, merged. The company's founder was Kenneth Lay. Enron quickly grew into a giant in the energy world. It traded electricity and natural gas.
How Enron Grew
Enron did not just sell energy. It also traded things like weather futures. This meant they made bets on what the weather would be like. They also invested in many different projects around the world. This helped them grow very fast.
Enron's Business
Enron became a leader in energy trading. They bought and sold energy contracts. They also owned pipelines and power plants. This made them seem very successful. Many people thought Enron was a modern and innovative company.
The Enron Scandal
The Enron scandal happened because the company used tricky accounting methods. They created special companies. These companies were used to hide Enron's debts. This made Enron's profits look much higher than they were.
Hiding the Truth
Enron's leaders wanted the company to look strong. They used complex financial tricks. This made it hard for outsiders to see the real situation. The company's financial statements did not show the full picture.
Key People Involved
Several top executives were involved. Kenneth Lay was the founder and CEO. Jeffrey Skilling was another important leader. Andrew Fastow was the chief financial officer. These individuals played key roles in the company's operations.
Enron's Downfall
In 2001, the truth about Enron's finances came out. This caused a huge loss of trust. Investors and the public were shocked. The company's stock price fell very quickly.
Bankruptcy and Impact
Enron filed for bankruptcy in December 2001. This was one of the largest bankruptcies in U.S. history. Thousands of employees lost their jobs. Many also lost their retirement savings. These savings were invested in Enron stock.
New Rules for Companies
The Enron scandal led to new laws. One important law was the Sarbanes-Oxley Act of 2002. This law made rules stricter for how companies report their money. It aimed to prevent similar scandals from happening again. It also made company leaders more responsible for their financial reports.
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