Medical Tuesday Blog

December

Jan 1

Written by: Del Meyer
01/01/2020 11:07 PM 

On December 2, 2001, the Enron Corporation files for Chapter 11 bankruptcy protection in a New York court, sparking one of the largest corporate scandals in U.S. history.

An energy-trading company based in Houston, Texas, Enron was formed in 1985 as the merger of two gas companies, Houston Natural Gas and Internorth. Under chairman and CEO Kenneth Lay, Enron rose as high as number seven on Fortune magazine’s list of the top 500 U.S. companies. In 2000, the company employed 21,000 people and posted revenue of $111 billion. Over the next year, however, Enron’s stock price began a dramatic slide, dropping from $90.75 in August 2000 to $0.26 by closing on November 30, 2001.

As prices fell, Lay sold large amounts of his Enron stock, while simultaneously encouraging Enron employees to buy more shares and assuring them that the company was on the rebound. Employees saw their retirement savings accounts wiped out as Enron’s stock price continued to plummet. After another energy company, Dynegy, canceled a planned $8.4 billion buy-out in late November, Enron filed for bankruptcy. By the end of the year, Enron’s collapse had cost investors billions of dollars, wiped out some 5,600 jobs and liquidated almost $2.1 billion in pension plans.

Over the next several years, the name “Enron” became synonymous with large-scale corporate fraud and corruption, as an investigation by the Securities and Exchange Commission and the U.S. Justice Department revealed that Enron had inflated its earnings by hiding debts and losses in subsidiary partnerships. The government subsequently accused Lay and Jeffrey K. Skilling, who served as Enron’s CEO from February to August 2001, of conspiring to cover up their company’s financial weaknesses from investors. The investigation also brought down accounting giant Arthur Andersen, whose auditors were found guilty of deliberately destroying documents incriminating to Enron. . .

On December 21, 1988, Pan Am Flight 103 from London to New York explodes in midair over Lockerbie, Scotland, killing all 243 passengers and 16 crew members aboard, as well as 11 Lockerbie residents on the ground. A bomb hidden inside an audio cassette player detonated in the cargo area when the plane was at an altitude of 31,000 feet. The disaster, which became the subject of Britain’s largest criminal investigation, was believed to be an attack against the United States. One hundred eighty-nine of the victims were American. In 2003, Libya accepted responsibility for the bombing, but didn’t express remorse. The U.N. and U.S. lifted sanctions against Libya and Libya agreed to pay each victim’s family approximately $8 million in restitution. In 2004, Libya’s prime minister said that the deal was the “price for peace,” implying that his country only took responsibility to get the sanctions lifted, a statement that infuriated the victims’ families. Pan Am Airlines, which went bankrupt three years after the bombing, sued Libya and later received a $30 million settlement. . .

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