Enron- What hapenned there?

[marcoddy]

Hi, could someone pleass tell me what happened with the enron fiasco? I've heard there was much dodgy dealing going right up in the american government, but I don't know what.... i'm sure some clever sausage out there could explain it!

Thanks in advance

[DMA]

I think the bottom line was that they set up loads of companies to sell the gas etc to and from and not a lot of people knew how much debt the company had. Off Balance sheet Financing or summink.

Offshore companies buying off one related company and selling to another related company but not declared as related I think.

I think it was a complicated tax avoidance scheme which hid the real financial state of the company as a whole.

The trial is current I believe.

[metagirl]

The company was in part responsible for fleecing the state of California over energy supplies and therefore indirectly responsible for a series of blackouts that hit the state. Otherwise I think they are up for bad accounting practices and bankrupting their employees' pensions scheme. Here's an old article for some background:

enron