HOUSTON — December 2 marks an infamous day in Houston history. If you lived it, you probably don’t need a reminder of what happened 20 years ago today: the day Enron filed for Chapter 11 bankruptcy.
The Houston-based company got its start in 1985 when Kenneth Lay merged his Houston Natural Gas with Internorth and rebranded as Enron.
In the years that followed, what had been primarily a pipeline company branched out, adding oil, electric and natural gas power, then power plants.
Jeffrey Skilling officially came into the mix in 1990, though he’d worked as a consultant for years. Around this time, Enron starts morphing into a trading business. Skilling oversaw the company’s trading operation, while one of his first hires, Andrew Fastow, managed its financing. The major players -- Lay, Skilling and Fastow -- are building Enron into a huge energy trading empire.
The company put its name on Houston’s new ballpark, Enron Field, when it opened in April 2000. In August of that year, Enron’s stock value hit $90.56, its all time high.
In the '90s, the U.S. economy experienced its longest bull market in history, basically one big boom. But booms bust and heading into 2001, more companies were competing with Enron.
What we know now is that the company started to rely on questionable accounting practices to cover the bottom line, and the web that had taken 16 years to weave came undone fast.
That October, Enron posted a third-quarter loss of $638 million. The stock price plummeted from $90 to 26 cents by the end of November. That’s one thing if you’re an investor. It's something else entirely if you were one of Enron’s 29,000 employees and your 401(k) was tied to that stock price.
On Dec. 1, Enron's board voted to file for bankruptcy and officially did it on Dec. 2.
In the years that followed, 22 people -- including Skilling, Lay and Fastow -- were convicted on charges related to their actions at Enron. Lay died before he was sentenced, but Skilling served 12 years. Fastow served six. Lawmakers also took action, passing a new wave of regulations to prevent other companies from doing what Enron did.
Investors definitely took a hit, but the true victims were Enron workers, who walked away with a fraction of their 401(k).
What Enron whisteblower Sherron Watkins says today
KHOU 11's Jason Miles spoke with Sherron Watkins, who 20 years ago brought Enron down. Here are video clips from Jason's conversation with her.
What happened on Dec. 2, 2001
Whether justice was served
Explaining Enron's collapse
Thoughts on former Enron chief Ken Lay
