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Quick answers
When did Enron go bankrupt?
Enron filed for Chapter 11 protection on 2 December 2001 in the Southern District of New York bankruptcy court, after restatements, an SEC inquiry, and the collapse of a proposed Dynegy merger.
Who was convicted?
Jeffrey Skilling was convicted in 2006 in the Southern District of Texas. Andrew Fastow pleaded guilty in 2004. Kenneth Lay was convicted in 2006 but died before sentencing; that conviction was vacated. Other employees and bankers faced separate cases.
What happened to Arthur Andersen?
A Houston jury convicted Andersen in 2002 of obstruction of justice related to document destruction. The Supreme Court reversed the conviction in 2005, but the firm had already lost its public-company audit practice.
What is the Powers Report?
A February 2002 report by a special committee of Enron's board, chaired by William C. Powers Jr., describing the LJM partnerships, Raptor structures, and board oversight failures. It is a primary public narrative of the accounting.
How did Sarbanes-Oxley relate to Enron?
Congress passed the Sarbanes-Oxley Act in 2002 after Enron and related collapses, including WorldCom. The Act created the PCAOB, expanded auditor-independence rules, and required executive certification of filings.
What does mark-to-market mean in this case?
Enron booked estimated fair values of certain long-term contracts as current earnings. Courts and the Powers committee treated the abuse as lying in unsupported valuations and related-party hedges, not in the mere existence of fair-value accounting.
Enron's public story is a completed accounting-fraud case: a celebrated trader, a set of related-party structures, a restatement, and a bankruptcy that Congress answered with a statute.
The beats below follow the sequence in the Powers Report and the Houston dockets rather than the film shorthand.
Beats
- Pipeline company to trading floor
After the 1985 Houston Natural Gas-InterNorth merger, Enron became a large trader of energy contracts and a symbol of U.S. market deregulation.
- Earnings that needed vehicles
Mark-to-market gains and special-purpose entities, including Fastow-related LJM partnerships and the Raptors, kept reported numbers ahead of cash and of some debts.
- Watkins, restatement, Dynegy
Skilling's August 2001 resignation, Watkins's letter to Lay, the October charge, and the failed Dynegy deal turned a valuation debate into a run on confidence.
- Bankruptcy and Andersen
The 2 December 2001 filing and the Andersen obstruction case made Enron a national political event, not only a Houston bankruptcy.
- Pleas, trial, statute
Fastow's 2004 plea, the 2006 Lay-Skilling verdicts, and Sarbanes-Oxley (2002) are the legal ending most encyclopedias record.
The story on the public record is not whether Enron failed. It is how the earnings story was built and how Congress and the Houston jury answered.
Public-record encyclopedia. Not legal advice. Not a how-to. Graphic detail is withheld. Wars belong in a separate atlas.