Enron Corporation

Houston energy trader and 'most innovative company in America', seventh-largest US company by revenue in 2000.

A company that moved debt into off-balance-sheet partnerships and booked projected profits as earned while telling investors the picture was sound.

Enron was formed in 1985 from the merger of Houston Natural Gas and InterNorth and, under Kenneth Lay and Jeffrey Skilling, turned itself from a pipeline company into an energy trader valued at about $70 billion. Debt was moved into partnerships that its balance sheet did not show and projected profits were booked as earned. Skilling became CEO in February 2001 and resigned in August; the company restated its accounts in October and filed for Chapter 11 on 2 December 2001, then the largest bankruptcy in US history. Skilling and Lay were convicted in May 2006; Enron Creditors Recovery Corp wound the estate down and creditors eventually got about 53 cents on the dollar.

Liquidation plan approved 2004; general unsecured creditors recovered ~53% (~$21.8B in cash and stock by 2011). Investor class action recovered $7.2B from banks, auditors and directors (distributions from December 2008), including $1.7B from Citigroup. Auditor Arthur Andersen was convicted of obstruction in 2002 (reversed 2005) and collapsed.