Jeff Skilling Resignation & Enron Collapse Timeline
May 1, 2001 – Apr 19, 2002
EXECUTIVE SUMMARY
Create a concise project brief from attached messages and citations.
Phase I: Skilling's Resignation and Initial Shock
May–Aug 2001Phase II: SEC Investigation, Restatement, and Failed Dynegy Merger
Nov 2001Phase III: Bankruptcy, Investigations, and Leadership Collapse
Dec 2001–Apr 2002CURRENT STATUS & UNDERSTANDING
FRICTION POINTS & DELAYS
1Skilling's Resignation and Initial Shock
May–Aug 2001In May 2001, vice chairman Cliff Baxter resigned amid concerns about Enron's financial practices [msg:445357][msg:322897]. On August 2, CFO Andy Fastow circulated a memo stating that LJM2 was no longer a "related party" for disclosure purposes, effectively removing transactions with his own partnership from public scrutiny [msg:443454]. Twelve days later, Jeff Skilling abruptly resigned as CEO, citing personal reasons initially, then telling the Wall Street Journal that the 50% stock-price drop drove his decision [msg:390859][msg:258200]. Ken Lay returned as CEO, and internal communications urged staff that it was "business as usual" [msg:390859].
Baxter Press Release
From: Karen Denne
ka***@enron.com
Attached is a draft press release announcing Cliff's resignation. This is scheduled to be issued tomorrow, following the distribution of the internal memo. Please let me know if you have any comments or changes. Thank yo...
Private Equity Transactions and LJM2 (From A Fastow)
From: Bridget Maronge
br***@enron.com
Please note that LJM2 Co-Investment, L.P. ("LJM2") is no longer a "related party" for purposes of disclosure in Enron's proxy and financial statements. Transactions may occur with LJM2 as with any other unrelated third p...
Jeff Skilling
From:
Change is inevitable (especially at Enron)! Although the announcement of Jeff Skilling's resignation is a surprise and generally sad news, it is important to remember that our business here in Portland will not be affect...
FW: WSJ Skilling Interview
From: Rahil Jafry
ra***@enron.com
Enron's Skilling Cites Stock-Price Plunge As Main Reason for Leaving CEO Post By John R. Emshwiller 08/16/2001 The Wall Street Journal Page A2 (Copyright (c) 2001, Dow Jones & Company, Inc.) Jeffrey K. Skilling said that...
Enron Mentions (re:Baxter-Sensitive) -- 01/25/02
From: Sarah Palmer
sa***@enron.com
Houston Chronicle, 01/25/2002 Former Enron exec Baxter dead CBS.MarketWatch.com, 01/25/2002 Former Enron Executive Baxter Kills Self, Police Say Bloomberg, 01/25/2002 Former Enron Executive Found Dead Associated Press, 0...
2SEC Investigation, Restatement, and Failed Dynegy Merger
Nov 2001By November, the SEC was investigating Enron's related-party deals [msg:250231]. Fastow was removed from ECT Investments' officer list on November 5 [msg:421184]. On November 8, Ken Lay announced a $1.2 billion equity charge and a restatement of earnings from 1997 through mid-2001, admitting that off-balance-sheet entities like JEDI and Chewco should have been consolidated [msg:8164]. Enron signed an $8.9 billion merger agreement with Dynegy on November 9, but the deal imposed strict interim operating limitations [msg:479869][msg:260272]. On November 28, Dynegy terminated the merger after Enron's credit was downgraded, and Enron's online trading system shut down [msg:15269][msg:260213].
Business Week Story- Enron's clout won't sway the SEC
From: Meredith Philipp
me***@enron.com
Steve Kean asked that I email this story to you ASAP NOVEMBER 12, 2001 BUSINESS WEEK FINANCE By Mike McNamee Commentary: Enron's Clout Won't Sway the SEC For Securities & Exchange Commission Chairman Harvey L. Pitt, the...
Remove Andrew S. Fastow from ECT Investments, List of officers
From: Sheila Glover
sh***@enron.com
Gary wants to remove Andy from the current list of officers for ECT Investments, Inc. He would like this filing done as soon as possible. Thanks Sheila OFFICERS: Title: Mark A. Frevert Chairman and Chief Executive Office...
SEC Information/Earnings Restatement
From: Chairman Ken
ch***@enron.com
Today we released additional information about our related party and off-balance sheet transactions. We have made this information available both on our website and in a Form 8-K filing with the Securities and Exchange C...
IMPORTANT VIDEO ANNOUNCEMENT
From: Chairman Ken
ch***@enron.com
I have a very important video announcement about the future of our company. Please go to <[Link: home.enron.com] to access the video. Thank you.
Enron Mentions - 11/09/01-11/10/01
From:
The New York Times, 11/10/01 Regulators Struggle With a Marketplace Created by Enron The New York Times, 11/10/01 COMPANIES & FINANCE INTERNATIONAL - Dynegy agrees to $7.8bn rescue bid for Enron. Financial Times, 11/10/0...
Merger Agreement
From:
Attached is an electronic version of the Merger Agreement that we executed with Dynegy. As is typical with these types of transactions, there are limitations imposed on Enron's operations between signing and closing of t...
Enron/Dynegy Merger; Antitrust Issues
From: Announcements Enron
an***@enron.com
As you know, Enron has signed a merger agreement by which Dynegy will acquire Enron. We expect the transaction to close following shareholder and regulatory approvals and various conditions to closing. Even though Enron...
Enron Mentions
From:
Dow Jones News Service, 11/28/01 Enron's Fall To Spark Volatility On Pwr, Natural Gas Mkts Dow Jones Energy Service, 11/28/01 Merger Collapse, Weak Fed Report, Rattle Investors at Midafternoon Dow Jones Business News, 11...
3Bankruptcy, Investigations, and Leadership Collapse
Dec 2001–Apr 2002Enron filed for Chapter 11 bankruptcy on December 2, 2001, one of the largest filings in U.S. history [msg:97970]. A Bankruptcy Management Committee was formed to coordinate with creditors and outside firms [msg:29183]. In January 2002, the Justice Department formed a criminal task force [msg:323421], reports emerged of widespread document shredding at Enron and its auditor Andersen [msg:323581], and Kenneth Lay resigned as chairman under pressure from the creditors' panel [msg:322927]. On January 25, former vice chairman Cliff Baxter was found dead of a self-inflicted gunshot wound [msg:322897]. Lay resigned from the board entirely on February 5 [msg:9652], and by April, president and COO Jeff McMahon had also stepped down as the company pursued reorganization under new leadership [msg:356685].
RE: Enron files for Chapter 11 owing US$13B
From: Chris Dorland
ch***@enron.com
What do you think I don't have the internet here? How you doing? Milly's meeting was pretty upbeat. I feel really good about everything today. I think there are about 4 different scenarios that could play out and all are...
Addt'l Enron Q&A Info
From: Julie Kearney
ju***@enron.com
You have many questions about how the bankruptcy will affect you. The HR team is endeavoring to answer these questions. Due to simple logistics, answering each question individually is very difficult. We are working to s...
Bankruptcy Management Committee
From: Chairman Enron
ch***@enron.com
In an effort to better organize the activities and minimize the expenses related to the Chapter 11 filing, we have formed the Bankruptcy Management Committee. There are many outside firms representing multiple parties th...
Enron Mentions -- 01/10/02-01/09/02
From: Karen Denne
ka***@enron.com
The New York Times, 01/10/2002 U.S. Puts Task Force on Criminal Probe of Enron The Wall Street Journal, 01/10/2002 U.S. opens criminal inquiry into Enron: Justice sets up probe of financial collapse Houston Chronicle, 01...
WSJ on Skilling short sale
From: Robert Gerry
ro***@enron.com
01/13/2002 Dow Jones News Services (Copyright ? 2002 Dow Jones & Company, Inc.) By Ken Brown Staff Reporter of The Wall Street Journal When Jeffrey Skilling resigned as chief executive of Enron Corp. in mid-August, he sa...
Enron Mentions (major papers only) -- 01/22/02-01/21/02
From: Sarah Palmer
sa***@enron.com
The Wall Street Journal, 01/22/2002 Ex-Enron staffer details shredding Firm ordered all data be kept Houston Chronicle, 01/22/2002 Second Executive Tells of Andersen E-mail --- Version of Events Bolsters Fired Auditor's...
Enron Mentions (major papers only) -- 01/24/02-01/23/02
From: Sarah Palmer
sa***@enron.com
Los Angeles Times, 01/24/2002 Enron Chief Quits Under Pressure And Calls Inquiries a Distraction The New York Times, 01/24/2002 Enron's Lay Resigns as Chairman, CEO --- Panel Appointed by Court Had Requested Change; Inte...
Enron Mentions (re:Baxter-Sensitive) -- 01/25/02
From: Sarah Palmer
sa***@enron.com
Houston Chronicle, 01/25/2002 Former Enron exec Baxter dead CBS.MarketWatch.com, 01/25/2002 Former Enron Executive Baxter Kills Self, Police Say Bloomberg, 01/25/2002 Former Enron Executive Found Dead Associated Press, 0...
Ken Lay Resigns from Board
From: Announcements Enron
an***@enron.com
In a press release, Ken said, "I want to see Enron survive and successfully emerge from reorganization. Due to the multiple inquiries and investigations, some of which are focused on me personally, I believe that my invo...
ORGANIZATIONAL CHANGES
From: Executive Office
ex***@enron.com
From: Stephen Cooper Date: Friday, April 19, 2002 I am disappointed to announce the resignation of Jeff McMahon as president and chief operating officer of Enron. Last fall, during tremendous turmoil within the organizat...
chevron_rightAdditional Related Emails (3)BACKGROUND
RE: Jeff Skilling resigns
From: J Kaminski
j.***@enron.com
I called you Tuesday and left a message on your voice mail. Jeff's address is: je***@enron.com Vince -----Original Message----- From: Joseph T Pokalsky <en***@juno.com>@ENRON [mailto:IMCEANOTES-Joseph+2...
RE: Enron Corp.: Enron's Skilling Cites Stock-Price Plunge As Main Reason for Leaving CEO Post
From:
Thanks so much; it was a tough week, but I am very proud of how the whole team handled it. Mark, Jeff and I worked on the attached and I agree with your assessment, but IR was not pleased. Hopefully, we can all move on n...
Enron Mentions
From:
InternetWeek, 08/20/01 UK: UK prompt electricity gains on outage talk. Reuters English News Service, 08/20/01 Danish shares close lower, led by NEG Micon after worse-than-expected earnings AFX News, 08/20/01 DENMARK: NEG...
