Enron Corporation - Crooked E Vignette - Printed Signature of Jeff McMahon - 2004 dated Stock Certificate - Famous Fraudulent Company
Inv# GS1303 Stock
Stock printed by American Bank Note Co. Engraving of the now famous "Crooked E". Destined to become one of the most historic modern stocks. Printed signature of Jeff McMahon.
Jeff McMahon, the head of industrial markets, succeeded Fastow as CFO. His initial challenge was to address a cash crisis. A day prior, Enron realized it was unable to roll its commercial paper, effectively losing access to several billion dollars in financing. The company had been struggling to sell its commercial paper for a week, but now it was unable to sell even overnight paper. On October 27, Enron initiated a buyback of its commercial paper, valued at approximately $3.3 billion, in an attempt to alleviate investor concerns about the company’s cash supply. To finance the re-purchase, Enron depleted its lines of credit at several banks. While the company’s debt rating remained investment-grade, its bonds were trading at slightly lower levels, posing challenges for future sales. It soon became evident that Fastow had been excessively focused on creating off-balance sheet vehicles, neglecting some fundamental aspects of corporate finance. McMahon and a “financial SWAT team” assembled to find a solution to the cash crisis discovered that under Fastow’s leadership, Enron operated on a quarterly basis. Fastow had failed to establish procedures for tracking cash or debt maturities, which were standard for companies of Enron’s stature. Consequently, Enron was effectively illiquid.
Enron Corporation was an American company specializing in energy, commodities, and services, headquartered in Houston, Texas. Founded in 1985 by Kenneth Lay through the merger of Lay's Houston Natural Gas and InterNorth, both of which were relatively small regional firms. Prior to its bankruptcy on December 3, 2001, Enron employed around 29,000 individuals and was a significant player in the electricity, natural gas, communications, and pulp and paper sectors, boasting reported revenues of nearly $101 billion in 2000. Fortune recognized Enron as "America's Most Innovative Company" for six consecutive years.
At the close of 2001, it was disclosed that Enron's financial statements were maintained through a systematic, institutionalized, and creatively orchestrated accounting fraud, which has since been referred to as the Enron scandal. Enron has since become a prominent case study of deliberate corporate fraud and corruption. This scandal raised serious concerns regarding the accounting practices of numerous corporations in the United States and contributed to the passage of the Sarbanes–Oxley Act of 2002. Additionally, the scandal had a significant impact on the broader business community, leading to the dissolution of the Arthur Andersen accounting firm, which had served as Enron's primary auditor for many years.
In late 2001, Enron filed for bankruptcy in the Southern District of New York and appointed Weil, Gotshal & Manges as its legal counsel for the bankruptcy proceedings. The bankruptcy was concluded in November 2004, following a court-sanctioned reorganization plan. A newly established board of directors renamed the company Enron Creditors Recovery Corp., focusing on the reorganization and liquidation of certain operations and assets from the pre-bankruptcy Enron. On September 7, 2006, Enron divested Prisma Energy International Inc., its final remaining business, to Ashmore Energy International Ltd. (now AEI).
A stock certificate is issued by businesses, usually companies. A stock is part of the permanent finance of a business. Normally, they are never repaid, and the investor can recover his/her money only by selling to another investor. Most stocks, or also called shares, earn dividends, at the business's discretion, depending on how well it has traded. A stockholder or shareholder is a part-owner of the business that issued the stock certificates.
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