Tag Archives: bankruptcy

Enron was an American energy company that went through a scandalous bankruptcy in 2001.  It was a very powerful company that gained its popularity through marketing and having a very high stock market value.  It was named the “Most Innovative Company” by Forbes for six years in a row.  The company’s downfall appeared to come from its use of mark-to-market accounting, which is recognizing future revenue in the present.  In this way, it appeared that the company’s revenue was sky high, and the company was thus able to hide its huge debt.  This debt was eventually discovered after many questions were raised against the actions of the company, and Jeffrey Skilling, the former President and CEO, brushed them off without realizing the consequences.  Shareholders, as a whole, lost around $11 billion in the bankruptcy of Enron.