HOUSTON - It was one of the more spectacular corporate bankruptcies ever: Enron Corp., once the seventh-largest company in the country, felled by intricate and illegal accounting tricks.
But as the disgraced company limped toward Chapter 11 closure in 2004, the second-largest bankruptcy in history behind Wo rl dCom seemed almost secondary — the public’s focus shifted to criminal proceedings against Enron founder Kenneth Lay and former CEO Jeffrey Skilling. Both were indicted this past year, pleading innocent to charges that include conspiracy and fraud, and are awaiting trial.
The bankruptcy case reduced the former energy trading conglomerate first to an operator of pipelines and power plants, and ultimately to a holding company responsible for paying off debts.
‘‘Shareholders are gone, and the company is different. What people associate with Enron now is Lay and Skilling,’’ said David Skeel, a University of Pennsylvania bankruptcy law expert.
As 2005 approaches, trial dates for Lay, Skilling and former Enron chief accounting officer Richard Causey have not yet been set. Skilling and Causey each face more than 30 counts, including fraud, conspiracy and insider trading, on charges of being in on various schemes to fool investors into believing Enron was financially healthy so they could pocket millions from sales of inflated stock. Lay faces seven counts of fraud and conspiracy on allegations of taking over leadership of the financial ruse upon Skilling’s resignation in mid-August 2001, less than three months before Enron crumbled into bankruptcy.
In a separate case, Lay is also charged with one count of bank fraud and three counts of lying to banks for allegedly misleading them about his intention to use $75 million in personal loans to buy Enron stock on margin.
But first, five former executives from Enron’s defunct broadband unit are scheduled to go to trial April 1. Three — former unit CEO Joseph Hirko, and former vice presidents Rex Shelby and F. Scott Yeager — are accused of fraud, conspiracy, insider trading and other counts for allegedly touting the broadband network as having capabilities it didn’t have so they could sell shares of stock inflated on the hype.
The remaining two — former accounting executives Kevin Howard and Michael Krautz — are accused of faking $111 million in 2000-01 from a video-on-demand deal with Blockbuster that flopped.
Enron crashed in December 2001 upon revelations of partnerships and financing schemes that hid debt and inflated profits. U.S. Bankruptcy Judge Arthur Gonzalez confirmed Enron’s reorganization plan in July 2004, which aims to pay most creditors about one-fifth of the estimated $63 billion they’re owed.
The plan went effective in mid-November, finally canceling nearly dead Enron stock and turning it into a private company.
The same day, the company closed on the $2 billion sale of its most prized remaining assets — whole or part ownership in three domestic natural gas pipelines that employ about 1,200 people.
Still pending is a $1.25 billion sale of Portland General Electric, Enron’s Pacific Northwest utility, to a holding company backed by Texas Pacific Group. The utility employs about 2,600 people.
A third company that hasn’t enticed serious buyers — Prisma Energy International — is no longer under Enron’s umbrella and operates a hodgepodge of pipeline and power assets with 4,700 employees in 14 countries under its own management.
Enron’s main business now is handling lawsuits, cooperating with investigations and eventual distribution of about $12.8 billion to creditors — 92 percent in cash and 8 percent in stock in Prisma.
If the Portland General sale falls through, creditors will receive less cash and stock in both Prisma and the utility.
Distributions are expected to begin in mid-2005, and the Enron name will linger as long as they and lawsuits need to be addressed, spokeswoman Jennifer Lowney said.
About 500 workers — including five new directors appointed by the disbanded creditors committee and one of the bankruptcy examiners — remain for a company that once employed more than 20,000 worldwide.
‘‘It makes strategic sense to maintain it,’’ Skeel said of the remaining corporation. ‘‘It’s yet another way to try to distance what came out of bankruptcy from what went into bankruptcy.’’
Amy Rios, an administrative assistant, survived the thousands of layoffs when Enron collapsed, but she’ll be gone too at the end of the year.
‘‘It is definitely bittersweet,’’ she said. ‘‘I love the group I work with, but it was good for me to have closure on it and pursue other things I’d like to do. I had thought of leaving, and I did a couple of interviews, but I kind of wanted to stick around as long as I could and see how things go.’’
If there are any winners in the bankruptcy case, it is the lawyers, consultants, accountants and other professionals, who have earned nearly $1 billion in fees.