Enron Corporation was an American energy , commodities , and services company based in Houston, Texas. It was founded by Kenneth Lay in as a merger between Lay's Houston Natural Gas and InterNorth , both relatively small regional companies at the time of the merger. At the end of , it was revealed that Enron's reported financial condition was sustained by an institutionalized, systematic, and creatively planned accounting fraud , known since as the Enron scandal.
Enron became synonymous with willful, institutional fraud and systemic corruption. The scandal brought into question the accounting practices and activities of many corporations in the United States and was a factor in the enactment of the SarbanesโOxley Act of It affected the greater business world by causing, together with the even larger fraudulent bankruptcy of WorldCom , the dissolution of the Arthur Andersen accounting firm, which had been Enron and WorldCom's main auditor, and coconspirator in the fraud for years.
Enron emerged from bankruptcy in November , under a court-approved plan of reorganization. A new board of directors changed its name to Enron Creditors Recovery Corp.
One of Enron's primary predecessors was InterNorth , which was formed in , in Omaha, Nebraska , just a few months after Black Tuesday. The low cost of natural gas and the cheap supply of labor during the Great Depression helped to fuel the company's early beginnings, doubling in size by Over the next 50 years, Northern expanded even more as it acquired many energy companies.
It was reorganized in as the main subsidiary of a holding company , InterNorth, a diversified energy and energy-related products firm. Although most of the acquisitions conducted were successful, some ended poorly.
