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From: Lois Battuello <[EMAIL PROTECTED]>
To: Catherine Austin Fitts <[EMAIL PROTECTED]>; Linda Minor <[EMAIL PROTECTED]>
Date: Thursday, December 20, 2001 7:29 PM
Subject: Enron Chronology from Wall Street Journal
December 20, 2001Major Business News
A Chronology of Enron's Recent Woes
Dec. 19:1 J.P. Morgan Chase & Co. said its exposure to Enron was nearly $1 billion more than the $900 million that it already has disclosed, raising concern that the bank has more exposure still lurking. Following in the footsteps of its energy-sector competitors, Williams Cos. will restructure2 to appease jittery debt-rating agencies in the wake of Enron's collapse. The credit rating of Mirant was downgraded3 to junk status by Moody's Investors Service Inc., making the power generator the latest in a growing list of energy companies to suffer from tightening credit standards following Enron's collapse. FleetBoston will take a $150 million pretax charge to write down troubled loans4 from customers, including Enron.
Dec. 18:5 Many Enron employees face greater losses to their retirement income than was immediately apparent, stemming not only from big hits in their 401(k) retirement-savings plans but also as a result of changes involving pension and retirement-savings plans. Credit agencies crack down6 on power companies, warning them to slash debt, after falling asleep when California's deregulated energy market imploded and acting slowly to Enron's demise.
Dec. 17:7 Dynegy announces a $1.25 billion capital-restructuring program to boost its cash holdings and trim debt. The company has been swept up in a crisis of confidence by investors in the energy trading market following Enron's collapse. The Royal Bank of Scotland is under fire8 from fund managers for its refusal to disclose its exposure to Enron. Volumes surge9 at several major online-trading firms amid heavy trading in Enron shares as the company lurches toward bankruptcy.
Dec. 14:10 Moody's Investors Service downgrades its credit ratings of Calpine and Dynegy unit Dynegy Holdings. Following Enron's collapse, Moody's stressed the risks posed by high leverage and reduced access to capital markets.
Dec. 1311: A handful of congressional panels and regulators are investigating the causes of Enron's plunge into Chapter 11 bankruptcy protection, which may lead to new regulations spurring additional oversight of accounting firms. Questions are also rising about Enron's outside auditor, Arthur Andersen which did double-duty work12 for the company.
Dec. 12:13 Enron unveils a one-year plan to restructure its way out of trouble, including a reorganization around its core businesses. Chief Executive Officer Kenneth Lay declines to testify14 at a joint hearing of two House panels as Congress begins a painstaking investigation into the company's financial troubles. The energy-trading giant had aggressively lobbied Congress15 in support of a little-noticed bill that allowed Enron to shape the industry without much government interference.
Dec. 11:16 The fallout continues to radiate, as Calpine, maybe the most aggressive power-plant builder in the U.S., defends its financial structure and says it doesn't deserve to be compared with Enron. The 4,500 employees let go by Enron are stunned by the quick trip17 from what they deemed corporate nirvana to the unemployment line.
Dec. 9:18 Citigroup and UBS work to finalize separate bids to take over Enron's trading operations, the first step toward a potential bankruptcy-court auction for the flagship business. Learning from the Enron experience, some rating agencies say they will try harder to tip off investors19 to potentially devastating credit downgrades.
Dec. 6:20 Job cuts continue at Enron, with 200 Houston workers laid off at the company's natural gas and electricity trading unit, Enron Americas. The bankruptcy court proceedings21 start to take shape; U.S. Bankruptcy Judge Arthur Gonzalez, who will hear the Enron case, is known as a stickler for detail.
Dec. 5:22 Enron pays $55 million to about 500 employees that it considers critical to its survival, as it seeks to emerge from bankruptcy-court protection as a slimmed down commodity trading outfit. Enron's bonds climb as "vulture" investors scooped up Enron's bonds23 and bank loans, sensing a bargain. Despite Enron's plight, deregulation of energy24 remains a priority across the globe. Meanwhile, Dynegy, seeking to reassure investors25 about its financial health, says its short-term borrowings of nearly $1 billion over the past week aren't related to its failed attempt to acquire Enron.
Dec. 4:26 Enron's highly questionable financial engineering, misstated earnings and persistent efforts to keep investors in the dark were behind its collapse. The Belfers, a wealthy New York oil family, could stand to lose27 as much as $2 billion due to the tailspin in Enron's stock, while the collapse of talks between Enron and Dynegy has raised a potential conflict in the negotiations28 involving Lehman Bros.
Dec. 329: Enron secures almost $1.5 billion in debtor-in-possession financing and presses negotiations for an additional lifeline for its energy-trading operations. The company also announces it has laid off 4,000 people in Houston.
Dec. 230: Enron files for protection from creditors in a New York bankruptcy court, the biggest such filing in U.S. history. Simultaneously, the Houston-based energy firm sued Dynegy31 for "not less than $10 billion," accusing it of wrongfully terminating their merger deal. Enron Europe cuts roughly 1,100 jobs32 in the United Kingdom just a day after its European energy-trading arm sought protection from creditors.
Nov. 30: The Wall Street Journal reports the SEC is investigating the actions of Arthur Andersen33 LLP, Enron's auditor, and federal prosecutors in New York and Texas want to monitor34 the SEC's investigation into possible accounting fraud at Enron.
Nov. 2935: Enron's financial travails reverberate around the globe, roiling markets and manufacturers and threatening to derail deregulation36 of the U.S.'s energy markets. Large energy companies will fail to collect about $600 million37 owed them by Enron if the energy-trading firm winds up in bankruptcy court.
Nov. 28:38 Enron appeared near collapse after credit-ratings agencies downgraded its debt to junk status. Dynegy called off its planned merger with the rival energy concern following the announcements.
Enron's woes could have widespread consequences39 for scores of companies across the economy.
The government is unlikely to bail out Enron40 if it goes under.
Energy trading41 is sent reeling as EnronOnline is shut down.
The merger was scuttled when Standard & Poor's lowered42 Enron's credit rating to "junk" status.
Enron CEO's political connections43 run silent during firm's crisis.
Mutual funds may get hit44 by Enron's meltdown.
Enron asks laid-off workers to waive legal claims45 against it in exchange for some of their severance payments.Nov. 27:46 Enron and Dynegy work to save their deal amid the threat of a credit downgrade to Enron's debt. Bankers have a big stake47 in the merger succeeding.
Nov. 26:48 Enron has advanced talks to cut the price of the all-stock acquisition by Dynegy by more than 40% to about $5 billion.
Nov. 23:49 The Wall Street Journal reports that Enron is being sued by members of its employee-retirement plan, which has suffered losses because of its plunging stock price.
Nov. 20:50 Enron warned that continuing credit worries, a decline in the value of some of its assets and reduced trading activity could hurt its fourth-quarter earnings.
Nov. 951: Dynegy announces a deal to buy Enron for about $7 billion in stock. ChevronTexaco will inject $1.5 billion into the deal immediately, and an additional $1 billion upon closing.
Nov. 852: Enron reduces its previously reported net income dating back to 1997 by $586 million, or 20%, mostly due to improperly accounting for its dealings with the partnerships run by some company officers.
Nov. 153: Enron says it has secured commitments for $1 billion in financing from units of J.P. Morgan and Citigroup.
Oct. 3154: The SEC elevates to a formal investigation its inquiry into Enron's financial dealings.
Oct. 2955: Moody's lowers its ratings by one notch on the Enron's senior unsecured debt and kept the company under review for a possible further downgrade.
Oct. 2556: The company draws down about $3 billion, the bulk of its available bank credit lines.
Oct. 24:57 Enron replaces Mr. Fastow as CFO with Jeffrey McMahon, the 40-year-old head of the company's industrial-markets division.
Oct. 2258: Enron announces SEC will begin a probe of company's "related party transactions," including those with Fastow partnerships. Enron says it will fully cooperate.
Oct. 1959: The Wall Street Journal discloses that general partners of Fastow partnership realized more than $7 million last year in management fees and about $4 million in capital increases on an investment of nearly $3 million in the partnership, set up principally to do business with Enron, according to an internal partnership document.
Oct. 1660: Enron takes $1.01 billion charge related to write-downs of investments. Of this, $35 million is attributed to partnerships until recently run by CFO Andrew Fastow. Enron also discloses it shrank shareholder equity by $1.2 billion, as a result of several transactions including ones undertaken with Mr. Fastow's investment vehicle.
(Return to full coverage61 of the rise and fall of Enron)
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