Enron files for bankruptcy
On December 2, 2001, the Enron Corporation files for Chapter 11 bankruptcy protection in a New York court, sparking one of the largest corporate scandals in U.S. history.
An energy-trading company based in Houston, Texas, Enron was formed in 1985 as the merger of two gas companies, Houston Natural Gas and Internorth. Under chairman and CEO Kenneth Lay, Enron rose as high as number seven on Fortune magazine’s list of the top 500 U.S. companies. In 2000, the company employed 21,000 people and posted revenue of $111 billion. Over the next year, however, Enron’s stock price began a dramatic slide, dropping from $90.75 in August 2000 to $0.26 by closing on November 30, 2001.
As prices fell, Lay sold large amounts of his Enron stock, while simultaneously encouraging Enron employees to buy more shares and assuring them that the company was on the rebound. Employees saw their retirement savings accounts wiped out as Enron’s stock price continued to plummet. After another energy company, Dynegy, canceled a planned $8.4 billion buy-out in late November, Enron filed for bankruptcy. By the end of the year, Enron’s collapse had cost investors billions of dollars, wiped out some 5,600 jobs and liquidated almost $2.1 billion in pension plans.
Over the next several years, the name “Enron” became synonymous with large-scale corporate fraud and corruption, as an investigation by the Securities and Exchange Commission and the U.S. Justice Department revealed that Enron had inflated its earnings by hiding debts and losses in subsidiary partnerships. The government subsequently accused Lay and Jeffrey K. Skilling, who served as Enron’s CEO from February to August 2001, of conspiring to cover up their company’s financial weaknesses from investors. The investigation also brought down accounting giant Arthur Andersen, whose auditors were found guilty of deliberately destroying documents incriminating to Enron.
In July 2004, a Houston court indicted Skilling on 35 counts including fraud, conspiracy and insider trading. Lay was charged with 11 similar crimes. The trial began on January 30, 2006, in Houston. A number of former Enron employees appeared on the stand, including Andrew Fastow, Enron’s ex-CFO, who early on pleaded guilty to two counts of conspiracy and agreed to testify against his former bosses. Over the course of the trial, the defiant Skilling–who unloaded almost $60 million worth of Enron stock shortly after his resignation but refused to admit he knew of the company’s impending collapse–emerged as the figure many identified most personally with the scandal. In May 2006, Skilling was convicted of 19 of 35 counts, while Lay was found guilty on 10 counts of fraud and conspiracy. When Lay died from heart disease just two months later, a Houston judge vacated the counts against him. That October, the 52-year-old Skilling was sentenced to more than 24 years in prison.
US GOVERNMENT
1970
Environmental Protection Agency opens
On December 2, 1970, a new federal agency opens its doors. Created in response to the dawning realization that human activity can have major effects on the planet, the Environmental Protection Agency heralded a new age of government action on behalf of the environment.
ART, LITERATURE, AND FILM HISTORY
1972
The Temptations earn their final #1 hit with “Papa Was A Rolling Stone”
On December 2, 1972, the Temptations earn the last of their four chart-topping hits when “Papa Was A Rollin’ Stone” reaches #1 on the Billboard Hot 100. Over the course of their storied career, the Temptations placed 38 hit records in the pop top 40.
FRANCE
1804
Napoleon crowned emperor
In Notre Dame Cathedral in Paris, Napoleon Bonaparte is crowned Napoleon I, the first Frenchman to hold the title of emperor in a thousand years. Pope Pius VII handed Napoleon the crown that the 35-year-old conqueror of Europe placed on his own head.
ABOLITIONIST MOVEMENT
1859
Abolitionist John Brown is hanged
Militant abolitionist John Brown is executed on charges of treason, murder and insurrection on December 2, 1859. Brown, born in Connecticut in 1800, first became militant during the mid-1850s, when as a leader of the Free State forces in Kansas he fought pro-slavery settlers.
U.S. PRESIDENTS
1823
Monroe Doctrine declared
During his annual address to Congress, President James Monroe proclaims a new U.S. foreign policy initiative that becomes known as the “Monroe Doctrine.” Primarily the work of Secretary of State John Quincy Adams, the Monroe Doctrine forbade European interference in the American.
RED SCARE
1954
Joseph McCarthy condemned by Senate
The U.S. Senate votes 65 to 22 to condemn Senator Joseph R. McCarthy for conduct unbecoming of a senator. The condemnation, which was equivalent to a censure, related to McCarthy’s controversial investigation of suspected communists in the U.S. government.
WORLD WAR II
1942
Physicist Enrico Fermi produces the first nuclear chain reaction
Enrico Fermi, the Italian-born Nobel Prize-winning physicist, directs and controls the first nuclear chain reaction in his laboratory beneath the bleachers of Stagg Field at the University of Chicago, ushering in the nuclear age.
ART, LITERATURE, AND FILM HISTORY
1997
“Good Will Hunting” premieres in theaters
On December 2, 1997, Good Will Hunting, a movie that will earn childhood friends Ben Affleck and Matt Damon a Best Screenplay Oscar and propel them to Hollywood stardom, premieres in Los Angeles. Good Will Hunting, which opened in wide release across America on January 9, 1998.
CRIME
1991
William Kennedy Smith’s rape trial begins
Opening testimony takes place in the highly publicized rape trial of William Kennedy Smith, a nephew of President John F. Kennedy and son of Jean Kennedy Smith, the president’s sister and a former ambassador to Ireland.
COLD WAR
1961
Fidel Castro declares himself a Marxist-Leninist
Following a year of severely strained relations between the United States and Cuba, Cuban leader Fidel Castro openly declares that he is a Marxist-Leninist. The announcement sealed the bitter Cold War animosity between the two nations.
AMERICAN REVOLUTION
1777
Philadelphia nurse overhears British plans to attack Washington’s army
Legend has it that on the night of December 2, 1777, Philadelphia housewife and nurse Lydia Darragh single-handedly saves the lives of General George Washington and his Continental Army when she overhears the British planning a surprise attack on Washington’s army.
WORLD WAR I
1917
Russia reaches armistice with the Central Powers
A day after Bolsheviks seize control of Russian military headquarters at Mogilev, a formal ceasefire is proclaimed throughout the battle zone between Russia and the Central Powers. Immediately after their accession to power in Russia in November 1917.
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