In Houston Tuesday, the 41-story building that once housed the Enron corporation went on the auction block exactly two years after the company filed for bankruptcy. The effects of that collapse are still being felt all across corporate America.
As the Enron building goes up for sale, the remnants of Enron Corporation continue to operate under court-ordered bankruptcy procedures. At its peak, the energy-trading company employed 7,000 people here in Houston and about twice that many in other cities around the world. Today, there are 1,200 employees left here and a little over 10,000 in other places.
On Monday a bankruptcy judge ruled that Enron creditors can proceed with a Texas state civil suit in Montgomery county, north of Houston. The suits target two Houston law firms, the Arthur Andersen accounting firm and two dozen former Enron executives.
John Olson, who once analyzed Enron for the Merrill Lynch brokerage firm and lost his job for questioning the company's business practices, says creditors may fare better in the state suit than they will in the federal cases.
"They would presumably see an earlier return because the civil suits under the federal arrangements right now would not go to trial until October 2005 and the state courts, if they go to jury trials, state courts are generally a lot more rewarding than federal courts," he explained.
Mr. Olson says this civil suit, combined with the federal suits and the federal criminal charges against several executives are having a positive effect as a deterrent against other corporate officers who might otherwise enter into fraudulent deals. He also sees benefits in stricter controls on corporate accounting and investment practices that resulted from the Enron scandal.
"I am relatively optimistic that we will see a lot better sets of terms and conditions to investing in the future because of all these changes," he went on to say. "There are more frauds out there, rest assured, but uncovering them will be a lot easier than it would have been two years ago when Enron filed bankruptcy."
Mr. Olson describes the current situation as the "end of the beginning" of the effort to clean up corporate accounting practices. He says, however, that he is optimistic that authorities are now scrutinizing corporations more carefully to prevent future Enron-type scandals.