CORPORATE GOVERNANCE & ETHICS

TASK I ::

We've located a free-to-view online copy of the video documentary on Enron's collapse; how it was designed, executed, and covered up. I think you are going to enjoy this. Subject to the above WARNING, please view the online film as a study of what can go wrong when any sense of ethical authority is deliberately, and by design, breached. Note that ENRON is one of the more thoroughly documented case studies. 

1.  REQUIRED

MUGSHOTS - ENRON-Wall Street Scammers

https://www.youtube.com/watch?v=owdK7HMCmfY 

[FilmRise True Crime, July 28th, 2014; 45 minutes]

2. Optional

THE CROOKED E – Unshredded Truth About ENRON

https://www.youtube.com/watch?v=AiWKPQAWuug

[CBS made-for-tv docudrama, January 2003; 82 minutes]

and article : Enron settles with ex-CEO's wife Linda Lay :

NEW YORK (Reuters) - The widow of former Enron Corp Chief Executive Officer Kenneth Lay has settled long-running litigation brought by an entity that has been seeking money for creditors of the failed energy company.

Linda Lay and Enron Creditors Recovery Corp agreed to split two annuity contracts, the primary assets in dispute, to settle the eight-year-old case, according to papers filed Friday with the U.S. bankruptcy court in Manhattan.

"It resolves all remaining litigation between Enron, Mrs. Lay and Kenneth Lay's estate," Martin Siegel, a partner at Brown Rudnick representing Linda Lay, said in an interview.

Enron sued the Lays over alleged fraudulent transfers that preceded the company's December 2, 2001, bankruptcy: loans that Enron made to Kenneth Lay that he repaid with company stock, and Enron's agreement to buy the annuities from the Lays for $10 million. It is unclear what the annuities are worth now.

In Friday's filing, Enron Creditors Recovery Corp, a successor to Enron, said the settlement is fair and resulted from mediation.

It also said continuing to litigate might not be best because Kenneth Lay's estate is insolvent and Linda Lay has "extremely limited" assets.

Approving the settlement "would allow ECRC to maximize its potential recovery by having a tangible asset in hand, rather than the potential for future recovery contingent on a finding of liability and the solvency of the defendants," it said.

The Lays were once worth several hundred million dollars, mostly tied to Enron stock. That sum evaporated as Enron's accounting fraud became known, resulting in the Houston-based company's bankruptcy. Other family assets have also been sold.

Lawyers for Enron did not immediately return calls seeking comment. The settlement requires court approval. A hearing before U.S. Bankruptcy Judge Arthur Gonzalez in Manhattan is set for July 7.

A Houston federal jury in May 2006 found Kenneth Lay guilty of fraud and conspiracy related to Enron's collapse, but his death two months later led to his conviction being thrown out.

Another former CEO, Jeffrey Skilling, was also convicted and awaits resentencing. Former Enron Chief Financial Officer Andrew Fastow, considered the mastermind behind Enron's fraud, entered prison in September 2006 and is expected to be released from a halfway house on December 17.

The case is The Official Committee of Unsecured Creditors of Enron Corp et al v. Lay et al, U.S. Bankruptcy Court, Southern District of New York, No. 03-ap-02075.

(Reporting by Jonathan Stempel; Additional reporting by Tanya Agrawal in Bangalore; Editing by Lisa Von Ahn)

© Thomson Reuters 2011. All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only.

Thomson Reuters journalists are subject to an Editorial Handbook, which requires fair presentation and disclosure of relevant interests.

after watch videos and article answer the following :

Write short, but complete answers to the following questions:

(1)  What are some of the implications for the companies you have chosen to observe?

(2)  Were the extent of ENRON's executives' actions what you expected to hear?

(3)  What would you have done if you were Kenneth Lay?

(4)  What should be the position of the Federal government on such matters?

(5)  What should be the public's position both now and in the future?

(6)  What should be your organization's position both now and in the future?

(7)  What will be your professional, as well as personal, position both now and in the future?

TASK II:

pick three(3) companies ... i will suggest (Google , Best buy and Coca-cola) For each of the three(3) companies/organizations you will track please do a SHORT S.W.O.T. analysis [Strengths, Weaknesses, Opportunities, Threats and list 4-to-5 strong points in each category].

and please cite the website or any source in the end . and u will find SWOT ANALYSIS attachment blow .

 CGE_2015-Spring_PMBA Assignment #2_150202 (1).docx Page 1 of 5

 CORPORATE GOVERNANCE & ETHICS

TASK I:

BETTER UNDERSTANDING ENRON, ITS GOVERNANCE, & ETHICS

TASK I ASSIGNMENT DUE: VIEW BEFORE FEBRUARY 16TH

We've located a free-to-view online copy of the video documentary on Enron's collapse; how it was designed, executed, and covered up. I think you are going to enjoy this. Subject to the above WARNING, please view the online film as a study of what can go wrong when any sense of ethical authority is deliberately, and by design, breached. Note that ENRON is one of the more thoroughly documented case studies.

As the original documentary, THE SMARTEST GUYS IN THE ROOM, is no longer available (it’s rights were transferred sometime between late December 2014 and early January 2015 to a gaming company that requires a highly suspect and dubious “free” registration), I’ve replaced that film with both (1) a documentary published in 2014 and (2) a 2003 CBS television movie based upon the facts and circumstances of the ENRON failure. Both articulate the steps taken by ENRON's leadership to compromise legal, banking, audit, SEC, reporting, stockholders, stakeholders, employees, institutional investors, and almost all other of stakeholders. And, essentially corrupting almost all that it touched.

1. REQUIRED

MUGSHOTS - ENRON-Wall Street Scammers

https://www.youtube.com/watch?v=owdK7HMCmfY

[FilmRise True Crime, July 28th, 2014; 45 minutes]

2. Optional

THE CROOKED E – Unshredded Truth About ENRON

https://www.youtube.com/watch?v=AiWKPQAWuug

[CBS made-for-tv docudrama, January 2003; 82 minutes]

Write short, but complete answers to the following questions:

(1) What are some of the implications for the companies you have chosen to observe?

(2) Were the extent of ENRON's executives' actions what you expected to hear?

(3) What would you have done if you were Kenneth Lay?

(4) What should be the position of the Federal government on such matters?

(5) What should be the public's position both now and in the future?

(6) What should be your organization's position both now and in the future?CGE_2015-Spring_PMBA Assignment #2_150202 (1).docx Page 2 of 5

(7) What will be your professional, as well as personal, position both now and in the future?

The deliberateness of intent of systematic accounting fraud almost rivals Bernard Ebbers' outright criminal kiting of personal corporate loans to float his personal wealth through the manipulation of WorldCom's multi-tiered acquisition deals.

From a perspective of both Governance and exposures to potential conflict of interests, please note that between WorldCom and ENRON collapses--coupled with the roles of both Investment bankers, external general counsels, and Arthur Andersen--were sufficient to bring about the 2002 Sarbanes-Oxley law as well as force the retirement of Texas Senator Phil Graham (Chairman, the Senate Banking, Housing, & Urban Affairs Committee that prevented Federal agency investigations into derivative practices) whose wife, Wendy Lee Graham, was an influential ENRON board member after leaving the Government agency that exempted ENRON from derivatives oversight and supervision.

Note carefully that before stepping down as head of the Commodity Futures Trading Commission and accepting a position on ENRON's Board of Directors (and appointed to its oversight Audit Committee) Mrs. Graham approved ENRON's extensively congressionally lobbied exemption from regulations governing trading of energy derivatives. Since Sarbanes-Oxley and Dodd-Frank, the potential appearance of conflict of interest would have been sufficient to block such board appointments to publicly traded companies.

[Several class members asked what happened to the Lay Family fortune after Ken Lay’s sudden death. See attached June 20, 2011 article below.]

Enron settles with ex-CEO's wife Linda Lay

Mon, Jun 20 2011 CGE_2015-Spring_PMBA Assignment #2_150202 (1).docx Page 3 of 5

By Jonathan Stempel

NEW YORK (Reuters) - The widow of former Enron Corp Chief Executive Officer Kenneth Lay has settled long-running litigation brought by an entity that has been seeking money for creditors of the failed energy company.

Linda Lay and Enron Creditors Recovery Corp agreed to split two annuity contracts, the primary assets in dispute, to settle the eight-year-old case, according to papers filed Friday with the U.S. bankruptcy court in Manhattan.

"It resolves all remaining litigation between Enron, Mrs. Lay and Kenneth Lay's estate," Martin Siegel, a partner at Brown Rudnick representing Linda Lay, said in an interview.

Enron sued the Lays over alleged fraudulent transfers that preceded the company's December 2, 2001, bankruptcy: loans that Enron made to Kenneth Lay that he repaid with company stock, and Enron's agreement to buy the annuities from the Lays for $10 million. It is unclear what the annuities are worth now.

In Friday's filing, Enron Creditors Recovery Corp, a successor to Enron, said the settlement is fair and resulted from mediation.

It also said continuing to litigate might not be best because Kenneth Lay's estate is insolvent and Linda Lay has "extremely limited" assets.

Approving the settlement "would allow ECRC to maximize its potential recovery by having a tangible asset in hand, rather than the potential for future recovery contingent on a finding of liability and the solvency of the defendants," it said.

The Lays were once worth several hundred million dollars, mostly tied to Enron stock. That sum evaporated as Enron's accounting fraud became known, resulting in the Houston-based company's bankruptcy. Other family assets have also been sold.

Lawyers for Enron did not immediately return calls seeking comment. The settlement requires court approval. A hearing before U.S. Bankruptcy Judge Arthur Gonzalez in Manhattan is set for July 7.

A Houston federal jury in May 2006 found Kenneth Lay guilty of fraud and conspiracy related to Enron's collapse, but his death two months later led to his conviction being thrown out.

Another former CEO, Jeffrey Skilling, was also convicted and awaits resentencing. Former Enron Chief Financial Officer Andrew Fastow, considered the mastermind behind Enron's fraud, entered prison in September 2006 and is expected to be released from a halfway house on December 17.

The case is The Official Committee of Unsecured Creditors of Enron Corp et al v. Lay et al, U.S. Bankruptcy Court, Southern District of New York, No. 03-ap-02075.

(Reporting by Jonathan Stempel; Additional reporting by Tanya Agrawal in Bangalore; Editing by Lisa Von Ahn)

© Thomson Reuters 2011. All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. CGE_2015-Spring_PMBA Assignment #2_150202 (1).docx Page 4 of 5

Thomson Reuters journalists are subject to an Editorial Handbook, which requires fair presentation and disclosure of relevant interests.

TASK II:

A S.W.O.T. ANALYSIS HELPS ORGANIZE YOUR THINKING & WORK!

I. FIRST: USE RELEVANT ELEMENTS FROM YOUR PERSONAL LIFE EXPERIENCES.

II. SECOND: PREPARE A S.W.O.T. ANALYSIS. IF YOU HAVE ANY CONFUSION THERE IS AN EXCELLENT DOWNLOADABLE WORD.DOC TEMPLATE FROM BUSINESSBALLS.COM: