Martin Bienenstock on how he counseled Enron through Chapter 11 Bankruptcy by salvaging the non-fraudulent businesses within the company.
New York business solutions, governance, restructuring & bankruptcy attorney Martin Bienenstock of Proskauer Rose discusses Enron.
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Enron went into Chapter 11 in 2002 or the end of 2001 and I think for most people it’s lumped with all the other mega cases at that time that arose due to fraud. But in Enron, there was actually a many viable businesses that are not based on fraud. Some of the accounting was clearly wrong and maybe fraudulent too, but they had viable businesses. And the need once it was in Chapter 11 was to maximize the value of the businesses for the benefit of creditors rather than have everything disintegrate because people wanted to wash their hands of it and say this is a fraud let’s just liquidate it and go on. So what we did was we advised the board of directors that they had to be totally transparent. They had to show the creditors everything that was happening.
They, for the most part, most of the directors resigned and we took on new directors many of which were nominated by the creditors committee. We had a chief restructuring officer who became the interim CEO, Steve Cooper, and we operated like an open book and managed to save virtually every one of Enron’s businesses and probably more than 90 percent of the jobs. But it was basically by having a transparent corporate governance system so that creditors and even outside regulators and government officials started to have faith in how the company was being governed once it filed its Chapter 11 case.