Enron the Nigerian Barge Deal - 2218 Words

April 4, 2006 0 1 Introduction: The Nigerian Barge Deal Enron Corporation was an energy company based in Texas and created when InterNorth acquired Houston Natural Gas Company in 1985. Enrons growth was fast, it was named \Americas Most Innovative Company for six consecutive years and it soon became the seventh largest company in the United States, until its bankruptcy was declared in 2001. Accounting fraud, money laundering and conspiracy are some of the charges which Enron stood accused of in a series of scandals that nally came to a head in the largest bankruptcy in history. One of these scandals was named the Nigerian Barges case ([Fleischer1, 2005]). Enron tried to sell an interest in three power-generating barges in the coast of†¦show more content†¦Merrill Lynchs main interest was to accommodate a very important client, as Enron paid millions in fees to Merrill 2 Lynch ([Glisan, 2003]). Furthermore, it can be considered that there was an agreement between Enron and Merrill Lynch in this contract, since the latter accepted the o er and all the conditions of the former. The second requirement that needs to be fullled by the parties in the contract is the consideration, which species what is exchanged, i.e., as commented in [Cornell, 2005], \the bene t or detriment which a party receives which reasonably and fairly induces them to make the promise/contract. Consideration can involve a wide group of things, everything that has a value and is involved in the contract. Money is one of the main factors. The contract between Enron and Merrill Lynch allowed Enron to perceive seven million dollars from Merrill Lynch, which acquired an interest in the three barges in Nigeria. Those millions of dollars helped Enron to in ate its earnings since that transaction was considered by Enron as a sale, and not as a loan. This constitutes the main problem of the contract, since the prosecutors were essentially charged for not following basic accounting rules. Consideration of the contract also includes the interest that Merrill Lynch purchased, including the 22:5% of prot that Merrill Lynch made. Finally, Andrew FastowsShow MoreRelatedThe Corporate Culture Of Enron1474 Words   |  6 PagesHow did the corporate culture of Enron contribute to its bankruptcy? The Enron Corporation was an energy trading and utilities company that eventually failed due to the discovery that Enron was hiding large debts and losses in financial documents. â€Å"Through its subsidiaries and numerous affiliates, the company provided products and services related to natural gas, electricity, and communications for its wholesale and retail customers† (Ferrell, Fraedrich Ferrell, 2015, p. 486). 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