Book Description
An easy answer guide to the difficult questions surrounding Enron
What Went Wrong at Enron explains the critical steps, transactions, and events that led to the demise of a company that was once considered one of the most innovative corporations in the United States. Energy risk management expert Peter Fusaro gets inside Enron and provides a coherent account of the who, why, where, and when of this corporate debacle, without sacrificing the complexity of what has happened. Enron has been front-page news for months, but confusion still remains about what actually happened. What Went Wrong at Enron is written for readers who find themselves wondering what exactly is an energy trading company, what was the sequence of events that caused the largest corporate bankruptcy in U.S. history, and what does this all mean for me.
Customer Reviews:
This is the thinnest book on Enron that I read; it covers the whole affair very superficially........2006-05-20
I don't get the impression from reading the book that the authors have even tried to analyzed the financial holdings that was set up. It is the thinnest book on Enron that I read, for very good reason.
When Too Much is Barely Enough.......2005-06-10
Fusaro, P. and Miller, R. M., 2003. What went wrong at Enron, Everyone's guide to the largest bankruptcy in U.S. history. John Wiley and Sons, paperback, 240 p.
The moral and cultural lessons of Enron range from the need for ethical behaviour, grounding in truthfulness, honesty, transparency and a need for complete disclosure in accounting and corporate structure. This is the ultimate source of insight into how it all happened. Other sources also point to the underlying dangers represented by a betrayal of trust within the capitalism market system.
The Enron style of approach to flourish in newly deregulated energy and utility markets that have been engineered by governments since the mid 1980s. The levels of executive culpability and it shows the decay and or frailty of underlying value systems which should stand against such events. The events and actions that led to Enron's demise have far more and significant implications to the fate and quality of our own society.
But is Enron a systemic problem or is the ultimate problem the nature of market capitalism itself. If the latter then to avoid more Enron's it is necessary to have moral and ethical tethers to clearly defined absolute terms such as right and wrong (good and evil) in a corporate business environment, otherwise concepts on which an economic system depends, such as trust between all participants, will ultimately breakdown.
Internally, the dynamics of the Enron enterprise set out in this book show a salutary lesson of what should not be present in an apparently healthy and profitable corporate enterprise: failure of 'knowledge conditions', senior management being isolated from those at operational levels (?); individuals pursuing sub-goals that are contrary to overall corporate goals; restrictions on the flows of bad news as opposed to any positive 'spin'.
The underlying causes of an Enron outcome are in fact within the nature of corporations themselves. Their hierarchical structure, limited span of control, self-interest, limited discourse and intimidatory corporate culture all point to a flaw in the nature of many public-listed corporations. Some suggest that the Enron case is one which warrants a revaluation of the shareholder centric model of corporations; management actions should not longer be orientated at maximising the current share price.
Some see the lessons of Enron as being a company that, when in trouble, was unwilling to admit its own shortcomings and thus became driven to cover-up a few bad decisions by making even worse ones. An early admission and some critical changes in operations could have saved the trading side of the business. Instead profit growth at all costs an unwillingness to admit that poor decisions had been made, led to even more exaggeration and fraudulent reporting.
The key problem with Enron was that it had all the surfical signs of a good corporate citizen in place with corporate social responsibility, business ethics tools and status symbols all in place. The greatest danger is that the Enron situation is not atypical of many aspects of many corporate organisations: those who closed their eyes to wrong doings (in Enron) were rewarded; others who sought to give warnings were punished; the win-at-all-costs mentality. The Enron lesson is that business is in the long term only going to survive by virtue of developing and following ethical behaviour. No one single error occurred just the compounding of many errors, all of which were preventable. It was based on a success at all cost culture where the ends always justified the means.
Enron is not explicable as just ethical and moral failure without examining why these failures occurred. Enron was a corporate product of both willingness to bend the rules and the opportunity to bend them. Others suggest that there are limited lessons to be learnt from the Enron story: that is to say Enron is bankrupt because of speculation and legal but unsound accounting and financing schemes. This view suggests that this proves that the free-market works; speculators and those at the margin of the market must suffer as and when the market turns. As such Enron investors were punished by the stock market for their poor judgment. The energy markets adjusted to Enron's collapse with few problems. As for the stock market crash, well, booms and busts are a natural part of a healthy capitalist economy.
A must have book for anyone who wants to know the inside story.
Other academic reading:
. Benston, G. J., and Hartgraves, A. L., 2002. Enron: what happened and what can we learn from it. Journal of Accounting and Public Policy, 21, 105-127.
Carson, T. L., 2003. Self-interest and business ethics: some lessons of the recent corporate scandals. Journal of Business Ethics, 43, 389-394.
Chatergee, S., 2003. Enron's incremental descent into bankruptcy: a strategic and organisational analysis. Long Range Planning 36, 133-149.
Cohan, J. A., 2002. "I didn't know" and "I was only doing my job": Has corporate governance careened out of control? A case study of Enron's information myopia. Journal of Business Ethics, 40, 275-299.
Currall, S., and Epstein, M. J., 2003. The Fragility of Organizational Trust: Lessons from the rise and fall of Enron. Organizational Dynamics, 32 (2), 193-206.
Desai, A. B. and Rittenberg, T., 1997. Global ethics: an integrative framework for MNEs. Journal of Business Ethics, 16, 791-800.
Sims, R. R. and Brinkman, J., 2003. Enron ethics (or: culture matters more than codes). Journal of Business Ethics 45, 243-245.
Spector, B., 2003. HRM at Enron: the unindited co-conspirator. Organizational Dynamics, 32 (2), 207-22.
Dr I Lavering
Adjunct Professor
MBT Program UNSW
Thin.......2003-07-30
Let's start with the positives:
- the book is easy to read and reasonably well written;
- the basic facts of the story are covered;
- the book starts the story way back before the problems emerged so that you get a feel for what the business was up to.
But
- it is very short book for such a complex subject
- the "unravelling" - the investigations into "what went wrong" are (ironically) not well covered
- there is almost no coverage of the Andersen issues
So save your dollar, pound, euro or yen - don't waste it on this book.
A Shakespearean tragedy.......2003-07-09
What really went wrong at Enron?
A question that cannot be answered easily due to its nature of complexity. Thousands and hundreds investors, including Enron¡¦s employees who vested their retirement benefits in the s401k plan solely with Enron shares¡K..The horrible downfall alarmed the investment community, hurt the professional society (accountant, lawyer, underwriter etc.) and credibility of the monitoring commission¡K. The U.S. government reacted with the new legislation (Sabanes-Oxley Act) as an ¡§attempt¡¨ to tackle the problem, trying to put the company¡¦s management back on track to shoulder its fiduciary duty to the company¡¦s shareholder. But, does it work? The extent to which the various parties¡¦ responsibilities is still clouded.
If we do not really analyze the root causes which led to the Enron¡¦s downfall, we never know the answer. This book, written with the targeted general audience, is published at the right time to give the public a good chance to find the ashes in the smoke. At least for the moment.
According to this book, the tragedy was played by an arrogant CEO, greedy senior executive, loyal whistleblower, with the backdrop of a wrongly conceived free economy principle. The book is well written and gives insightful analyses based on the available evidence and traces. Some of the factors leading to the tragedy noted by the authors are:
*X The use of SPE (Special Purpose Vehicles) in accounting to keep off the accounting profits as well as to hide the potential liabilities
*X The constantly fearing environment built by the Corporate Culture emphasizing on a sense of urgency
*X Over-extension of operations in the deregulated energy and telecommunication market
*X Mark-to-market accounting principles
*X Less than full company¡¦s disclosure tendency
*X Valuation problem of customized contracts
* Making commitment as a counter-party to every trade in arbitrage markets
*X Trading from natural gas to electricity to bandwidth to 1800 different products in the Enron online
*X Conflicting company¡¦s strategy: asset-lite vs. debt heavy financed investments
*X Manipulated earning estimated to meet expectations
*X Deals financed by high Enron¡¦s stock price
*X Excessive investment in optic fibre networks
The list could go on and on. In fact, Enron went to the extent that deals were made just for the sake of making them. The more you read about the book, the more you feel it is a Shakespearean tragedy ¡V things are certain to get worse with all of these interrelated factors playing on stage. The general audience, those who believed that the play had a good ending, bought the tickets but found that the play was ultimately turn out to be a tragic one. They suffered. However, the director said: ¡§You bought the tickets because you believed in the play had a good ending. I didn¡¦t say that it would end in that way.¡¨ Refund? No.
The investigation into Enron¡¦s alleged sham trading and potential fraud scheme is still in progress as of this writing¡K..I highly recommend the book to the general readers, although it is better if you are financially literate. It is a thought-provoking and interesting read, especially to the CPAs.
Lacks specifics, too many pointless analogies........2003-05-22
Enron's greed and financial scandals, along with the rise and fall, are interesting in itself. This book, though it does explain the fall and is easily readable, isn't intriguing enough to capture the reader's attention. In fact, more than half is a description of how Enron came to be and what there business model is. A chunk of the book is just photocopied evidence pasted in the appendix. Only a minute section describes the scandal and accounting frauds.
The author loves anologies. He devotes pages to baseball card trading, and then sort of compares it to Enron's business. While these analogies help with understanding the business model, it's often over-simplified with a glaring lack of details. What I found was a lack of hard numbers and statistics which meant I couldn't put the failings into perspective. Also, the first half of the book where he details Enron, he seems to be praising their business, then hand wavingly, he points to a few corrupted examples. It almost appears that the author thinks Enron would still be a powerhouse if it wasn't for a few specific incidents.
As a book, it gets the job done. It shows the errors of Enron in a way that any non financial person could understand. It does tend to oversimplify, and it's glaring lack of numbers and details hurt it in the end.
Amazon.com
Something strange happened to the Enron Corporation in the early 1990s: It went from a company that traded in tangible goods to one that dealt in pure abstractions, with shoddy accounting practices, astonishing compensation packages, and smoke and mirrors to obfuscate this new reality.
Company auditors, Sherron Watkins among them, warned top Enron execs from CEO Kenneth Lay on down that the company's increasing reliance on cooked books and phony reports "will implode in a wave of accounting scandals." As anyone who played the stock market or watched Enron suits do the perp walk on the evening news a couple of years ago will remember, that's exactly what happened. Texas Monthly editor Swarz and Watkins team up to offer this account, rich in anecdote and numbers alike, of what went wrong and who made it so. Though even-handed throughout, they serve up plenty of righteous scorn for the corporate leaders who enriched themselves as the company disintegrated, and for the name-brand politicians who abetted them.
Though Osama bin Laden's pawns barely dented the U.S. economy, observes Alex Berenson in The Number, Lay and his lieutenants brought it to its knees. Swartz's and Watkins's eye-opening account will rekindle new indignation over unpunished crimes and well-rewarded hubris, and it ought to be required reading in business schools henceforth. --Gregory McNamee
Book Description
“They’re still trying to hide the weenie,” thought Sherron Watkins as she read a newspaper clipping about Enron two weeks before Christmas, 2001. . . It quoted [CFO] Jeff McMahon addressing the company’s creditors and cautioning them against a rash judgment. “Don’t assume that there is a smoking gun.”
Sherron knew Enron well enough to know that the company was in extreme spin mode…
Power Failure is the electrifying behind-the-scenes story of the collapse of Enron, the high-flying gas and energy company touted as the poster child of the New Economy that, in its hubris, had aspired to be “The World’s Leading Company,” and had briefly been the seventh largest corporation in America.
Written by prizewinning journalist Mimi Swartz, and substantially based on the never-before-published revelations of former Enron vice-president Sherron Watkins, as well as hundreds of other interviews, Power Failure shows the human face beyond the greed, arrogance, and raw ambition that fueled the company’s meteoric rise in the late 1990s. At the dawn of the new century, Ken Lay’s and Jeff Skilling's faces graced the covers of business magazines, and Enron’s money oiled the political machinery behind George W. Bush’s election campaign. But as Wall Street analysts sang Enron’s praises, and its stock spiraled dizzyingly into the stratosphere, the company’s leaders were madly scrambling to manufacture illusory profits, hide its ballooning debt, and bully Wall Street into buying its fictional accounting and off-balance-sheet investment vehicles. The story of Enron’s fall is a morality tale writ large, performed on a stage with an unforgettable array of props and side plots, from parking lots overflowing with Boxsters and BMWs to hot-house office affairs and executive tantrums.
Among the cast of characters Mimi Swartz and Sherron Watkins observe with shrewd Texas eyes and an insider’s perspective are: CEO Ken Lay, Enron’s “outside face,” who was more interested in playing diplomat and paving the road to a political career than in managing Enron’s high-testosterone, anything-goes culture; Jeff Skilling, the mastermind behind Enron’s mercenary trading culture, who transformed himself from a nerdy executive into the personification of millennial cool; Rebecca Mark, the savvy and seductive head of Enron’s international division, who was Skilling’s sole rival to take over the company; and Andy Fastow, whose childish pranks early in his career gave way to something far more destructive. Desperate to be a player in Enron’s deal-making, trader-oriented culture, Fastow transformed Enron’s finance department into a “profit center,” creating a honeycomb of financial entities to bolster Enron’s “profits,” while diverting tens of millions of dollars into his own pockets
An unprecedented chronicle of Enron’s shocking collapse, Power Failure should take its place alongside the classics of previous decades – Barbarians at the Gate and Liar’s Poker – as one of the cautionary tales of our times.
From the Hardcover edition.
Customer Reviews:
Enron......Sad in a way.......2007-03-29
This book is a great account of what happened. When Enron collapsed, I was in my young teens so I really didn't pay much attention to it. However now seeing I'm in college as a business major I think it is an essential book that should be read by all business majors. It teaches what can go wrong when the wrong moves are put in place. Enron I think did everything possible to cripple itself with out seeing it until it was too late. The book takes off as rocket that a company is about to make it big. It takes from the early stages a company to a giant that falls to shambles.
The company employees the wrong people to the wrong positions. Andy Fastow I feel is the biggest crook outside of Skilling. Ken lay I feel was a good man who truly wanted to see the company prevail but with his blindness did not see the fore coming danger. Fastow reported to Skilling and Skilling just signed off on deals with out looking at them. If he would have seen what Fastow was doing with money from the company, chances are these deals would have never made it. However, with the wavering of the ethic code was just wrong. No company should ever break their code of ethics. If they do get out ASAP. Chances are it will lead to bigger breaks and will cause bigger problems and respect will go down the tubes.
This book is worth the cost and it will teach you what Enron did wrong. They should have just stayed in the Nat gas business and slowly dabble in other businesses instead of jumping into businesses without expertise. Go out and buy the book you should be pleased the way it is put together.
A Stockbrokers perspective.......2007-02-26
This book offered an unseen perspective into details about ENRON's dealings and people which should illuminate both old and new views about corporate governance, accounting policies, regulatory climate and unseen involvement by parties which contributed to the collaspe of ENRON.
Exceptional Story of the Enron Tragedy.......2006-11-10
With the recent sentencing of Jeffery Skilling, Mimi Swartz's work takes a complicated story of deciet and betrayal and explains the details in a concise and succint manner. A must read for all business leaders. A great read.
The most important reason for this book is to make the layman aware of just what a travesty the Enron scandal was............2006-10-18
The greatest reason to read this book is to get an appreciation for the scale of the collapse that was Enron. Also, you will get a description of what life was like at Enron on a personal level from an insider's view, as well as their view on what it had to do with the Company's downfall. Yes - this is one person's account, but there's enough factual information to back them up on the important points.
There are many books that are more technically oriented and probably less biased. Unfortunately, for this layman, they don't make very good bedtime reading.
Chaser for "The Smartest Guys in the Room" - kind of Enron lite.......2006-08-09
I recommend reading these 2 books together because TSGITR gets really dense in places, making for draining reading, but since the story is too incredible to put down, Power Failure takes it to a lighter level. I do think Power Failure hones in more on Andy Fastow, as co-writer Sherron Watkins worked directly with him, and the photograph of his little art project is downright chilling (you'll see what I'm referring to). Power Failure still has some great meat to chew on however; the proximity that Sherron Watkins had to the main players, particularly Lay and Fastow, lends itself to the amazing characterizations of these guys on paper. The two books follow a similar chronology and highlights, so it is interesting to compare the slight variations of the same episodes. Even though Sherron Watkins makes the most of her edge, being a primary player in the saga, the tip of my hat goes to TSGITR's writers for their downright nasty investigative reporting.
Book Description
"A wonderful character study of someone whose cognitive dissonance ('I am brilliant, therefore I must be doing everything correctly') led directly to his downfall. Students would do well to read this book before venturing forth into a large firm, a small firm, or any pressure-cooker environment."
-Nancy Rapoport, University of Houston Law Center
"Eat What You Kill is gripping and well written. . . . It weaves in academic commentary and understanding of professional ethics issues in a way that makes it accessible to everyone."
-Frank Partnoy, University of San Diego Law School
He had it all, and then he lost it. But why did he do it, risking everything-wealth, success, livelihood, freedom, and the security of family?
Eat What You Kill is the story of John Gellene, a rising star and bankruptcy partner at one of Wall Street's most venerable law firms. But when Gellene became entangled in a web of conflicting corporate and legal interests involving one of his clients, he was eventually charged with making false statements, indicted, found guilty of a federal crime, and sentenced to prison.
Milton C. Regan Jr. uses Gellene's case to prove that such conflicting interests are now disturbingly commonplace in the world of American corporate finance. Combining a journalist's eye with sharp psychological insight, Regan spins Gellene's story into a gripping drama of fundamental tensions in modern-day corporate practice and describes in perfect miniature the inexorable confluence of the interests of American corporations and their legal counselors.
This confluence may seem natural enough, but because these law firms serve many masters-corporations, venture capitalists, shareholder groups-it has paradoxically led to deep, pervasive conflicts of interest. Eat What You Kill gives us the story of a man trapped in this labyrinth, and reveals the individual and systemic factors that contributed to Gellene's demise.
Customer Reviews:
Well Told Story About An Intriguing Subject But Analysis Could Be Better.......2006-07-17
Eat What You Kill: The Fall of a Wall Street Lawyer is the story of John Gellene, the only attorney to ever go to jail for making an incomplete disclosure of "connections" to creditors and parties in a bankruptcy case. While it is clear that Gellene committed an ethical lapse, the fact that he was prosecuted, convicted and served time is truly surprising. Others have failed to disclose much more and have suffered much lighter consequences. As a result, the question of why this particular case resulted in a prison sentence rather than a slap on the wrist is really interesting, particularly to lawyers.
This is a book about lawyers and the law, so that a little background on the law is helpful Representing large companies in bankruptcy is big business. The fees can run into the millions of dollars. In order to secure one of these potentially lucrative appointments, the lawyer must seek court approval of his employment and demonstrate that he is "disinterested." To show that he is "disinterested," the lawyer must submit a sworn statement disclosing his "connections" to the debtor and its creditors. Since the statement is submitted under penalty of perjury, a false statement is subject to criminal prosecution.
In the Gellene case, the large New York law firm of Milbank, Tweed was hired to represent Bucyrus-Erie Corporation in its bankruptcy proceeding. The bankruptcy was very contentious because the largest unsecured creditor, Jackson National Life, had accused the company's investment banker, Goldman Sachs, with manipulating the company's financial affairs to its own benefit. Things got worse when a Goldman Sachs partner, Mikael Salovaara, started his own firm, South Street Fund, and that firm did a deal with Bucyrus-Erie which put them ahead of all the other creditors.
All this happened before bankruptcy lawyer John Gellene entered the picture. However, it created an adversarial situation between the company and between different groups of its creditors. The debtor's attorney would be caught in the middle of this conflict and would have to navigate it in order to successfully reorganize the company. John Gellene began representing Bucyrus-Erie a year before its bankruptcy at a time when his law firm was not representing either Salovaara or South Street. However, shortly before the case was filed, Milbank, Tweed began representing South Street in another bankruptcy and also represented Salovaara in a dispute with his partner. Both of these were "connections" with creditors. However, Gellene failed to disclose these relationships in either of two affidavits filed with the court.
Gellene successfully guided Bucyrus-Erie through its reorganization and his firm was paid nearly $2 million in fees for doing so. Unfortunately, his successful plan put the company's old adversary, Jackson National Life, in control of the company. Years later, Jackson found out about the failure to disclose and sued Milbank, Tweed to return its fees and for malpractice. This proved to be very costly for Milbank, Tweed but it was worse for John Gellene. The publicity spawned by the fee litigation prompted the U.S. Attorney to file criminal charges against Gellene. A deal to plead to a misdemeanor fell through and the case went to trial. The prosecution sought to portray the failure to disclose as black and white, the while the defense attempted to put the statement in context. The jury sided with the U.S. Attorney and Gellene was convicted and sentenced to 15 months in prison. Gellene went from being a highly respected bankruptcy attorney to a convicted felon in a relatively short period of time.
Eat What You Kill does a good job of telling the story and does an adequate job of explaining why this lawyer did what he did, but really fails to answer the big question of why John Gellene was prosecuted. The book does its best job at opening a window onto the pressures faced by a big firm lawyer struggling to survive but cutting corners to do so.
Part 1 of the book does a slow but methodical job of setting the stage. In particular, it describes the world of the large New York law firm where security is an illusion. Gone are the days where clients maintained loyalty to a single firm and firms maintained loyalty to their partners. This world was replaced by a much more fluid one where clients award their business to the best suitor and partners compete against each other in a continuous tournament to see who can bring in the most clients, or failing that, who can bill the most hours. In such a world, it is tempting to cut corners if doing so means being able to attract more business and bill more hours. Additionally, it creates an atmosphere where the "service partners," the ones who perform and supervise the work, must maintain the good will of the "rain makers" who bring in the clients.
Parts 2 and 3 of Eat What You Kill tell the guts of the story in a fast-paced, easy to read manner. It is exciting to watch (at least from a bankruptcy lawyer's vantage) as John Gellene tries strategy after strategy to bring the reorganization to a successful conclusion before the company implodes under the weight of the litigation. Then, just as Gellene has achieved success, everything comes crashing down on him with the weight of a Shakespearean tragedy.
Part 4 and the epilogue try to make sense of what happened. This part of the story could have benefited from a thorough job of editing and re-writing. Pieces of the story which were apparent from the original telling are replayed over and over again in over 70 pages of mind-numbing discussion without achieving a coherent explanation. The epilogue strays into proposals for reforming legal ethics while paying scant attention to the story.
It is possible for the reader to put together the "why" of John Gellene's actions, but it requires some patience. In short, Gellene was placed in an atmosphere where he had to succeed to survive. Disclosing the connections to Salovaara and South Street would have risked losing a lucrative piece of work that he had already been working on for a year. It would have also risked incurring the displeasure of his rain maker who controlled the relationships with Bucyrus-Erie, South Street and Salovaara. The disclosures were one piece of paper of thousands filed in the case. There must have been overwhelming pressure to give them scant attention and move on to more substantive issues. If Gellene did weigh the risks in any detail, he probably dismissed them, since disclosure violations frequently resulted in mild consequences. Thus, it is likely that John Gellene felt sucker-punched when he was indicted, tried and convicted.
Unfortunately, the book gives little emphasis to the "why" of his prosecution. White color prosecutions are rare and prosecutions for failure to disclose conflicts in a bankruptcy case are rarer still. In this case, the Asst. U.S. Trustee (an official charged with overseeing bankruptcy proceedings) had previously been the U.S. Attorney. Perhaps he approached the case with a prosecutor's mindset rather than from a bankruptcy point of view and thus was able to lobby for a prosecution. This was a case where a big New York law firm collected millions of dollars in fees in a case filed in Wisconsin. Perhaps jealousy and mistrust of outsiders played a role. Unfortunately, these themes are not discussed in any depth.
This is an interesting book about an interesting topic, but a revised edition could be better.
Spellbinding and hugely educational.......2005-08-11
Hats off to Professor Regan for his prodigious research and painstaking, vivid recreation of the saga of a prominent lawyer's startling rise and fall --an all-the-more remarkable achievement given Gellene's refusal to cooperate in this project. This is an amazing look-behind-the-curtain as to: how large law partnerships reward and penalize their producers and non-producers; how complicated bankruptcy negotiations unfold; how investment bankers and vulture investors exploit weakened corporations; how a brilliant professional succumbed under pressure to career-ending ethical blunders; and much more. An extremely valuable reading experience for practioners and students of law and business that deserves to be a best-seller.
Important book about ethics.......2005-08-09
Great book showing what can go wrong when law firms let top lawyers get away with violating common practices.
a patient reader reaps far more than an ethics case study.......2005-05-05
Read for: lessons in bankruptcy law and practice, junk bonds, vulture investment, corporate law generally, white collar crime and trial tactics, and a nuanced ethical exploration
Avoid if: seeking simple answers, easily bored by thorough and balanced legal arguments
"Eat What You Kill" explores in excruciating detail the rise and fall of John Gellene, bankruptcy attorney extraordinaire, who failed to disclose a conflict of interest which landed him in prison.
Yet Milton Regan's book offers more than an ethics case study. A blow-by-blow survey of corporate restructuring, bankruptcy litigation tactics, and white collar criminal prosecution, Regan's book overwhelms with useful instruction. Though focused upon Gellene's life at law, Regan uses it as a prism to explore the environment of many others swimming in the same waters.
Lay readers may find the professorial tone both vice and virtue, as the riches grow tiresome to anyone uninterested in following the pros, cons, counter-pros, and counter-cons of various litigation tactics and arguments. Within this web of contextual detail, the ethical story threads diverse legal doctrines.
Offering no simple denunciations or defenses, Regan sees Gellene as merely a lawyer who tends to lie to avoid the consequences of his own negligence. Flawed, perhaps, but hardly a gross flaw.
Refraining from potshots or praise permits Regan to hold Gellene accountable while looking more deeply into the practice of corporate law itself. Regan's conclusions seem to be that lawyers, preoccupied with the business of law, lose sight of its spirit.
terrific, gripping, insightful.......2004-12-23
A better read, simply as a page-turner, than many novels.
Gellene, the protagonist/anti-hero of this book, graduated Phi Beta Kappa and summa cum laude from Georgetown with degrees in philosophy and economics. He graduated cum laude from Harvard Law School, then clerked for Justice Morris Pashman of the New Jersey Supreme Court. Pretty impressive resume, eh? He had the "world at his feet," yet before much more time had passed he was in a prison cell.
This book should act as a warning on several levels. On one of them, it warns a certain type of investor about the nature of the chapter 11 process (in the course of which Gellene made the false statements that led to his downfall). Vulture investing in the instruments of distressed companies going through this process isn't an explicit theme of the book, one it ends up here nonetheless. There are traps for vultures, too.
Average customer rating:
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Bankruptcy & Insolvency Taxation: 2006 Supplement
ASIN: 0471228087 |
Book Description
The thousands of mergers, acquisitions, and start-ups that have characterized the past ten years of business have created an increasing number of corporations in financial trouble: specifically, a shortage of venture capital or quick cash. Consequently, bankruptcy protection is now viewed as a strategic move to protect corporations from their creditors and allow them to reorganize. Bankruptcy and Insolvency Taxation, Third Edition provides the answers to the questions financial managers will have on the tax aspects of the "bankruptcy strategy."
Book Description
No company should proceed toward a possible bankruptcy claim without a thorough understanding of the implications of all the available options. Corporate Bankruptcy provides CEOs, CFOs, controllers, and treasurers, as well as financial advisors and other professionals involved with bankruptcy filing, the tools they need to succeed.
Order your copy today!
Customer Reviews:
Handbook for Managers, not investors.......2005-10-22
Although helpful and well written, the book appears more appropriate for executives or managers of operating companies that may be faced with bankruptcy prospects. A good overview of how the process unfolds, players, objectives, legal issues, and procedures is provided. Managers at a financially distressed operation typically carry a different toolbox of experience and skills, and therefore, this book would be well worth the introduction to the topic.
However, for investors this book is somewhat superficial and lacks the roll-up-your-sleeves education neccessary for investing. In most cases, senior management is sacked because creditors understandably have little confidence in those who may have mismanaged or were responsible for the business's failure in the first place. Thus, the audience that I presumed above may not be appropriate nor the majority of individuals who surface after a Plan.
For investors or external parties, I urge you to consider:
"Distressed Debt Analysis: Strategies for Speculative Investors" by Stephen G. Moyer. It is more expensive, but its a much better book on this topic. Moyer is a stronger writer and seems to be more experienced in the matter than G. Newton. Both books do not include the 2005 Bankruptcy Code reforms, so you may wish to brush up on that separately.
Very practical reference, "thin" on theory and case studies.......2004-01-24
Very useful and convenient reference guide for restructuring bankers / distressed debt investors. Probably too generic for experienced bankruptcy attorneys. The text and examples are efficiently presented and the author does a superb job of distilling the bankruptcy code into an easy-to-read format. The chapter on valuation is nothing more than the common stuff you read in any corporate finance book. A case study and a more extensive discussion on bankruptcy term sheets and negotiation tactics would have made this book more praiseworthy.
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Bankruptcy & Insolvency Taxation: 2006 Supplement
Grant W. Newton , and
Robert Liquerman
Manufacturer: Wiley
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Binding: Paperback
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Bankruptcy and Insolvency Taxation
ASIN: 0471728918 |
Book Description
On April 20, 2005, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which represents in many ways the most significant changes in the bankruptcy laws since the Bankruptcy Code became effective October 1, 1979. The 2005 Act consists of 16 different titles that can be summarized into five major areas:
(1) Business changes, often originating because of perceived abuses
(2) Chapter 15 dealing with cross border issues
(3) Taxes
(4) Means testing
(5) Consumer abuses and protection.
The
2006 Supplement will bring the reader up-to-date on these changes.
Book Description
In 1982 Johns-Manville, a major asbestos manufacturer, declares itself insolvent to avoid paying claims resulting from exposure to its products. A year later, Continental Airlines, one of the top ten carriers in the United States, claims a deficit when the union resists plans to cut labor costs. Later still, oil powerhouse Texaco cries broke rather than pay damages resulting from a courtroom defeat by archrival Pennzoil.
Bankruptcy, once a term that sent shudders up a manager's spine, has now become a potent weapon in the corporate arsenal. In his timely and challenging study, Kevin Delaney explores this profound change in our legal landscape, where corporations with billions of dollars in assets employ bankruptcy to achieve specific political and organizational objectives. As a consequence, bankruptcy court is rapidly becoming an arena in which crucial social issues are resolved: How and when will people dying of asbestos poisoning be compensated? Can companies unilaterally break legally negotiated labor contracts? What are the ethical and legal rules of the corporate takeover game?
In probing the Chapter 11 bankruptcies of Johns-Manville, Frank Lorenzo's Continental Airlines, and Texaco, Delaney shows not only that bankruptcy is pursued by managers more and more as a strategy, but that it is becoming accepted by the business community as a viable option, and not just a last-ditch solution.
This searing exposé of current corporate practices will incite debate among corporate executives, lawyers, legislators, and policy makers.
Customer Reviews:
Don't Bother.......2004-02-27
The author should have stuck with sociology or at least taken an accounting class before writing this book. Overall, the book is what you would expect from a sociologist writing about business.
Corporate bankruptcy can be a STRATEGY!.......2003-06-05
I wanted to learn more about the asbestos problem and the bankruptcy filing of John-Mansville since I knew someone who had lung problems from asbestos. I heard about this book and got it. This is the first thing that I have read that really helped me to understand what happened when Mansville, the biggest asbestos company went bankrupt. The book is clear and explains complicated bankruptcy cases to the lay person. Now, I finally understand why people with asbestosis ended up going through years of delay in BANKRUPTCY court of all places! What is most amazing is how people who get asbestos end up being treated like "unsecured creditors" as if they lent their life to the corporation like a bank loan! Truly amazing.
Great book.......2003-02-13
I read this book for a college class. I expected it to be boring because it was about bankruptcy but instead it was really interesting... The cases do come alive and you realize bankruptcy means something different than you thought it did. This book has me interested in taking bankruptcy classes in law school, something I thought I'd never do!
The politics of corporate bankruptcy: top-rate.......2002-08-19
This book is not about the financial aspects of bankruptcy and it is not about how to turn around companies. It is about the politics of major corporate bankruptcies. It is clearly written and well documented. It is amazing how prescient the book is given what has happened at WorldCom and at Enron. For anyone that is interested in politics and the ways that Chapter 11 can be used as a strategy, this book is the best. If you want to understand why some huge companies might actually CHOOSE bankruptcy and gain some advantages by doing so, check out this book.
A Poor Use of Paper.......2002-08-14
This is without a doubt, the most uninsightful book I've ever laid eyes on. The book reads like a freshman term paper written in short order. It is clear the book was written without objectivity and any depth in understanding of finance. The book was also originally published in 1992 (or sooner). Save your money.
Book Description
LoPucki's provocative critique of Chapter 11 is required reading for everyone who cares about bankruptcy reform. This empirical account of large Chapter 11 cases will trigger intense debate both inside the academy and on the floor of Congress. Confronting LoPucki's controversial thesis-that competition between bankruptcy judges is corrupting them-is the most pressing challenge now facing any defender of the status quo."
-Douglas Baird, University of Chicago Law School
"This book is smart, shocking and funny. This story has everything-professional greed, wrecked companies, and embarrassed judges. Insiders are already buzzing."
-Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard Law School
"LoPucki provides a scathing attack on reorganization practice. Courting Failure recounts how lawyers, managers and judges have transformed Chapter 11. It uses empirical data to explore how the interests of the various participants have combined to create a system markedly different from the one envisioned by Congress. LoPucki not only questions the wisdom of these changes but also the free market ideology that supports much of the general regulation of the corporate sector."
-Robert Rasmussen, University of Chicago Law School
A sobering chronicle of our broken bankruptcy-court system, Courting Failure exposes yet another American institution corrupted by greed, avarice, and the thirst for power.
Lynn LoPucki's eye-opening account of the widespread and systematic decay of America's bankruptcy courts is a blockbuster story that has yet to be reported in the media. LoPucki reveals the profound corruption in the U.S. bankruptcy system and how this breakdown has directly led to the major corporate failures of the last decade, including Enron, MCI, WorldCom, and Global Crossing.
LoPucki, one of the nation's leading experts on bankruptcy law, offers a clear and compelling picture of the destructive power of "forum shopping," in which corporations choose courts that offer the most favorable outcome for bankruptcy litigation. The courts, lured by big money and prestige, streamline their requirements and lower their standards to compete for these lucrative cases. The result has been a series of increasingly shoddy reorganizations of major American corporations, proposed by greedy corporate executives and authorized by case-hungry judges.
Customer Reviews:
Excellent and well written book.......2007-01-09
Great book, explains how companies can abuse the bankruptcy court system. Very well written, and interesting for a general audience.
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