A Review of the Nigerian Energy Industry

PwC completes 14-year Enron administration

Unidentified woman carrying a box out of Enron headquarters.
Unidentified woman carrying a box out of Enron headquarters.

09 April 2015, Sweetcrude, Lagos – Pricewaterhouse Coopers (PwC) has announced that its work on the UK Enron administration is now complete, with £2 billion in dividends paid out, 14 years after the firm was first appointed when the energy firm collapsed in 2001 with the loss of 21,000 jobs.

Tony Lomas, partner at PwC, who oversaw the administration, said that at the time when Enron filed for bankruptcy in the US and administration in the UK, ‘this was the biggest and most complex insolvency the world had ever seen.’

On appointment, PwC took control of eight separate Enron Group companies and went on to run significant businesses, sell high value assets and agree a series of complex claims made against the group.

Lomas said: ‘There were a number of milestones achieved, including managing the groups’ interests in two UK power stations; selling 7% of the UK’s annual gas supply for a four-year period; completing the first ever sale of a credit derivatives book out of insolvency, selling two regulated metal trading companies and selling a major North Sea gas transportation pipeline contract.’

Over that time, PwC worked with the creditors’ committees and negotiated the claims of hundreds of creditors and more than 1,000 employees.

Now final dividends from the remaining companies have been declared, bringing the dividend total to £2 billion. The firm says a ‘significant sum’ of unclaimed dividends is to be shared between a number of different charities, now that insolvency proceedings are complete.

Enron’s collapse after the company filed for Chapter 11 bankruptcy in the US was highly controversial, following revelations of fraud and money laundering.

Its former chief executive, Jeffrey Skilling, is now serving a 14 year sentence, having been convicted in 2006 on 19 counts of securities fraud, conspiracy, insider trading and lying to auditors.

Chairman Kenneth Lay was also found guilty on fraud charges but died that year.

Enron’s accountants, Arthur Andersen, were eventually dissolved after the discovery the firm had helped Enron hide losses in its subsidiaries. Several accountants were found to have overstated financial reports, cash flows and earnings.

US insolvency proceedings at Enron are ongoing.

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