Back to Index

The US: The Enron case



David ("Bert") Westbrook writes: "I checked the SEC filings -- Enron is in fact an Oregon corporation, although parts of it have been incorporated elsewhere, e.g., Delaware.

Enron was incorporated in Oregon because, in the early days of the company, it wished to buy a utility in Oregon [but did not.RH]. Choosing a state of incorporation is usually a business decision driven by specific concerns. So, for example, in order to convince BMW to put its factory in S.C., that state built BMW a railroad and improved schools. BMW Manufacturing is a S.C. corporation. [Such help involves the construction of plants, not incorporation. RH]. Fine-grained legal questions, e.g., state tax treatment or the availability of takeover defenses, may also play a role.

The question of state of incorporation has no bearing on your concerns about Enron. I can't imagine a different state of incorporation would have prevented the debacle. Does Enron suggest any reforms to the law of corporations? I've heard that there is a movement afoot among institutional investors (primarily union pension funds) to insist, perhaps through the bylaws, that accounting be done by firms who are not also doing consulting or other work (i.e., who don't have the conflicts of interest that appear to have tainted Arthur Anderson's audit of Enron)."

My note: Many WAISers have expressed concern and disgust with the Enron case. Rather than post their complaints, I have told them to wait and see how the whole thing turns out.

Ronald Hilton - 2/16/02


Webmaster