investors‚ Enron needed to find a way to hide those debts. Andrew Fastow‚ CFO of Enron‚ turned to Special Purpose Entity (SPE). Several legal entities such as LJM and raptors were created and the poorly performing stocks were transferred to these entities. Then‚ the SPE were used to borrow large sum of money from investors with Enron’s overpriced stock as collateral. These SPEs were not reported on the financial statements. In this way‚ the debts were hidden from the stakeholders. Also‚ the borrowed
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the Stanford Prison Experiment July 15‚ 2008 The Stanford Prison Experiment (SPE) by Phil Zimbardo has been for me an example of the astonishing things that we humans are capable of. I guess as an example of human gullibility‚ I had not been skeptical about the experiment‚ which lacks quite a few scientific markers (aside from its ethical problems). During a talk by Barbara Oakley‚ she was asked to comment about the SPE because it showed the influence the situation and roles could have on human behavior
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the management perspective. The three examples of Enron behaving badly that I am going to study are the incidents in Valhalla‚ the electricity trading in California and the conflict of interest between Andy Fastow and his special purpose entities (SPE). These are just a few cases that led to the failure of the "World’s Leading Company." In 1985 Houston Natural Gas merged with InterNorth‚ of Omaha‚ Neb.‚ to form Enron and Ken Lay was named chief executive officer. The company was basically a
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the column‚ a smaller one-armed Erlenmeyer flask that is clean will used to hold this extraction and 5 mL of ethyl acetate will be passed through SPE column‚ to obtain and remove the caffeine from the SPE column. A small one-armed Erlenmeyer flask containing 5 mL of ethyl acetate along with the compound caffeine‚ should be the result after using the SPE column
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in 1930‚ creatively making its way through the Great Depression by opening up the natural gas market with its lower cost and developing extensive pipeline network with the unlimited low-cost labor resource‚ fell apart due to its creative use of the SPEs and related accounting treatment‚ and it never gets a chance to surprise the world again with their creativity in the second largest recession only a few years away. Followed the sank of the energy titanic Enron‚ is the collapse of the most respected
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bankruptcy. The main reason was the Special purpose entities. As per law a company can create SPE for a particular purpose. The debt of the SPE is carried on the books of the creating company. However‚ it could be transferred to the SPE if an independent third party purchased a minimum of a 3 percent interest in the SPE. This financial structure became the favorite of Enron; it created more than 900 SPEs. During the 1990’s Enron set up special entities to transfer its debt off the balance sheet. Enron
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increasing rift between people and their relationship with God and the Church‚ and created four constitutions which addressed the issue. Dei Verbum (Dogmatic Constitution on Divine Revelation)‚ Lumen Gentium (Dogmatic Constitution on the Church)‚ Gaudium et Spes (Pastoral Constitution on the Church in the Modern World)‚ Sacrosanctum Concilium (Constitution on the Sacred Liturgy). These documents are responses to the external issues and internal issues that impacted the Church‚ and are further discussed later
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CASE STUDY: CORPORATE GOVERNANCE AND THE FALL OF ENRON Introduction to the Enron Case Enron was one of the world’s leading energy traders born from deregulation of these markets in certain US states. It rapidly grew and the world followed suit. It was nominated ‘World’s Most Innovative Large Corporation’ six years in row and valued at 64 times its earnings and 6 times its book value. It had one of the highest paid CEOs in the world in 2000. It led an aggressive and apparently effective expansion
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Stanford Prison Study (SPE)‚ Zimbardo carried out‚ an experiment. This experiment had 24 final participants. The guards’ task was to humiliate the prisoners and make the prisoners feel powerless. The result of this experiment was that the guards identified themselves as the in-group and the prisoners as the out-group. In SPE‚ the participants signed consent to be part of the study. The participants were debriefed and offered money at the end of the experiment. The researches were carrying out
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with the asset corresponding liability omitted from the entity’s balance sheet. Entities used Special Purpose Entities (SPE)‚ are also known as Variable Interest Entities (VIE) for off balance sheet treatment of deals. SPE or VIE is a corporation or partnership formed for the purpose of borrowing money to buy financial assets. Debts are move to a newly created company (SPE OR VIE) specifically to make a company look like it has far less debt than it actually does‚ which was the case with Enron
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