HOUSTON, Jan. 29 — Enron Corp.’s board of directors named Stephen Cooper as interim CEO and chief restructuring officer to replace Kenneth Lay who resigned as chairman and CEO last week.
Lay resigned after claiming demands on his time from lawsuits and investigations conflicted with the job of restructuring the company now operating under bankruptcy protection from creditors. He remains a member of Enron’s board.
Lay stepped down after press reports that he borrowed millions in cash from Enron’s treasury and paid it back with shares granted from stock options. Reports also surfaced documents were being shred at the company’s headquarters through mid-January prompting the Federal Bureau of Investigations to station agents on the executive floors of Enron’s headquarters to prevent further destruction.
Enron is in Chapter 11 bankruptcy proceedings in New York after a spectacular meltdown beginning in October 2001 when earnings had to be restated for 4 years wiping out almost a $1 billion in shareholder equity. Revelations of off balance sheet debts with credit ratings triggers spurred a crisis in confidence that stymied the marketing and trading business and created a liquidity crunch.
Cooper is the managing partner of Zolfo Cooper LLC, a corporate recovery and crisis management firm. Zolfo Cooper, New York, NY, has worked with other high profile corporate restructurings, including Polaroid Corp., Morrison Knudsen, ICG Communications, Sunbeam Corp., and Federated Department Stores Inc.
Enron also named new members of the Office of the Chief Executive, including Jeff McMahon, formerly chief financial officer, and now chief operating officer. Other members will be former treasurer Ray Bowen who was named chief financial officer. Cooper also will be a member of the Officer of Chief Executive.
“Our focus is on the future of Enron. With more than 19,000 employees worldwide, Enron has real businesses with real value,” said Cooper. “We will work closely with the board of directors, management, and the creditors committee to develop a reorganization plan to maximize value for the company’s stakeholders.”
The board still must choose a new chairman. Lawrence G. Whalley resigned as chief operating officer of Enron and accepted a position with UBS Warburg, a unit of Switzerland’s UBS AG, which agreed to revive Enron’s wholesale trading and marketing business.