Thread: More Enron
01-29-2002, 11:04 PM #1ptbyjason Guest
Little sympathy for Enron chief
Go here to view the video
HOUSTON, Jan. 29 — It is a very telling videotape. A week after Enron released its first disastrous earnings report, and just one day after the Securities and Exchange Commission opened its investigation into the company’s business practices, Kenneth Lay held a question-and-answer session with his Enron workers.
OCTOBER 23, 2001, the day after federal investigators announced an inquiry, Ken Lay called an all-employee meeting across the street from Enron headquarters. NBC News has obtained a videotape of that tense meeting, which began with Lay complaining that Enron was under attack, and with a promise to restore the company’s plunging stock price.
“Many of you were a lot wealthier six to nine months ago, now concerned about the college education for your kids, maybe the mortgage on house, maybe your retirement,” said Lay. “And for that I am incredibly sorry. But we are going to get it back.”
Lay tells the workers he, too, lost a substantial portion of his net worth, but many in the audience seem hostile during the written question period.
“I would like to know if you are on crack,” read one written question. “If so, that would explain a lot. If not, maybe you ought to start because it is going to be a long time before we trust you again.”
Lay said the hatred is understandable and promised, “There are no big, significant layoffs planned in any group that I’m aware of,” no more fancy accounting and said that Enron can recover. “There is plenty of understanding why some people are hostile,” said Lay during the meeting. “You have some reasons to have some concerns. We have all been damaged.”
Now, a short three months later, Enron is bankrupt and few Enron employees feel sorry for Ken Lay’s personal wealth issues. Lay’s wife, Linda, told NBC News that the couple is broke, that the more than $300 million he earned during the last four years is gone.
“I can’t imagine them being broke,” says Tammie Huthacher, pregnant and now out of a job. She was fired from Enron during the collapse and says the Lays don’t know what broke is. “Broke to Linda Lay and her family, I would think, would probably mean not having a couple million in a bank account.”
In fact, NBC News found eight homes and lots in Houston and two in Galveston still owned by Ken and Linda Lay. It amounts to a total value of more than $10 million, and area realtors say none of the properties are currently listed for sale.
As of January 1, Lay still owned more than 5 million in stocks, including 341,000 shares of Compaq worth $3.5 million and 20,000 shares of Lilly, worth $1.5 million. He’s also entitled to an Enron severance package of $25 million.
Enron employees say that broke clearly means different things to different people.
01-29-2002, 11:05 PM #2ptbyjason Guest
Lays' Finances Analyzed
HOUSTON, 6:18 p.m. CST January 29, 2002 - How broke is broke? Linda Lay, the wife of Ken Lay, the former chief executive officer of Enron, said in an exclusive interview with the "Today" show that her family is broke. Thousands of former Enron workers might disagree.
News2Houston broke down the couple's finances.
The Lays reportedly hold about $8 million in stock not related to Enron, according to News2Houston.
Real estate holdings add about $25 million to the family's portfolio, sources said.
The Lays live in a luxury high-rise apartment in the exclusive River Oaks area of Houston. The apartment at The Huntington, 2121 Kirby Drive, is valued at $7.1 million.
Other Houston properties include a home at 2406 Kingston St., listed for sale at $259,300.
A vacant lot, 2412 Westgate St., is valued at $331,200.
In all, the Lays own nine properties in the Houston area, including 3615 Hazard, 2514 Avalon Place, 1852 Marshall, 1856 Marshall, and 1918 Sul Ross, along with three vacation homes in Galveston, Texas. All of the properties are valued at $10.5 million.
In Aspen, Colo., the couple owns four properties. Two of them are listed for sale at $6 million each.
Linda Lay told the "Today" show that they're in danger of personal bankruptcy.
"We've been poor and we've been rich and we were happy when we were poor and we were happy when we were rich," Lay said.
Some Houstonians don't believe Lay's claim.
"I don't think they know what hurting means," said Bobby Kamali, a former Enron employee. "I have friends that are on food stamps, friends that are losing their houses."
A financial expert said that it's conceivable that Ken Lay could go from being on top of the world to having next to nothing.
"Only their personal accountant knows for sure," said Randy Price, a senior vice president with Dain Rauscher. "They were very involved in charity. They gave away a lot of money. Evidently they spent a lot of money.
"With the taxes that someone like that would pay, upkeep on several properties -- Colorado, Houston, Galveston, etc. I'm sure he had a high lifestyle. It is conceivable that they don't have that much. Obviously what you started with and what you lost would have a big impact on Mr. Lay's balance sheet."
Price also said that it's hard to make any judgments without knowing what the Lays owe and if the real estate holdings are heavily mortgaged.
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