To former Enron (ENE ) CEO Jeffrey K. Skilling, there were two kinds of people in the world: those who got it and those who didn't. "It" was Enron's complex strategy for minting rich profits and returns from a trading and risk-management business built essentially on assets owned by others. Vertically integrated behemoths like ExxonMobil Corp. (XOM ), whose balance sheet was rich with oil reserves, gas stations, and other assets, were dinosaurs to a contemptuous Skilling. "In the old days, people worked for the assets," Skilling mused in an interview last January. "We've turned it around--what we've said is the assets work for the people."
But who looks like Tyrannosaurus Rex now? As Enron Corp. struggles to salvage something from the nation's largest bankruptcy case, filed on Dec. 2, it's clear that the real Enron was a far cry from the nimble "asset light" market maker that Skilling proclaimed. And the financial maneuvering and off-balance-sheet partnerships that he and ex-Chief Financial Officer Andrew S. Fastow perfected to remove everything from telecom fiber to water companies from Enron's debt-heavy balance sheet helped spark the company's implosion. "Jeff's theory was assets were bad, intellectual capital was good," says one former senior executive. Employees readily embraced the rhetoric, the executive says, but they "didn't understand how it was funded."
