Enron Bankruptcy 10 Years Later: Before Bailouts Were Big

Ten years ago, on Dec. 2, 2001, the Enron Corp. filed for Chapter 11 bankruptcy in what was then the largest corporate reorganization in U.S. history. Though just a decade ago, the Enron era in some ways seems to belong to another era—a time when failing companies met with bankruptcy rather than bailouts.

According to John Berlau, of the free-market-oriented Competitive Enterprise Institute (CEI), it was the Bear Stearns bailout in 2008 that “changed everything.” Berlau, who directs CEI’s Center for Investors and Entrepreneurs, told AdvisorOne the Enron failure “was of course devastating to employees, but it didn’t really hurt the larger economy.”

In today’s “culture of bailouts,” Enron might well have been seen as “too big to fail,” according to Berlau. Enron had a substantial $63 billion in assets at the time of its Chapter 11 filing. “With Enron," he said, "you could make the case it was as systemically important as Bear."

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