What was Ken Lay's net worth?
Ken Lay was an American businessman who had a net worth of negative $250,000 at the time of his death. Before his fall, Ken Lay had a peak net worth of $400 million.
Kenneth Lay was a businessman and convicted felon who founded and ran the Houston, Texas-based Enron Corporation. With other key figures at the company, he was involved in massive accounting fraud that ultimately resulted in Enron's bankruptcy in 2001. Lay was consequently indicted by a grand jury and found guilty of 10 counts of securities fraud, although he died of a heart attack three months before his sentencing in 2006.
Estate After Death
At the peak of his life, Ken Lay had a personal net worth of $400 million. He owned more than a dozen homes and in 1999 alone earned $42.4 million in total compensation. Between 1998 and 2001 he earned $300 million worth of stock and stock options from Enron. After Enron's collapse, Lay claimed that Enron stock constituted 90% of his net worth and his estate was technically worth negative $250,000 (in 2006). After his death, Enron's creditors sued his widow Linda to recover a portion of $10 million was paid by Enron prior to its collapse to buy the two an annuity. The creditors and Linda reached a settlement in 2011.
Early Life and Education
Kenneth Lay was born on April 15, 1942 in Tyrone, Missouri to Ruth and Omer. His father was a Baptist preacher. Lay grew up largely in poverty until he moved with his family to Columbia, Missouri. There, he attended David Henry Hickman High School and the University of Missouri. Lay earned his bachelor's degree in economics from MU in 1964 and his master's degree from the school in 1965. He went on to obtain his PhD in economics from the University of Houston in 1970.
Career Beginnings
From 1965 to 1968, Lay worked as an economist at Humble Oil. He subsequently enrolled in the United States Navy's Officer Candidate School, where he rose to the rank of lieutenant. After that, from 1971 to 1972, Lay worked as a technical assistant to the commissioner and vice chairman of the Federal Power Commission. He also served as the energy deputy undersecretary in the United States Department of the Interior. Returning to the world of business, Lay became an executive at Florida Gas Transmission in 1974. In the early 1980s, he served as the president of Continental Resources and as the president and COO of Transco Energy.
Enron Corporation
In 1985, Lay founded Enron Corporation as a merger between Houston Natural Gas in Texas and InterNorth in Nebraska. He subsequently became CEO and chairman of the combined company, which specialized in energy, commodities, and services, including electricity, natural gas, and communications. In 1990, financier Andrew Fastow joined Enron Corporation and quickly ascended the ranks within the company. With Fastow, Lou Pai, and several other key figures at the company, Lay was involved in massive accounting fraud that concealed Enron's huge quarterly losses. Although it owed over $30 billion at the height of its debt, the company was able to show a debt-free balance sheet due to its fraudulent accounting schemes. Meanwhile, Fastow was defrauding Enron out of tens of millions of dollars.
In the summer of 2001, Jeffrey Skilling, who had become CEO of Enron earlier in the year, abruptly resigned. After that, Enron began to collapse. CFO Andrew Fastow was heavily scrutinized for his accounting activities, and multiple banks told Enron that they would not issue loans to the company if Fastow remained in his position. It was eventually revealed that Fastow had completely lost track of his basic financial management duties, leaving Enron with almost no liquidity. The company ended up filing for bankruptcy in late 2001 in what was the largest bankruptcy ever at the time. Around 20,000 employees lost their jobs and investors lost billions of dollars.
Indictment and Conviction
In the summer of 2004, Lay was indicted by a grand jury in Houston, Texas for his role in Enron's accounting scandal. He was charged with 11 counts of securities fraud, wire fraud, and making false and misleading statements. Lay was put on trial with Enron's former CEO and COO Jeffrey Skilling in 2006; both were convicted, with Lay being found guilty of 10 of his 11 counts. His sentencing was scheduled for October 2006, but he died of a heart attack three months prior, resulting in a vacated judgment.
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Political Involvement
A close friend of the Bush family, Lay made numerous contributions to George H. W. Bush and led several committees in the Republican Party. Between 1989 and 2002, he made $5.8 million in political donations, with the majority going to Republicans.
Personal Life and Death
Lay was married twice, first to Judith and then to Linda. He had two children and three stepchildren.
On July 5, 2006, Lay died of a heart attack while vacationing at his house in Snowmass, Colorado, near Aspen. His body was ultimately cremated and his ashes were buried in the mountains.
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