Glisan Continues Testimony
by: Ed Mayberry, March 22, 2006 5:03:00 am
Good afternoon. I'm Ed Mayberry, with Houston Public Radio Business News.
Former Enron Treasurer Ben Glisan (GLISS-un), Jr., has been backing the testimony of other former Enron executives, linking Ken Lay and Jeff Skilling to misleading investors and employees about the financial health of the company in late 2001. He's been reading from his own hand-written notes made at various meetings while at Enron.
Glisan said Lay knew Enron had billions of dollars in losses. He testified that by the summer of 2001, assets were worth at least $3.5 billion less than their recorded value, and Lay attended meetings where the losses were discussed.
Glisan said he was asked by Lay to question credit agencies about how large an accounting write-down Enron could report without endangering its credit rating. He found that the company could sustain a billion-dollar loss and maintain its ratings, but Lay and other executives pressed for reporting a bigger loss.
Glisan said Enron's liquidity was designed to cover a bad trading day, but not to handle being cut off from unsecured bank loans. He feared liquidity calls from banks that would exceed the company's capacity to pay if its credit rating dropped. Glisan said he told Lay that bankruptcy was inevitable on the very day that Lay told employees that Enron was "in great shape."
That's business news. I'm Ed Mayberry, Houston Public Radio.