K Mart's Fall: Blame Enron?

There are plenty of management shortcomings to blame for K Mart's bankruptcy. But the discount chain got a good shove from the Sept. 11 attacks--and from Enron. Here's how:

Most states require large companies like K Mart to buy commercial surety bonds, which guarantee, among other things, worker's compensation payments to employees hurt on the job. During the roaring '90s, when risk wasn't a four-letter word, sureties were relatively inexpensive and were used for many purposes. But as the economy slowed, especially after Sept. 11, more and more companies defaulted, leaving insurers the bill.

Enron, which insured future gas deliveries with...

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