Enron employees who lost their pensions will have to wait longer to get any of an $85 million settlement because two ex-Enron-CEOs and a bank that worked on their pensions have appealed.

Ken Lay, Jeff Skilling and Northern Trust Co. asked a federal appeals court to hear their complaints about being kept out of this settlement. The deal had been approved by U.S. District Judge Melinda Harmon, which uses two Enron insurance policies to pay the workers. Without an appeal, workers could have been paid in a matter of months.

The $85 million-plus settlement is not a tremendous amount of money when divided amongst all the ex-employees. About $17 million is set aside for lawyers. The $69 million left amounts to about $3,500 per person spread out over 20,000 workers. The actual division could differ.

When Jeff Skilling became CEO of Enron, it certainly appeared as if that had always been his goal. The clause in his contract saying he could bail out and collect $20 million if not named CEO was, according to him, not the naked power play it appeared to be.

Skilling claimed it was Ken Lay's idea -- Lay realized that Skilling was restless. As it became clear that Lay had every intention of turning over the job to him, Skilling felt he had no choice but to accept the position.

"Drive and ego, control and power," says a former Enron executive who was close to Skilling. "You want the next job. Then, on the other hand, you want a life." In his friend's view, Skilling was genuinely conflicted, but he wasn't able to walk away from the prestige of being an Enron executive.

Around 1995, Ken Lay had received complaints from a female employee about Enron employees' antics at "gentlemen's clubs." Almost certainly this was in reference to Lou Pai, CEO of Enron Energy Services, although not exclusively.

Ken Lay responded by issuing a memo that Enron would no longer pick up the tab at topless bars.

"When that memorandum came out, the trading floor went completely quiet. There was a pall for two days," recalls one former ECT executive.

When the Maharashtra government pulled the plug on the Dabhol plant, it was extremely costly to Enron, approximately $900 million wasted.

For Rebecca Mark, it was a different story. For one thing, it made her rich. One executive remembers a conference call between Ken Lay and Rebecca Mark, to discuss Mark's bonus for Dabhol. The cash-flow estimates she had prepared, assumed, naturally, that everything would go smoothly, but Lay offered no objections to her spreadsheet.

The project team split $20 million, of which Mark received a huge chunk. Soon she was zipping around Houston in a ruby-red Jaguar XK8 convertible. She had a Land Rover for the kids, a lake house, a ten-acre retreat in Taos, and an apartment on Manhattan's Upper East Side.

Sherron Watkins was not the sort to keep issues to herself. She spoke freely about it within her circle of friends. About this time, she also called a friend in Global Finance.

"Enron's going down," she announced. "Andy and Causey are Going to jail."

Watkins was no babe in the woods. She had helped manage the JEDI partnership for Fastow, and had witnessed shenanigans at broadband, and was well-versed in Fastow's conflicts at LJM.

But this was far more alarming. Even as she continued to gather information, she raced to frightening conclusions. This was the worst accounting fraud she'd ever seen!

A month after the 2001 analysts' meeting, Jeff Skilling and Ken Lay held one of their own regular employee meetings. They took the opportunity to announce Enron's new vision.

Clearly, the World's Leading Energy Company was no longer grand enough. The management committee had held a half-dozen meetings to brainstorm. The American executives loved the World's Coolest Company, but many of Enron's foreign employees didn't know what it meant. Instead, they chose the World's Leading Company.

Later in the meeting Skilling explained how one measured the World's Leading Company, not that it had been in doubt.

The first phase of Enron's Dabhol, India power plant started producing power in May 1999, almost two years behind schedule. Then construction started on phase 2. Costs soared and would ultimately climb to $3 biillion.

Then the whole thing came crashing down.

The MSEB refused to pay for all the power, and it became clear that getting the government to honor the guarantees would not be an easy task. Even though Mahrashtra suffers from blackouts to this day (and they're getting worse). Even so, at the time it said it does not need and cannot afford Dabhol's power.

Former Enron Energy Services CEO Lou Pai's passion for 'gentlemen's clubs' bled over into his work life.

One evening, Lou Pai joined an Enron group for a bachelor party at Lipstick. At about 2 A.M., as everyone was preparing to clear out, an unmarried member of the group asked Pai his secret: how did he keep his wife from smelling the dancers' scent on his clothes?

"That's easy," Pai explained. "I go to a gas station, and rub some gasoline on my hands, and it kills the perfume."

"If you do that, Lou," someone shot back, "doesn't your wife think you're fucking the gas station attendant?"

Former Enron Broadband Services Co-CEO Joe Hirko said Friday that when he told stock analysts in 2000 that Enron's network wasn't "a pipe dream" but existed at that moment, he was telling the truth. He was on the stand for the second day and will be back next week defending charges that he lied to those analysts.

Hirko, on questioning from his lawyer Per Ramfjord, insisted that nothing false was said at the analyst conference about the network capabilities of EBS and that he never heard anyone plan to make misrepresentations.

The jury in U.S. District Judge Vanessa Gilmore's court was again shown snippets of video tape from the January 2000 conference that are key to the charges. "Is this a pipe dream?" Hirko said in a video. "No, this is something that exists today." He told the stock analysts that Enron could control its network to deliver a "quality of service for the Internet" never possible before.

When Jeff Skilling's ascension to the position of Enron CEO was announced, by all appearances he was on top of the world. Business Week celebrated his new position with a worshipful cover story, featuring Skilling precisely as he wanted the world to see him, dressed in ultracool black, electricity sizzling through his body.

Worth magazine described him as "hypersmart" and "hyperconfident" -- and named him America's second-best CEO (behind Microsoft's Steve Ballmer) before he'd even been on the job three months.

Merrill Lynch's Rick Gordon emailed Skilling to tell him that David Komansky, the firm's CEO, was searching for "potential new board members," and wanted to "get together" with him.

After construction on the Dabhol power plant was halted by the Maharashtra government on August 3, Rebecca Mark's extraordinary efforts not only brought the Maharashtra State Electricity Board back to the table, but resulted in a new agreement: on February 23, 1996, Maharashtra and Enron announced a new agreement.

Enron cut the price of power by over 20 percent, cut total capital costs from $2.8 billion to $2.5 billion, and increased Dabhol's size from 2,015 megawatts to 2,184 megawatts. And both parties formally committed to developing the second phase. On December 10, 1996, Enron announced that the financing for Phase I had again been secured, and that construction had resumed.

As Sherron Watkins surveyed Enron assets to see what could be sold, it didn't take her long to see a pattern. She started fixating on all the losers Enron had hedged with the Raptors. She saw the cryptic footnotes in Enron's SEC filings suggested Enron had used Special Purpose Entities to avoid $500 million in losses in 2000 alone.

In the few months since the Raptors were restructured, the value of the hedged assets had continued to fall. Of course, that mushrooming obligation in the Raptors -- hundreds of millions -- was supposed to be covered with millions of Enron shares, but their value had plummeted too.

On December 13, 2000, Enron announced that Jeff Skilling would succeed Ken Lay as the CEO of Enron. Officially, power would change hands in February 2001.

"I'm glad to see that Ken Lay has the presence of mind to allow Jeff, who's really been running this show for a couple of years anyway, to go ahead and take over," Merrill Lynch analyst Donato Eassey told the New York Times, summing up the consensus view.

In the analyst community, there were rumors that Skilling had forced Lay's hand by hinting that he had another job offer. Earlier that year, Skilling had renegotiated his contract with  the following loophole: if he was not named CEO by the end of 2000, he could leave the company and collect a payout of over $20 million.

Sherron Watkins was a mid-level Enron veteran who had come over to Enron from Arthur Andersen. Andy Fastow hired her in 1993. Like many Enron employees, she was bright, mercenary and ambitious. Like many, she'd made the rounds at Enron, moving from Enron Gas Services to International to Broadband.

And like many of her colleagues, Watkins had earned her biggest payday -- $175,000 bonus -- from a big deal (in 1999, in Korea) that ultimately lost money. Long before that became apparent, she'd sunk the bonus money and her Enron stock options into a heady new lifestyle -- a $500,000 home just a few blocks from Andy Fastow's, vacations in Italy and Mexico, and a green Lexus SUV. Her base salary was about $150,000.

Lou Pai, CEO of Enron Energy Services, had a passion for making money. His other passion was strip clubs. Topless bars had long been a part of the old all-male oil-and-gas culture, and Houston was a breeding ground for their latest incarnation: upscale "gentlemen's clubs" with a veneer of polish and private VIP rooms, where a big spender could buy lap dances while sipping Dom Perignon.

In the early 1990s, some gas industry dealmakers still entertained out-of-town customers at such places. Pai wasn't there just with clients; he could be found regularly after work, hanging out for hours at Rick's Cabaret, The Men's Club, or Lipstick. One early ECT colleague recalls jetting to Dallas Pai for an industry conference then heading straight from the airport to a topless bar.

"We didn't even go to the convention, the only thing Lou wanted to do was go to a strip joint," he said.