With a giant, whooshing sound Enron became the largest company ever to go belly-up. But the energy behemoth, which collapsed in January, was hardly the country's only bankrupt corporation. In the past year 257 publicly traded firms filed for Chapter 11—up more than 300 percent from 80 in 1997. Among them were five of the largest bankruptcies in U.S. history.

Behind these headlines live millions of ordinary workers who were caught short by loyalty to companies that fell apart or to a misplaced belief in the dot-com dream. What follows are four tales of Americans for whom the system went bad. Their stock options and 401 (k) plans are now worthless. And they learned the hard way what it's like to see their life savings go up in smoke.

He'll Never Trust Again

Charles Prestwood of Conroe, Texas, cannot ride his horses anymore. Prestwood, 63, has a heart condition and high blood pressure and doesn't feel fit enough to saddle up Gingerbread and the Kid these days. But that's hardly his main concern: What worries him most is finding the $100 a month it takes to feed the horses. "I'm running virtually in the red," says Prestwood. "It's very sickening, to put it mildly."

When Prestwood retired in October 2000 after 33 years at Enron—most of them as a pipeline operator—he had $1.3 million in Enron stock in his 401(k). But after the company collapsed this year, he lost every penny. "It has devastated him," says Carol Saxon, his friend and neighbor in Conroe, 60 miles north of Houston. Says her husband, Chuck: "He doesn't laugh and joke like he did before. He still has a smile from time to time, but it's not as sincere as it once was."

About the only thing Prestwood thinks he did wrong was to "believe we had the greatest executives in the world." In 1967 the Splendora, Texas, native began making $2.78 an hour as a maintenance man for Houston Natural Gas, which combined with Nebraska Energy in 1985 to form Enron. "He was a fix-it man," says coworker George Maddox, 68, who lost $1.2 million in the Enron collapse. "There was no one I'd rather have show up at the plant when we had trouble." By the time Prestwood was promoted to pipeline operator, he was putting in 12-hour shifts three or four days a week. "I loved to go to work," says Prestwood, the divorced father of a grown son and daughter. (He lives with Helen Tidwell, his longtime girlfriend.) He claims not to have missed a single day in 33 years. "Time off," he says, "wasn't even in my vocabulary."

With around 10 to 15 percent of his base salary—$65,000 when he retired—Prestwood bought thousands of shares of Enron stock for his 401(k) over the years. It did so well he never thought to diversify, ignoring 14 mutual funds he had to choose from. "When you're on a horse and you're six lengths ahead, you don't jump off," he says. He also listened when execs urged employees to buy Enron stock as a show of loyalty. "I owned part of the company," he says. "I may have only owned a speck of rust on a compressor, but it was mine."

When the stock began to slide in January 2001, "that's when I started trusting other people," he says, namely the analysts who "were calling it a 'strong buy' even when the stock was going plumb out of sight." Prestwood waited for the stock to bounce back and was still waiting when Enron declared bankruptcy in January. His nest egg vanished overnight. "My whole life's work," he says, "destroyed."

Now Prestwood relies on his $1,294 monthly Social Security payment and $555 a month from his pension—barely enough to cover such expenses as the $747 mortgage on his modest three-bedroom redbrick home. The $30,000 or so he expects to make by selling eight of the 11 acres he owns will help keep him afloat. But his two beloved horses may soon have to go. "I can't even afford a hamburger," says Prestwood. Most nights he dines on venison he bagged while hunting and keeps stored in his freezer.

This January Prestwood joined more than 100 coworkers in a class-action lawsuit against Enron and hopes to see some of the money he lost. If he does, "I would never invest a penny in anybody's stock again," he says. "Because, hell, I can't trust nobody."

Taxed to the Max

To Judy Pace of Redwood City, Calif., working at the start-up software company BroadVision felt like a dream come true. Despite Pace's lack of a college degree, the fledgling Silicon Valley firm—which she joined around its first birthday, in March 1996—embraced her as one of the team. "It was like a small family," recalls the divorced mother of two daughters. "Everybody worked long and hard and happily so." Beyond the sense of shared achievement, there were more tangible rewards as well—stock options. By June of 2000, when Pace decided to accept a better-paying job, she had enough options to secure her family's financial future. All she needed to do was buy her allotted 31,000 BroadVision shares, for about a dollar apiece, then sell them. Since the stock was trading at around $40 a share, that would give her, in theory, a tidy nest egg of $1.24 million.

The problem is, Pace, now 48, bought the shares but never sold them. That put her in the same bind as an estimated 1 million other middle-class Americans last year, who found themselves squeezed between two forces: the bottom falling out of technology stocks and a little thing called the alternative minimum tax (AMT), which taxes the value of stock at the time options are exercised, even if the shares aren't sold. When Pace talked with her CPA in March 2001, she found out that because of the tax she owed $436,000. By then her stock had slid to $2.20 a share. "I freaked," she recalls. "It took every ounce of composure not to cry in front of him."

Pace hid the bad news from her daughters, taking out a loan to pay $80,000 in taxes to the state of California and $50,000 to the IRS to buy time. "My life became a huge nightmare," she says, "sleepless nights, hoping the stock would go back up." The only thing that increased, however, were her woes. In August the IRS slapped a lien on her two-bedroom condo and told her they would be charging her $7,000 a month in penalties and interest on the approximately $300,000 she still owed. The next month she was downsized from her job.

Today Pace is doing clerical work for $15 an hour while preparing an offer of compromise with the IRS. She fully expects to have to sell her condo and to stop helping her younger child Kelly, now 21, with her tuition at UC Santa Barbara. (Pace's older daughter Jessica, 24, is modeling in Los Angeles.) "I think she's aged a lot," says Pace's friend and former coworker Sharon Paul, 43, who ended up paying $125,000 in AMT herself. Although Pace admits to anger at her situation, she's trying to make the best of it. She has just become certified as a massage therapist and is thinking about relocating to Oregon. "I am actually moving on; I'm in a good place," she says. "The one thing they can't take is my spirit."

His Millions a Mirage

Russ Yanda fairly bubbles as he shows off a small pewter dragon he created in his home workshop in Superior, just outside Boulder, Colo. Pointing out its features to a couple at a Denver flea market, he relies on the same techniques he used to sell cars at a Boulder dealership, his most recent job. "The two things you need," explains Yanda, 43, "are attitude and enthusiasm."

That gung ho spirit helped Yanda become a hot-shot dot-commer sitting on a pile of stock worth $10 million only three years ago. How he wound up selling cars and pewter dragons is a story of bad planning and worse luck. In 1996 Yanda and two pals cofounded MatchLogic, Inc., a firm that helped companies manage their Internet advertising. Yanda, who was born in Merrill, Wisc., and his partners sold his firm to Excite-AtHome for $89 million in 1998. "No cash," he says. "All stock."

The next year MatchLogic was valued at $3 billion. His cut of the stock, worth more than $100 a share in 1999, would have earned him $10 million if he had cashed in. But that was the catch—he couldn't. The company required he wait four years to be vested. In early 2000 the stock tumbled, and last fall ExciteAtHome filed for Chapter 11. Yanda got 34 cents a share when he quit last year, netting $13,600. "I was bitter," he says. "You almost get suicidal."

A technical college graduate, Yanda swore off any more high-tech ventures. Earlier this year his ex-wife, Terry Mattson, 40, who shares custody of their children Brittany, 17, and Broc, 14, moved back into their six-bedroom, $750,000 home in Superior to help him pay his $10,000 in monthly expenses. Needing full-time work and wanting to try something new, he got a gig selling cars, then quit to focus on making silver jewelry and other trinkets in his basement. Still Yanda knows he may soon have to sell his Jaguar and his house.

His dizzying fall has left him chastened—and a little less gung ho. "I thought for sure I'd never have to work another day," he says with a sigh. "I thought I was set for life."

Losing a Job, Keeping the Faith

She remembers the day she found out that Polaroid, the only company for which she had ever worked, was going belly-up. "I always thought it would bounce back," says Charlye Cuby, 46. "But when it filed for bankruptcy and I heard 'No more health insurance,' my first thought was, 'Oh my God—Silas.' "

Her son Silas, 7, has Down syndrome. Caring for him and his brother Jonathan, 17, has become harder for Cuby, a single mother, since Polaroid crashed in October 2001. After 22 years in the Atlanta office, most recently as a customer service rep earning $33,000 a year, Cuby had about $30,000 worth of Polaroid stock in a stock options plan. Yet she didn't pay much attention to her retirement fund, she says, "because I was busy taking care of my children here and now."

Cuby was let go in May 2001, when Polaroid closed its Atlanta office, but she thought the company would cover her health insurance for another year. That was until Polaroid filed for Chapter 11 five months later. And the stock in her options plan, worth $60 at its high, was sold off for nine cents a share, leaving Cuby with nothing. "I put all my eggs in one basket," she says.

Cuby did make some key decisions that helped soften the blow. Right after being laid off, she withdrew the $25,000 in her 401(k), netting her $16,000 after taxes and penalties. That, and some $8,000 in severance pay, helped her survive her first months of unemployment. (She now receives $1,136 a month in unemployment benefits.) Cuby also signed Silas up for Medicaid, which covers all but $20 a month for his two daily medications. Still, she and Jonathan have gone without health insurance since October.

Cuby has lived in the two-bedroom home of her mother, Ella, in DeKalb County, 25 miles east of downtown Atlanta, since separating from her husband, Charles Freeman, in 1999. Finding new work is difficult, while meeting her expenses—$200 a month for utilities, $100 a month for Silas's daycare, $80 a week for gas, $120 a week for groceries—is a "grind," says Cuby. She may be able to pay for a yearbook and school ring for Jonathan, who graduates from high school in May, but sending him to college seems out of the question. Worst of all is Silas's prognosis: He has an atrial-ventricular canal defect, a cardiac condition related to Down syndrome, and most kids with that ailment, say his doctors, do not live past 10.

And yet it is her son's spirit that helps Cuby cope with the loss of her job, her savings and her faith in a 1 company she considered her foundation. "Silas has such energy and is a real go-getter for life," she says. "I don't worry about what may come up; I just go with what I have."