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Silencing the noise : asbestos liabilities, accounting and strategic bankruptcy

Moerman, L.; van der Laan, S.

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Authors

L. Moerman

S. van der Laan



Abstract

The legacy of the global exploitation of asbestos provides an illustrative case to examine corporate strategy in response to the significant financial risk presented by the long-tail liability. The James Hardie group was the dominant asbestos manufacturing concern in Australia and, confronted with the uncertainties of burgeoning long-tail tort claims, embarked on a radical corporate reorganization. At the centre of the reorganization was the creation of a business unit of limited potential to separate asbestos long-tail liabilities from the profitable operations of the corporate group and locate the risk in an alternate legal arena. The strategic recognition of accounting assets and liabilities to construct a ‘bottom line’ and shift organizational boundaries is explored using Delaney’s theory of strategic bankruptcy. This interdisciplinary and critical sociological lens highlights the power of organizations to exploit the malleability of accounting concepts to pursue their strategic goals.

Citation

Moerman, L., & van der Laan, S. (2015). Silencing the noise : asbestos liabilities, accounting and strategic bankruptcy. Critical Perspectives On Accounting, 27, 118-128. https://doi.org/10.1016/j.cpa.2014.03.004

Journal Article Type Article
Acceptance Date Mar 17, 2014
Online Publication Date Apr 13, 2014
Publication Date Mar 1, 2015
Deposit Date Feb 26, 2014
Publicly Available Date Mar 27, 2014
Journal Critical Perspectives On Accounting
Print ISSN 1045-2354
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 27
Pages 118-128
DOI https://doi.org/10.1016/j.cpa.2014.03.004
Keywords James Hardie Industries Limited, Strategic bankruptcy, Accountability, Social.
Public URL https://durham-repository.worktribe.com/output/1437784

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Copyright Statement
NOTICE: this is the author’s version of a work that was accepted for publication in Critical Perspectives on Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Critical Perspectives on Accounting, 27, March 2015, 10.1016/j.cpa.2014.03.004.




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