Tomahawk, WI 08/07/2014 (Basicsmedia) – The U.S economy received the much-needed boost in terms of taxes after giant drugstore chain, Walgreen Company (NYSE:WAG), announced that it will no longer pursue overseas reorganization in a move commonly referred to as an inversion. Walgreen according to Founding Partner Lopresti Law Group, Marc Lopresti, opted to cancel its plans as a result of its strong public relations rather than following through with the financial gains it would have gained with the move.
The move had elicited debate in the U.S on the fact that the U.S economy was set to lose billions of dollars in the form of taxes. Treasury department has already aired its concern that it could lose up to $20 billion in taxes over the next ten years as a result of the ongoing inversions by many companies in the U.S… President Obama has already instructed the treasury department to act with speed and find the much-needed solution to the inversion strategy that continues to pose great threat to the country’s economy in the long run.
“The reality of it in my opinion, Walgreen Company (NYSE:WAG) made the decisions that they did primarily because of public relation as compared to anything else. […]. When you think about it, the treasury department is concerned about losing something about $20 billion as a result of continued corporate inversions over the next 10 years,” said Mr. Lopresti in an interview on CNBC.
Lopresti is in disagreement with Walgreen Company (NYSE:WAG)’s move to maintain its headquarters in the U.S stating that the company has an obligation to search for avenues that ensure, maximum return to shareholders rather than remaining patriotic to impress the government.
“[…] at the end of the day as I said the board of directors of corporations have a fiduciary duty to maximize shareholders value, and it puts corporation in corporate board in the unattainable dichotomy. Where you can choose between what the president is now classifying as economic patriotism and the Fiduciary obligation to maximize shareholder value, “said Mr. Lopresti.
The move by Walgreen Company (NYSE:WAG) on the other hand might have been forced’ by the fact that its largest customers is the U.S government, thus could not have wished to go against it.