Edward Smolyansky – a Lifeway Foods shareholder and brother of the US company's CEO – has accused the kefir maker of “blatant deception” after the business pushed back at his bid to get a board seat.
Last month, Edward Smolyansky, who has been critical of Lifeway's performance under his sister Julie, filed a proxy statement with the SEC, seeking board representation.
The move, the filing read, was designed to end “long-running governance failures, value destruction and entrenched leadership practices” at the business.
Edward Smolyansky also put forward Cascadia Capital MD George Sent as a candidate to be a Lifeway director. The company has an annual general meeting planned this month.
On Monday (1 December), Lifeway issued its own SEC filing, criticising the nominees over their alleged “disqualifying track records and ethical failures”.
According to the company, the nominees’ track record show they are “unfit to serve” on the board and pose a “clear risk to shareholder value”.
It claimed Edward Smolyansky was dismissed as chief operating officer in 2022 "for cause" and was "intoxicated on multiple occasions during the performance of his duties while an employee and director of Lifeway".
The company said he is also subject to a protection order barring contact with the CEO.
Lifeway also claimed Ludmila Smolyansky, the mother of CEO Julie, who files joint ownership forms with her son, faces tax liens exceeding $2.3m and that Edward Smolyansky defaulted on a $10.4m mortgage in 2025.
In a statement, Edward Smolyansky said: "The board's baseless personal attacks are an obvious attempt to distract from what truly matters: the company's persistent governance failures and recent leadership misconduct under CEO Julie Smolyansky. Instead of addressing the issues affecting shareholder value today, the board has chosen to publish distorted and false narratives to avoid accountability."
In a further response, he told Just Food: "In a nutshell, beyond the official statement, I will unequivocally state that Lifeway continues to engage in blatant deception. Their statement is riddled with unsubstantiated lies and misleading allegations about me, my family, and my mother, Ludmila.
"These are attacks on our family members. We have always maintained a principle of not suing our own company but, this time, Lifeway may have crossed a moral 'red line' that we cannot ignore. We are evaluating legal options but we are currently focused on the upcoming election and will not be intimidated, harassed, or bullied."
Sent, the second nominee, previously chaired the committee that recommended removing Edward Smolyansky from his roles, Lifeway said.
"Mr. Sent’s sudden willingness to align himself with [Edward Smolyansky] is a disturbing reversal of principle that underscores questionable judgment and deeply concerning ethics," Lifeway said.
Just Food has approached Sent for comment.
The proxy battle is the latest chapter in more than a year of family and shareholder conflict at Lifeway.
It follows Edward Smolyansky's criticism of Lifeway last month extending its shareholder rights plan to October 2026, a move he called a “shield for management” and “the most brazen example of board and management entrenchment”.
Lifeway adopted the limited duration rights plan in November last year after turning down takeover interest from Danone.
The group said cited its “highly concentrated share ownership” as the reason for the decision. Edward Smolyansky, alongside his mother, owns a little over a quarter of Lifeway. Danone holds just under 23% of the company.
Lifeway rejected Danone’s takeover offers of $25 per share in September 2024 and $27 per share two months later, deeming both too low.
An agreement with Danone in September this year included a commitment to “refresh” the Lifeway board, the separation of the chair and CEO roles and a “stay” on litigation between the two companies.
In return, Danone agreed not to back any board replacement until June 2026. Four new independent directors joined under the agreement with Danone.
The litigation between the companies had centred on a shareholder agreement that Danone said Lifeway had breached with a share award to Julie Smolyansky earlier this year. Lifeway said the shareholder agreement violated state law in Illinois, where the company is based.
