LWAY - Lifeway Foods Inc. NASDAQ (LWAY) Largest Shareholders Ludmila and Edward Smolyansky Demanding the Company's Board of Directors and CEO Resign | Benzinga
- Specifically Calls for Resignation and Replacement of Lead Director Jason Scher, Directors Pol Sikar, Jody Levy, Dorri McWhorter, Perfecto Sanchez and CEO/Chairperson Julie Smolyansky
- Seeks New Independent Board to be Comprised of up to 8 members, including past Director and Co-Founder Ludmila Smolyansky, as well as an invitation to current and past Director Juan Carlos Dalto, whom the Smolyansky's feel is the only qualified independent Director
- Immediate Termination of Lifeway Foods Corporate Representative and Julie Smolyansky's "Chief of Staff" and Spouse, Jason Burdeen, a former jeweler, whom is believed to be acting as the defacto CEO and General Counsel of Lifeway
- Adoption of an Anti-Nepotism Policy to the Bylaws
- Calls for Operational and Strategic Review of Business
- Full Letter and Presentation Available www.lifebacktolifeway.com
CHICAGO, July 18, 2024 /PRNewswire/ -- Ludmila and Edward Smolyansky ("The Smolyanskys"), who beneficially own approximately 29% of Lifeway Foods Inc. ("Lifeway" or the "Company"), today released a letter and presentation detailing their belief about certain directors' history of breaches of fiduciary duty, mismanagement of Company assets, and history of underperformance, while calling for swift and significant changes.
The Smolyanskys' campaign, which began in February 2022, originally called for replacing the Company's CEO and commencing an exploration of the Company's strategic alternatives. Lifeway's shares rose approximately 50% following that disclosure. The Company and the Smolyanskys settled to avoid a public proxy battle. In its letter today, The Smolyansky's stated that the Company "disregarded our July 2022 settlement agreement, and by February 2023 it was apparent it had not taken it seriously and had breached the agreement." Upset that Ludmila refused to "gift" the CEO more than a million shares, the Company then spent over a million dollars trying to silence the Smolyanskys with two lawsuits. Both of which the Company voluntarily dismissed when forced to prove its claims. Before the dismissals, the lawsuits revealed that the CEO's spouse Jason Burdeen, whom the Company designated as its "corporate representative" in one of the lawsuits, has been exercising significant managerial control of the Company's affairs despite not being an officer of the Company, with his only qualification for this role being that he is the spouse of the CEO. A federal judge ruled that in his capacity as the corporate representative of the Company, Mr. Burdeen had submitted multiple affidavits under oath that were not true.
Last spring, Kanen Wealth Management (KWM) became the fourth largest stockholder in Lifeway and launched an activist campaign on June 8, 2023, issuing a scathing letter critical of Julie and her Board. Lifeways' share price again rallied 15% on the news. The Smolyanskys believe the Board was never fully informed of this activist campaign by the CEO and her husband. Director Dorri McWhorter testified to this under oath in December 2023. The Board was also never fully informed in 2021 when Julie sought approval of the acquisition of the California-based Glen Oaks yogurt brand. Ed and Ludmila, Directors at the time, raised concerns about the acquisition, because ...
LWAY) Largest Shareholders, Ludmila and Edward Smolyansky, Demanding the Company's Board of Directors and CEO Resign>Full story available on Benzinga.com