#USA #Chicago #Lifeway Foods #Governance #Edward Smolyansky

Key Insights from Edward Smolyansky on Lifeway Foods' Governance

Edward Smolyansky, the largest individual shareholder and board nominee of Lifeway Foods, Inc., has come forward with stark revelations from a 2023 deposition that could shake the corporate landscape of the company. These disclosures highlight significant governance breakdowns during the tenure of former CEO and Chair, Julie Smolyansky, as well as the lack of accountability demonstrated by legacy directors Dorri McWhorter and Jason Scher.

The Investor Dilemma

In preparing for an important shareholder meeting, Smolyansky released crucial insights that form the basis of his call for investors to withhold votes from McWhorter, Scher, and Julie Smolyansky. He argues that the legacy directors have failed to fulfill their fiduciary responsibilities, compromising the interests of shareholders.

Lack of Awareness

One of the most worrying admissions from Dorri McWhorter’s sworn deposition is her acknowledgment of being unaware of a 2023 investor campaign that criticized the board and management. She admitted to not having read an activist letter that raised urgent concerns regarding management practices, nor did she recall any Board discussions regarding these shareholder worries. Smolyansky emphasizes that such ignorance raises serious questions about the ability of McWhorter to represent the interests of all shareholders.

Ignoring Whistleblower Claims

Another alarming revelation involves McWhorter's lack of knowledge about whistleblower allegations made by Lifeway's former CFO. She was uninformed about whether these allegations were settled or if the Board had investigated them. The absence of oversight on potential whistleblower issues places a spotlight on the lack of governance and effective management within the firm.

Flawed Acquisition Oversight

The deposition also revealed critical oversights in the acquisition of Glen Oaks in 2021, which the Board allegedly did not formally approve prior to the announcement. Management informed the Board post-facto of the acquisition, raising flags over how decisions of this magnitude were evaluated. According to Smolyansky, such a failure represents a fundamental breakdown in Board oversight.

Selective Enforcement of Conduct Policies

Further complicating matters, McWhorter's deposition pointed to a selective enforcement of conduct policies within Lifeway. While a stringent review process was enforced on one individual, there was a glaring lack of investigation into similar behaviors from the CEO. This inconsistency undermines the truthfulness and integrity of corporate governance.

Conclusion: Demand for Change

Smolyansky concludes that the current leadership, epitomized by Dorri McWhorter, Jason Scher, and Julie Smolyansky, has continually failed to meet its governance obligations. Their lack of awareness regarding investor concerns, ineffective oversight of major transactions, and failure to provide meaningful governance threaten shareholder value. Smolyansky urges fellow shareholders to ensure change by withholding their votes for these directors in favor of a more competent and independent board leadership. Only through these measures can Lifeway Foods aim to restore its integrity and value in the market.

In light of these revelations, shareholders must consider the future of Lifeway with great scrutiny. The path forward lies in fostering an accountable and transparent governance structure that genuinely prioritizes shareholder interests. Thus, the call to VOTE WITHHOLD is not merely a formality, but a necessary step in preserving the integrity and success of Lifeway Foods, Inc.