EDWARD SMOLYANSKY, A LIFEWAY SHAREHOLDER, RELEASES KEY DEPOSITION INSIGHTS, CALLS FOR WITHHOLD VOTE ON LEGACY DIRECTORS DORRI McWHORTER, JULIE SMOLYANSKY, AND JASON SCHER
Rhea-AI Summary
Positive
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Negative
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Key Figures
Market Reality Check
Peers on Argus 1 Up
LWAY was up 0.7% pre-news, while key packaged foods peers were mixed: WEST up 2.67%, OTLY down 0.77%, USNA down 0.29%, MAMA down 0.6%, SENEA down 1.14%. This points to stock-specific factors rather than a broad sector move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Dec 11 | Governance campaign update | Neutral | -0.9% | Shareholder nominee updated campaign, urging withhold votes on legacy directors. |
| Dec 05 | Definitive proxy filing | Neutral | -0.7% | Edward Smolyansky filed definitive proxy seeking further board changes at Lifeway. |
| Dec 03 | Brand recognition award | Positive | -0.6% | Lifeway named to Inc.’s 2025 Best in Business list as a Challenger Brand. |
| Dec 03 | Governance criticism letter | Neutral | -0.6% | Shareholder letter alleged misleading and false public statements by the company. |
| Dec 02 | Company response to dissidents | Neutral | -1.1% | Lifeway letter opposed dissident nominees, citing disqualifying records and ethics issues. |
Recent LWAY headlines, including both positive recognition and contested-governance communications, were followed by small negative moves, with no clear pattern of strong positive reactions.
Over the last weeks, Lifeway’s news flow has been dominated by a contested proxy and governance dispute. Multiple communications from Edward Smolyansky and the company addressed board composition, governance practices, and alleged misleading statements. A notable contrast was the Dec 3, 2025 recognition on Inc.’s 2025 Best in Business list, a positive brand and execution signal that still coincided with a -0.59% move. Today’s governance-focused release fits into this ongoing control and oversight battle around the 2025 Annual Meeting.
Regulatory & Risk Context
An active Form S-3 resale shelf filed on 2025-10-29 covers up to 3,454,756 existing shares held by Danone North America PBC and affiliates. Lifeway states it will not receive proceeds, but the shelf enables the selling stockholder to dispose of shares more flexibly over time, potentially affecting trading dynamics if used at scale.
Market Pulse Summary
This announcement centers on deposition-based governance allegations and a call to withhold votes from three legacy directors, deepening Lifeway’s ongoing proxy contest. It follows weeks of filings and letters from both the company and the Smolyansky group. Investors tracking this situation may focus on upcoming 2025 Annual Meeting materials, board and committee structures, and how governance debates intersect with previously reported operating momentum and the Cooperation Agreement with Danone.
Key Terms
whistleblower regulatory
annual meeting regulatory
proxy statement regulatory
AI-generated analysis. Not financial advice.
The following summary draws solely from Ms. McWhorter's sworn deposition testimony and highlights why shareholders should WITHHOLD votes from the three legacy directors at the upcoming Annual Meeting.
1. Fundamental Lack of Awareness of Investor Discontent
Perhaps the most alarming disclosure is Ms. McWhorter's admission that she was unaware of the 2023 investor campaign
- She had not reviewed the widely circulated 2023 activist letter by KWM blasting the CEO and Board for governance failures.
- She had no recollection of the accompanying press release by Lifeway, initially reading it during the deposition.
- She could not recall any Board discussion about the concerns raised by Lifeway's largest long-term shareholders.
- She was unfamiliar with shareholder allegations regarding board accountability, disclosure failures, and compliance with the 2021 Settlement Agreement.
The failure to stay abreast of shareholder concerns, in our opinion, raises significant red flags about her ability to act as a fiduciary for all shareholders.
2. Lack of Awareness of Whistleblower Claims and Key Governance Risks
Next, Ms. McWhorter confirmed that she:
- Did not know whether Lifeway's then-CFO made Sarbanes-Oxley whistleblower allegations.
- Did not know whether those allegations were settled.
- Did not know whether the Board investigated or even discussed them.
These are not minor administrative details. Whistleblower activity involving the CFO — the executive responsible for financial reporting, controls, and investor disclosures — is a material governance event.
A Board Chair who is unaware of whistleblower allegations inside the finance function is not exercising effective oversight.
3. Improper Oversight of the failed 2021 Glen Oaks Acquisition
Ms. McWhorter testified that:
- The Board did not approve the 2021 acquisition of Glen Oaks prior to announcement of the deal
- Management informed the Board only after signing the agreement;
- No Board meeting occurred to authorize the purchase;
- The Delegation of Authority was changed only after the fact.
Shareholders rely on the Board to review and supervise major corporate transactions. Ms. McWhorter's testimony suggests the Board learned about a multimillion-dollar acquisition only after it was completed.
Once again, Ms. McWhorter and legacy directors, including Jason Scher, failed to provide needed oversight and failed to act as true fiduciary for all shareholders.
4. Selective Enforcement of Conduct Policies and Breakdown of Oversight Integrity
Despite being unaware of major governance issues involving the CEO, Ms. McWhorter testified that the Board relied heavily on a single email from 2018 to terminate then-COO and director Edward Smolyansky in 2022.
Under oath she agreed:
- The code of conduct applies equally to all officers, including the CEO.
- Threatening language warrants immediate discipline or termination.
- If the CEO sent similar communications, the same rules would apply.
Yet she also testified that she:
- Was unaware of whether the CEO ever sent comparable messages.
- Could not recall whether the Board investigated whether the CEO engaged in such conduct.
- Was unaware of evidence contradicting the Board's selective enforcement.
In short, the Board aggressively scrutinized one officer while failing to investigate whether the same standards applied to the CEO. That is not oversight — it is entrenchment.
Conclusion: Lifeway's legacy directors including Dorri McWhorter, Julie Smolyansky, and Jason Scher have failed to provide oversight and to meet their fiduciary obligations to all shareholders.
Across every category of governance — oversight of management, engagement with shareholders, enforcement of policies, response to whistleblower issues, M&A supervision, compliance with agreements, and adherence to corporate procedures — Ms. McWhorter's testimony highlights a Board that:
- Failed in its obligations to stay engaged about shareholder concerns,
- Failed in its obligations to maintain independence,
- Lacked awareness of robust corporate governance practices, and
- Failed to provide meaningful oversight.
These failures threaten shareholder value and undermine the integrity of Lifeway's governance.
For Lifeway to move forward, shareholders must demand competent, informed, independent board leadership.
We therefore urge all shareholders to VOTE WITHHOLD on Dorri McWhorter, Julie Smolyansky, and Jason Scher.
And vote FOR election of Edward Smolyansky and George Sent on the GREEN proxy card.
Thank you for your support and commitment to restoring Lifeway's value.
Edward Smolyansky
Key Shareholder, Shareholder Nominee for the Board of Directors
For More Information visit my Linkedin profile www.linkedin.com/in/edward-smolyansky-a2293627a
Important Information
This communication is not a request for a proxy to vote on any matter. Any written solicitation of a proxy by Mr. Smolyansky will be made through the definitive proxy statement (the "Shareholder Proxy Statement"). Lifeway shareholders are urged to read the Shareholder Proxy Statement, including any amendments or supplements thereto, and any other soliciting materials, when they become available as they will contain important information. Shareholders may obtain, free of charge, copies of the Shareholder Proxy Statement at sec.gov.
Participants in the Solicitation
Mr. Smolyansky has notified the Company of his intent to nominate himself and George Sent for election as directors of Lifeway at the 2025 Annual Meeting. Each of them may be deemed to be a participant in any solicitation of proxies by Mr. Smolyansky. Lifeway shareholders can find information regarding Mr. Smolyansky and Mr. Sent, and their respective direct or indirect interests, by security holdings or otherwise, in the Shareholder Proxy Statement and in Mr. Smolyansky's other filings with the SEC, all of which information is incorporated herein by reference.
Contact: Edward Smolyansky, esmolyansky79@icloud.com
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SOURCE Edward and Ludmila Smolyansky
