In a recent legal development, Lifeway Foods has filed a lawsuit against Edward and Ludmilla Smolyansky, the founding family members engaged in a public dispute over the establishment of a new company and allegations of a stolen formula. Lifeway Foods, a US-based kefir dairy business, accused the Smolyanskys of stealing proprietary information to set up a rival brand, Pure Culture Organics.
The legal filing by Lifeway Foods claims that Edward Smolyansky used knowledge obtained during his time as an executive at the company to steal proprietary formulations for kefir products, which were then used to establish Pure Culture Organics. The lawsuit also references a statement made by Edward Smolyansky in a press release during the Natural Products Expo West, where he discussed developing a new kefir formulation based on his father’s work at Lifeway Foods.
As the legal battle unfolds, Lifeway Foods is seeking damages for lost profits, damage to its intellectual property, and a halt to Pure Culture Organics’ advertising and sale of kefir products. The company is also demanding a jury trial to resolve the matter.
Furthermore, lawyers for Lifeway Foods discovered that Pure Culture Organics, Inc. was not registered as an entity in multiple databases, adding complexity to the case. The legal dispute marks another chapter in the ongoing family feud that has impacted the company in recent years.
In the past, there have been public disagreements within the Smolyansky family regarding the direction of Lifeway Foods. These conflicts led to requests for the removal of Julie Smolyansky as CEO, the pursuit of strategic alternatives, and ultimately, a reshuffling of the board. Despite these efforts to resolve internal conflicts, the company continues to face challenges related to family dynamics and business decisions.
Amidst the legal battle and internal strife, a Lifeway Foods shareholder has called for the company to explore a potential sale, highlighting the complexities and tensions within the organization. With dairy giant Danone owning a significant stake in Lifeway, the future of the company remains uncertain as it navigates through legal disputes and internal disagreements.