Black Woman-Owned Uncle Nearest Is Viable And Has “Significant Value,” Report Says
Uncle Nearest whisky company remains viable and should continue operating, according to the first quarterly report filed by a court-appointed receiver. “The Company has significant value and can be reorganized, as a going concern,” he wrote, emphasizing that a fire-sale liquidation is unnecessary.
The lawsuit against Uncle Nearest
The Black-owned brand was in dire straits, with disputes persisting over which assets fell under a federal receivership.
The development came from a lawsuit filed by lender Farm Credit Mid-America, which claims Uncle Nearest, Nearest Green Distillery, and its founders, Keith and Fawn Weaver, defaulted on more than $100 million in loans. Farm Credit Mid-America also alleges that Nearest Green Distillery overstated the value of its whiskey barrels that were used as collateral by at least $24 million.
USA District Judge Charles E. Atchley Jr. appointed Phillip G. Young J, a bankruptcy and business attorney, as receiver, authorizing him to take control of Uncle Nearest and its assets. Young hired turnaround firm Newpoint Advisors Corporation to assess the business’s financial health.
Young hired Newpoint Advisors Corp., a firm that specializes in distressed businesses, to serve as the financial consultant. Thoroughbred Spirits Group is handling operations as the operational consultant. Belcher, Sykes & Harrington is serving as counsel for alcoholic beverages, and Young’s own firm, Thompson Burton, is representing the receivership.
Other complications
Whilst the business is progressing, Young also highlights serious complications. Young said that an employee erased some financial records, and the shareholder ledger is currently incomplete, as noted by the Moore County Observer.
Farm Credit also accuses the whiskey brand of inflating its inventory of whiskey barrels, which it had used as collateral for part of the loans, and maintaining a cash balance far below the $1.5 million requirement. The company will sell non-income-producing assets, such as a cognac château, over the next quarter to raise liquidity.
Image: Steven Ferdman
