Black Woman-Owned Uncle Nearest Whiskey, Once Worth $1.1B, Could Now Be At Risk Of Bankruptcy
Uncle Nearest, a Black-owned Tennessee whiskey brand, may be heading towards bankruptcy as disputes persist over which assets fall under a federal receivership, according to recent court filings reviewed by the Lexington Herald-Leader.
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.
Lawusit against Uncle Nearest
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.
According to the Lexington Herald-Leader, additional law firms have also been brought in to review and possibly liquidate assets located in France and Massachusetts.
Farm Credit’s lawsuit has raised new questions about what should be included in the receivership. The court-appointed receiver has requested clarification on whether several other assets associated with the Weavers should be included. These assets include Uncle Nearest Real Estate Holdings LLC and Shelbyville Barrel House BBQ LLC. Humble Baron Inc.. Grant Sidney Inc.. Uncle Nearest Spurs VI. Quill and Cask Owner and more.
Other claims against Nearest Green Distillery
Farm Credit also accuses the whiskey brand of other misconduct, including inflating its inventory of whiskey barrels, which it had used as collateral for part of the loans; keeping a cash balance far below the $1.5 million required by the loan; and failing to maintain sufficient internal financial controls, as reported by The New York Times.
Farm Credit alleges that the defaults began in 2023. Still, they were willing to overlook them at the time and even extend the loans further, “in reliance upon Uncle Nearest’s representations as to its success and strategic growth.” It progressed with the request for a receiver, a neutral third party who will manage the company, though Uncle Nearest’s owners will not lose possession of their assets.
What is the Weaver’s response?
Fawn Weaver called the lawsuit “not only inaccurate” but “a flat-out lie used to smear my good reputation.” In a declaration filed with the court after the judge’s decision. In an Instagram video, Weaver said, “Don’t believe the fake news, some reports claim I no longer own Uncle Nearest and that I’m not running it.”
“Our team remains unshaken and unmoved. If that ever changes, you’ll hear that directly from me,” she adds.
Image: Fawn Weaver
