(Update 8/15: A Tennessee court has placed Uncle Nearest in receivership. A gag order is in effect, so you can expect to hear little to nothing publicly from either the whiskey brand or Farm Credit Mid-America. Judge Charles Atchley Jr. appointed a receiver to take control of Uncle Nearest, removing the Weavers from operational control — though they can remain involved in marketing to protect the brand’s reputation.)
“Mount up.”
That was Uncle Nearest CEO Fawn Weaver’s social media challenge in response to recent news claiming that the company had defaulted on (or stopped payment on) over $100 million in loans. It’s part of a quickly developing story that has gone extremely public this week.
Uncle Nearest has been positioned as a success story since its launch in 2017. An homage to Nathan “Nearest” Green, the man who taught Jack Daniel how to distill, the Tennessee whiskey distillery has garnered major awards, constructed an enviable visitor center and (seemingly) grown a multi-billion-dollar brand.
But earlier this week, Farm Credit Mid-America submitted a “Verified Complaint” against various Uncle Nearest holdings and associated individuals (including Weaver and her husband, Keith Weaver) for breach of loan agreements that tally up to over $108 million.
“The suit makes claims including that the borrowers bought an estate on Martha’s Vineyard for two million dollars and that they have sold futures on their business at a discounted price,” notes the initial news report from The Tullahoma News. “They also claim the defendants have sold off barrels of whiskey in order to pay off other debts, whiskey that it is claimed was being used as collateral. The plaintiff also maintains Uncle Nearest overestimated its value. The creditors want a receiver to be placed over the company to ensure they maintain solvency and to protect the credit association’s investment.”
How Fawn Weaver Built a Multi-Billion-Dollar Whiskey Brand in Just 7 Years
In her new book “Love & Whiskey,” the founder of Uncle Nearest talks about becoming a spirits conglomerate and correcting historyThose are pretty aggressive claims (you can go into them in great detail over at Distillery Trail’s blog). In turn, the Weavers have offered an aggressive defense. Keith Weaver went on record with The Tullahoma News to note that the company has experienced double-digit growth over the past year; he also said the suit was full of “inaccurate claims” and that the timing of the lawsuit felt “purposeful.”
Fawn Weaver, meanwhile, took to social media. On Instagram, she noted, “Dang…you’ve got to be doing something really big for people to spend their energy writing hit pieces.” She also mentioned the company had filed part one of a response to the lawsuit and that “Part Two is coming. And it’s going to be line by line. Regulators, mount up.” She also started a #ClearTheShelves campaign for distributors and partners to share their success stories with the brand. (We’ve reached out to Uncle Nearest for comment.)
The official legal response from Uncle Nearest suggests that a former CFO might be part of the issue.
“Plaintiff’s Motion claims that Defendants materially overstated their barrel inventory, resulting in an overstatement of collateral by approximately $21,000,000,” per their lawsuit response. “Plaintiff ignores that it was not the Defendants that made this overstatement but rather it was the Defendants’ former Chief Financial Officer (“CFO”), acting on his own, and who has now been terminated. Between 2022 and 2023, the former CFO represented to the Plaintiff that Uncle Nearest had 77,000 barrels of whiskey on hand and used this overstatement to secure a $24 million line of credit increase.”
A hearing on this lawsuit continues in federal court Thursday. Expect this story to be updated. In other words, mount up.
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