Uncle Nearest and CEO Fawn Weaver is reclaiming the headlines.
After a nearly year-long legal battle involving a Kentucky lender, the largest stakeholder in Uncle Nearest announced the company had filed for Chapter 11 bankruptcy on Tuesday (Mar. 17), while also announcing she and the other founders of the proud whiskey brand were suing Farm Credit for defamation, alleging the company was “circulating false accusations, including claims of missing inventory, financial misconduct, negative cash flow, and insolvency.”
By filing for Chapter 11, Weaver stated the receivership, which had become a much-debated issue in Uncle Nearest’s dispute with Farm Credit, had been dissolved.
“The accusations circulated about us were not only false. The bank knew they were false when they made them, and they knew those accusations would strike directly at the credibility that allowed this brand to grow against all odds in this industry,” Weaver said in a news release.
The receivership is looking to block the petition of bankrutpcy protection and is seeking $75,000 in damages and sactions against Weaver and/or her counsel for Weaver’s “wanton and willful violation of this Court’s order appointing the receiver.”
Weaver and the Uncle Nearest team established a webpage titled “Follow The Case,” which lists 23 updates and various court filings related to the case, ranging from the defamation lawsuit against Farm Credit, allegations about the Martha’s Vineyard property, testimonies from Weaver under oath, two motions to terminate the receivership and a lawsuit filed against the company’s former chief financial officer.
Per J. Richard Byrd, one of the counsel representing Uncle Nearest, the documents had long been made available to the public, giving transparency to the company’s battle with the receivership and Farm Credit.
“The follow the case link on the Fawn Weaver site is not new,” Byrd told theGrio. “It has been there for quite some time. It was created as a place for people to have the ability to look and read the filings and responses for themselves.”
The lawsuit from Uncle Nearest against Farm Credit stems from a dispute over the administration of a $102 million lending facility that the company utilized during a period of rapid expansion. Per the complaint, the lender is accused of circulating false accusations against Uncle Nearest, despite being in possession of documents that contradict those claims.
“False accusations can travel quickly, especially when they involve the founders of a nationally recognized brand,” James Williams, chief litigator at Chehardy Sherman Williams, who is leading the litigation with James L. Walker, Jr. as New York counsel, said in a statement. “But when accusations are contradicted by the very records already in the accuser’s possession, there must be accountability.”
In a video uploaded to Instagram, Weaver thanked supporters and customers who backed her and the award-winning whiskey brand, while saying Chapter 11 isn’t for the faint of heart, citing notable companies such as Delta, Nieman Marcus and Caesars Entertainment as companies that went through a restructuring under Chapter 11 and exited years later with stronger brand value and assets.
“As founder and CEO, the responsibility for addressing this and moving the company forward ultimately rests with me and me alone,” Weaver said. “I should have seen the sign sooner. I should have acted sooner. I wish I had, but I can’t go back and change the past.”
She added, “What I can do is make better decisions moving forward, beginning with making sure the story of Uncle Nearest is never again pulled away from what it should have always been about, the legacy of Nearest Green and his family, see the legacy that deserves the truth, a story far bigger than any of these headlines.”
As the company goes through Chapter 11, it will continue to pursue claims and counterclaims against its lender, while also having $13,188,927 in unsecured obligations. The loan at the center of the dispute with Farm Credit has a stated balance of approximately $102,521,326, according to court documents. In her video and in the news release, Weaver stated that those liabilities are dwarfed by Uncle Nearest’s estimated enterprise value at $529 million.
During the reorganization process, operations at the Nearest Green Distillery in Shelbyville, Tennesssee and national distribution of Uncle Nearest Premium Whiskey will continue as normal. Simultaneously, per Byrd, the reorg process puts a stay on all legal matters regarding Uncle Nearest until the court has properly reviewed all assets, debt and contracts.
