Uncle Nearest Lawsuit, $108M Loan Default, Court-Ordered Receivership, and Is Bankruptcy Next for Fawn Weaver’s Whiskey Empire?

Farm Credit Mid-America filed a $108 million lawsuit against Uncle Nearest Inc., founders Fawn and Keith Weaver, and the Nearest Green Distillery on July 28, 2025, alleging loan defaults dating back to January 2024, inflated barrel inventory reports overstating collateral by $24 million, and misuse of loan funds including $2.3 million for a Martha’s Vineyard property. Judge Charles E. Atchley Jr. ordered receivership on August 14, 2025, removing operational control from the Weavers while appointing receiver Phillip G. Young Jr. to manage assets, assess bankruptcy risk, and evaluate liquidation of non-core assets including French cognac properties and the controversial Martha’s Vineyard home.

What Is the Uncle Nearest Lawsuit About?

The Uncle Nearest lawsuit centers on alleged breach of multiple loan agreements totaling over $108 million that Farm Credit Mid-America provided to Uncle Nearest between 2022 and 2023. The lender claims Uncle Nearest has been in default since as early as January 2024, with the company allegedly failing to pay principal and interest multiple times, selling whiskey barrels that served as loan collateral to pay other debts, and providing inaccurate barrel inventory reports that overstated values by approximately $24 million.

Farm Credit Mid-America filed the complaint in the U.S. District Court for the Eastern District of Tennessee (Case No. 4:25-cv-38) seeking immediate appointment of a receiver to protect its collateral and rights.

Who Is Suing Uncle Nearest and Why?

Farm Credit Mid-America, a Kentucky-based agricultural lending cooperative, is the plaintiff. The lender provided multiple credit facilities to Uncle Nearest starting in July 2022, including a $67 million revolving loan (with current principal balance of $65,224,031.96), a $20 million term loan, and a $15 million real estate line of credit to finance construction of the Nearest Green Distillery.

The lender alleges Uncle Nearest violated loan covenants by failing to maintain $1 in net income at the end of each calendar month and failing to maintain a net worth of at least $100 million during 2024.

What Are the Specific Loan Default Allegations?

Farm Credit Mid-America’s complaint details multiple alleged violations:

Barrel Inventory Fraud: The lawsuit claims Uncle Nearest secured loans by overstating barrel inventory values by $21 million to $24 million, then sold off these whiskey barrels—which were collateral for the loans—to pay off other debts rather than repaying the lender.

Unauthorized Asset Sales: The brand is accused of selling “discounted future revenue streams” without informing Farm Credit Mid-America, reducing the value of the lender’s collateral.

Martha’s Vineyard Property Violation: The lawsuit claims loan proceeds were used to purchase a $2.2 million home on Martha’s Vineyard through a separate LLC, UN House MV LLC, which then mortgaged the property to a different lender—Oaktree Funding Corp. for $1.7 million—violating the original loan agreements.

Cognac Business Concerns: One loan amendment allowed Uncle Nearest to acquire a chateau in France to develop a cognac business, but the lawsuit claims the lender has not received any information that any portion of the cognac business is operational.

Financial Covenant Breaches: The company allegedly failed to maintain minimum financial thresholds required by loan agreements, including net worth and monthly net income requirements.

What Is Receivership and Why Is Uncle Nearest in Receivership?

A receiver is a neutral third party appointed by the court to manage a business’s assets when financial or managerial problems threaten its survival. On August 14, 2025, Judge Atchley granted Farm Credit’s motion, determining that appointing a receiver was necessary to stabilize operations, safeguard assets, and restore creditor confidence.

Judge Atchley ruled that although defendants’ agreement with Farm Credit “technically allow for a receiver to be appointed,” the court found “appointing a receiver is necessary under the circumstances” despite concerns about brand damage and the fact that many issues were caused by unauthorized actions of Uncle Nearest’s former CFO, Mike Senzaki.

Phillip G. Young Jr. of Thompson Burton PLLC was appointed receiver on August 22, 2025, with authority to assume managerial control of Uncle Nearest operations, freeze bank accounts, and make decisions about asset liquidation.

Will Uncle Nearest Go Bankrupt?

Court filings show that receiver Phillip G. Young Jr. has hired turnaround firm Newpoint Advisors Corporation—a firm specializing in bankruptcy and corporate restructuring—to assess the business’s financial health, and Young now has the authority to initiate bankruptcy proceedings if necessary.

In court documents, the receiver wrote: “The receiver does not believe that a fire sale liquidation of the company (be that as part of this receivership or as part of a bankruptcy proceeding) is necessary or in the best interest of this company”, indicating Chapter 11 reorganization remains a possibility but Chapter 7 liquidation is not currently recommended.

Receiver’s October 2025 Report: Young’s report filed October 1, 2025, in U.S. District Court asserts that Uncle Nearest retains significant value and that a “fire-sale liquidation is unnecessary,” stating the company’s core business is robust enough to survive the upheaval.

Receiver Young reported on October 1, 2025, finding “no evidence of misappropriation, theft, [or] financial impropriety” by founders or staff, deeming emergence from receivership “very good” odds while securing $2.5 million in short-term funding.

However, significant challenges remain: A 13-week budget confirmed revenues cover expenses, but challenges persist including 12 layoffs, unpaid vendor bills, warehouse liens, missing pre-2024 records allegedly erased by a former employee, and potential excise and sales tax liabilities in Tennessee and New Jersey.

How Has Fawn Weaver Responded to the Lawsuit?

Fawn Weaver has mounted a vigorous public defense despite a court-imposed gag order. “Some reports claim I no longer own Uncle Nearest,” Weaver said in an Instagram Reel posted in August 2025. “Let me be clear: I built this company, I own this company, I run this company”.

In her initial response filed before the August 7, 2025 hearing, Weaver stated: “Defendants are reviewing Plaintiff’s submission and preparing for the August 7, 2025 hearing. However, given the multiple salacious and inaccurate allegations in both Plaintiff’s Complaint and Motion that casts Uncle Nearest in a negative light, Uncle Nearest submits this response addressing certain key claims to correct the record and provide critical missing context”.

On Social Media: Weaver reported growth metrics including 44% year-over-year growth in the DMV region, 38% in Ohio, 33% in Texas (50% in July alone), claiming Uncle Nearest is “the only independent whiskey brand in the top 50 and one of the few spirit brands seeing double-digit growth in revenue, volume, and velocity”.

Weaver launched “Operation Clear the Shelves,” urging consumers: “Go to your local store and literally buy every bottle of Uncle Nearest and Nearest Green. And when that store restocks, do it again. Let them know that any hurdles we face, we’ll be jumping over them together”.

Blaming Former CFO: In legal filings, Fawn Weaver stated under oath that former CFO Mike Senzaki was the sole point of contact for reporting whiskey barrel inventory levels and that she and other executives were unaware of the inflated numbers. The company claims it launched an internal investigation and is considering legal action against Senzaki, who was fired in 2024.

What Is the Timeline of Events Leading to Receivership?

July 2022: Farm Credit Mid-America provides initial $35 million revolving credit facility, later expanded seven times to $67 million.

March 2023: Lender provides additional $2.3 million for Uncle Nearest to purchase Martha’s Vineyard property, presented as a marketing opportunity to host branding events and rent to distributors for co-branding.

July 2023: Credit facility amended to allow Uncle Nearest to acquire property in France for cognac business expansion.

January 2024: Farm Credit claims Uncle Nearest enters default status, beginning an 18-month period of ongoing defaults.

January 2025: Farm Credit discovers the Martha’s Vineyard property was purchased through separate entity UN House MV LLC and mortgaged to another lender, violating loan terms.

May 2024: Farm Credit sends first notice of default.

November 2024: Farm Credit sends additional default notice, indicating readiness to exercise rights including seeking receiver appointment.

April 2025: Parties execute forbearance agreement requiring Uncle Nearest to maintain $1.5 million cash on hand, submit regular cash flow budgets, and make $7 million mandatory payment.

May 12, 2025: According to Farm Credit filings, Uncle Nearest’s interim CFO showed minimum $1.5 million balance, but the actual balance was closer to $261,000, with forecasts showing the distillery would lose over $557,000 by week’s end.

July 22, 2025: Uncle Nearest allegedly fails to pay revolving loans in full on maturity date.

July 28, 2025: Farm Credit Mid-America files $108 million lawsuit in U.S. District Court for Eastern District of Tennessee.

August 3, 2025: Uncle Nearest files response rejecting many allegations and calling them “salacious and inaccurate,” claiming a receiver should not be appointed because the lender was fully informed of circumstances surrounding the alleged default and was actively working with the company on resolution.

August 7, 2025: Court hearing held; Keith Weaver testifies, not disputing that Uncle Nearest had defaulted on loans but suggesting payment issues were temporary.

August 11, 2025: Federal judge issues gag order barring Fawn Weaver from making public statements about the case without court permission.

August 14, 2025: Judge Charles E. Atchley Jr. grants receivership, ordering appointment of neutral receiver.

August 22, 2025: Phillip G. Young Jr. of Thompson Burton PLLC formally appointed as receiver.

September 12, 2025: Receiver files motion asking for “clarification” regarding assets “somewhat related to Uncle Nearest Inc.” after investigation revealed numerous entities and assets potentially falling under receivership, including the Weavers’ 2023 French cognac distillery purchase and Martha’s Vineyard house.

September 25, 2025: Farm Credit files motion supporting receiver’s request to expand receivership to include at least 11 additional entities controlled by Fawn and Keith Weaver, arguing the businesses engaged in extensive financial “co-mingling”.

October 1, 2025: Receiver Young files first report stating Uncle Nearest retains significant value, that fire-sale liquidation is unnecessary, finding no evidence of theft or misappropriation by founders or staff, and deeming emergence from receivership prospects “very good”.

October 24, 2025: Fawn Weaver attends Inc. 5000 Conference, claiming Farm Credit “didn’t have security over any of our collateral” and that the company has evidence proving her statements.

What Evidence Has Been Presented in the Lawsuit?

Financial Documents: Farm Credit presented loan agreements, amendments, forbearance agreements, and financial reporting showing loan balances exceeding $108 million.

Barrel Inventory Discrepancies: Documentation allegedly showing $21-$24 million overstatement in whiskey barrel valuations used as loan collateral.

Property Records: Evidence that UN House MV LLC (not a loan party) purchased the Martha’s Vineyard property using loan proceeds, then mortgaged it to Oaktree Funding Corp., violating credit agreement terms.

Cash Flow Analysis: Farm Credit presented May 2025 cash flow forecasts showing Uncle Nearest held only $261,000 versus required $1.5 million minimum, with projections showing need for immediate $1,796,000 injection plus weekly $500,000 injections to remain solvent.

Barrel Sales Documentation: Evidence that Uncle Nearest sold whiskey barrels serving as collateral to pay other creditors rather than Farm Credit.

Communication Records: Months of correspondence between Farm Credit and Uncle Nearest regarding default notices, information requests, and restructuring attempts.

Uncle Nearest’s Defense and Counterclaims

Former CFO Fraud Claims: Uncle Nearest maintains its former CFO Mike Senzaki was the sole point of contact for barrel inventory reporting, that executives were unaware of inflated numbers, and the company launched an internal investigation with potential legal action against Senzaki.

Lender Awareness Defense: Uncle Nearest claims Farm Credit was fully informed of circumstances surrounding the alleged default and was actively working with the company on resolution, arguing “Plaintiff was fully informed and aware of the circumstances that led to the technical default and was working side-by-side with defendants to find a resolution”.

Martha’s Vineyard Transparency: Uncle Nearest attorney wrote: “[Farm Credit Mid-America] and its employees and agents were actively involved in — and frankly acquiesced to — the exact circumstances that it is now claiming somehow support a receivership”. The company maintains Farm Credit was aware of the property purchase and that Farm Credit executives attended an event at the home in 2023.

Payment History: Uncle Nearest owes more than $108 million but has already paid $16.5 million toward its debt in the past 18 months according to court filings. Once mutual agreement on restructuring was reached in 2025, Uncle Nearest paid $7.5 million immediately.

Collateral Security: Uncle Nearest argued “collateral is not in imminent danger of being lost, concealed, injured, diminished in value, or squandered absent a receiver”.

What Is the Current Status of the Uncle Nearest Receivership?

Receiver Phillip G. Young Jr. has moved aggressively to stabilize operations since August 2025 appointment. His efforts have included cutting costs, eliminating 12 staff positions, securing the company’s bank accounts, resuming stalled shipments, and rebuilding relationships with distributors and investors.

Asset Liquidation Plans: Young is evaluating non-income-producing properties owned by Uncle Nearest, specifically estates in Cognac France, Martha’s Vineyard Massachusetts, and Bedford County Tennessee. While acknowledging all properties have potential to produce future revenue, given current cash position, he is considering which could be liquidated to satisfy existing debt.

Cognac Business: Uncle Nearest revealed plans to expand into Cognac in October 2023, acquiring Domaine Saint Martin with more than 100 acres of vineyard along the Charente River. Receiver traveled to Cognac to assess assets including intellectual property for the new brand, believing it would cost additional $15-$25 million to launch the brand. As Uncle Nearest “lacks the ability to make that investment at this time,” he advised these assets should be liquidated, with one offer and two inquiries already received.

Vodka Business Evaluation: Young is also evaluating sale of an unnamed vodka business. Uncle Nearest acquired Square One Organic Spirits in May 2024, marking its first move into vodka.

Timeline: Receiver believes his goals can be achieved by end of first quarter 2026.

Operational Challenges: Receiver acknowledged cash flow was among greatest early obstacles but noted shipping has resumed and investor interest is building. However, some financial records were erased by a former employee, and the shareholder ledger is currently incomplete.

What Do Legal and Financial Experts Say About the Case?

Kevin McGee, veteran beverage-alcohol attorney following the case, stated: “It’s not unusual for [receivers] to be looking at filing lawsuits if assets of the company were redirected or used for non-company purposes by officers and executives. The discovery also validates the lender’s earlier concerns about inability to get an org chart and other financial details over the course of months of restructuring negotiations and the need for a receiver”.

Industry Context: The wider context for American whiskeys and global spirits industry has been troubled. In April 2025, Oregon’s Westward Whiskey filed for Chapter 11 bankruptcy protection—a measure Uncle Nearest had also reportedly considered. Stoli Brand Vodka’s US arm which owns Kentucky Owl also filed for Chapter 11 in late 2024. Brown-Forman which owns Jack Daniel’s announced in January 2025 it would axe 12% of its workforce.

Uncle Nearest is not the only distillery in financial turmoil. Since January 2025, three major distilleries have hired turnaround firms according to International Business Times: LMD Holdings parent of Luca Mariano Distillery, Garrard County Distilling, and Stoli Group owner of Kentucky Owl.

What Are Uncle Nearest’s Other Legal Problems?

Beyond the Farm Credit lawsuit, Uncle Nearest faces multiple additional legal actions:

Garcelle Menos Lawsuit: Federal sex discrimination, harassment, and retaliation lawsuit against Fawn Weaver and Uncle Nearest.

Billups Inc. Lawsuit: Oregon-based advertising company filed lawsuit against Uncle Nearest Inc., complaint filed May 15, 2025, in U.S. District Court District of Oregon Portland Division (Case No. 3:25-cv-00823) alleging breach of contract and unjust enrichment.

Pratt Converting Division Lawsuit: Pratt Converting Division Nashville LLC sued Uncle Nearest LLC with hearing held August 13, 2025.

Berlin Packaging Judgment: Berlin Packaging won a $2.1 million judgment against Uncle Nearest in July 2025.

What Are the Potential Outcomes for Uncle Nearest?

Successful Restructuring: Receiver Young reported “very good” odds of emergence from receivership, securing $2.5 million in short-term funding with 13-week budget confirming revenues cover expenses. To refinance or sell by Q1 2026, Young targets non-core disposals within three months.

Chapter 11 Bankruptcy Reorganization: Receiver wrote: “The receiver does not believe that a fire sale liquidation of the company (be that as part of this receivership or as part of a bankruptcy proceeding) is necessary or in the best interest of this company”, indicating Chapter 11 reorganization remains an option if restructuring under receivership fails.

Asset Sales and Liquidation: Non-income-producing assets including Cognac estates, Martha’s Vineyard property, Bedford County Tennessee property, and vodka business Square One Organic Spirits could be sold to satisfy debt.

Foreclosure: Farm Credit Mid-America could potentially foreclose on the 458-acre Nearest Green Distillery in Shelbyville Tennessee and adjacent real estate if debt cannot be satisfied through other means.

Settlement: Parties could reach negotiated settlement allowing Weavers to maintain some role while satisfying lender’s claims, though no settlement discussions have been publicly reported.

What Are the Broader Business and Legal Implications?

Spirits Industry Downturn: Speculation about downturn of the $9 billion spirits industry includes changing tastes of Gen Z and rising tariffs on imports and exports drastically changing the spirits landscape.

Valuation vs. Cash Reality: The case raises questions about how a company valued at over $1.1 billion can struggle to pay bills, highlighting that valuation doesn’t translate to cash in the bank.

Black-Owned Business Impact: Uncle Nearest gained prominence as one of the most successful Black-owned whiskey brands, and the receivership raises questions about access to capital and support for minority-owned businesses in the spirits industry.

Founder Control vs. Lender Rights: The case demonstrates how lenders can obtain extraordinary remedies including receivership even when founders dispute the severity of defaults.

Martha’s Vineyard Property Issues: The property “riled up neighbors and spurred bylaws that put limits on large events,” with Ebony Magazine partnering with Uncle Nearest to hold gospel brunch for 400 attendees on August 10, 2025.

What Happens Next in the Uncle Nearest Case?

Asset Liquidation Decisions: Receiver will finalize which non-core assets to sell, likely within next three months, with offers already received for Cognac properties.

Expanded Receivership Ruling: Court must rule on Farm Credit’s September 25, 2025 motion to expand receivership to include 11 additional entities allegedly controlled by the Weavers.

Q1 2026 Target: Receiver believes his goals can be achieved by end of first quarter 2026, indicating potential refinancing, sale, or bankruptcy decision within that timeframe.

Investor and Creditor Negotiations: Fawn Weaver told investors in email obtained by Forbes that more than 160 backers offered to buy the loan outright, but Farm Credit “never came to the table”, suggesting potential for third-party acquisition or debt purchase.

Chapter 11 Filing Decision: If receivership cannot achieve successful restructuring, receiver has authority to initiate Chapter 11 bankruptcy proceedings.

Potential Litigation: Receiver may file lawsuits “if assets of the company were redirected or used for non-company purposes by officers and executives”, potentially targeting the Weavers or former CFO Mike Senzaki.

Related Legal Resources

For more information on receivership, bankruptcy, and business litigation:

• Class action lawsuit settlements and business litigation
• Corporate bankruptcy and restructuring cases
• Business loan default and breach of contract cases

Frequently Asked Questions About Uncle Nearest Lawsuit

What is the Uncle Nearest lawsuit about? 

The Uncle Nearest lawsuit is a $108 million breach of contract case filed by lender Farm Credit Mid-America on July 28, 2025, alleging Uncle Nearest Inc. and founders Fawn and Keith Weaver defaulted on multiple loans, inflated barrel inventory values by $24 million, sold loan collateral to pay other debts, and misused $2.3 million in loan proceeds to purchase a Martha’s Vineyard property through an unauthorized entity.

Why is Uncle Nearest in receivership?

 Judge Charles E. Atchley Jr. ordered receivership on August 14, 2025, after determining Uncle Nearest’s loan defaults, financial reporting issues, and questionable asset transactions created sufficient risk to Farm Credit Mid-America’s $108 million in collateral that a neutral third party was necessary to stabilize operations and protect the lender’s interests.

Will Uncle Nearest go bankrupt? 

Receiver Phillip G. Young Jr. hired bankruptcy restructuring firm Newpoint Advisors and has authority to initiate Chapter 11 bankruptcy proceedings if necessary. However, his October 1, 2025 report stated Uncle Nearest retains significant value with “very good” odds of emerging from receivership successfully, though he acknowledged bankruptcy remains an option if restructuring fails.

How has Fawn Weaver responded to the Uncle Nearest lawsuit? 

Fawn Weaver called the allegations “salacious and inaccurate” in court filings, blamed former CFO Mike Senzaki for barrel inventory misreporting, claimed Farm Credit was fully aware of circumstances including the Martha’s Vineyard property purchase, launched “Operation Clear the Shelves” urging consumers to buy Uncle Nearest products, and stated on Instagram “I built this company, I own this company, I run this company” despite the court-ordered receivership.

How much does Uncle Nearest owe Farm Credit Mid-America? 

Uncle Nearest allegedly owes more than $108 million across multiple credit facilities including a $67 million revolving loan (current principal balance $65,224,031.96), a $20 million term loan, a $15 million real estate line of credit, and various smaller loans including $2.3 million for the Martha’s Vineyard property. The company has paid $16.5 million toward the debt over the past 18 months.

What court is handling the Uncle Nearest case? 

The case is being heard in the U.S. District Court for the Eastern District of Tennessee under Case No. 4:25-cv-38, with Judge Charles E. Atchley Jr. presiding. The complaint was filed July 28, 2025, and receivership was ordered August 14, 2025.

What happens next in the Uncle Nearest receivership? 

Receiver Phillip G. Young Jr. is evaluating liquidation of non-core assets including the Cognac distillery in France, Martha’s Vineyard property, Bedford County Tennessee property, and vodka business Square One Organic Spirits. He aims to complete restructuring or refinancing by end of Q1 2026, with Chapter 11 bankruptcy remaining an option if those efforts fail.

Disclaimer: This article provides factual information about the Uncle Nearest lawsuit and receivership based on publicly available court documents and news reports. It is for educational purposes only and does not constitute legal or financial advice. Case details are based on allegations and court filings, which may not represent final determinations. The receiver’s October 2025 report found no evidence of misappropriation by founders or staff, and Uncle Nearest maintains many of the lender’s claims are inaccurate. For legal advice regarding your specific situation, please consult with a qualified attorney.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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