Distillery Founders Challenge Court Move to Expand Receivership

The founders of Nearest Green Distillery, Fawn and Keith Weaver, are opposing a motion that seeks to expand receivership over their businesses. This legal action follows the distillery’s financial troubles, leading to court intervention. Presently, the distillery and its associated whiskey brand, Uncle Nearest, have been under a receiver since September due to a loan default amounting to over $108 million owed to Kentucky lender Farm Credit.

Background on the Distillery’s Financial Situation

The Nearest Green Distillery has encountered significant challenges amid a downturn in the spirits market. This decline includes reduced domestic consumption and a decrease in exports, influenced by recent trade disputes. The distillery’s financial turmoil prompted Farm Credit to petition the court, resulting in the removal of the Weavers from operational control.

Expansion of Receivership

Receiver Phillip Young has requested U.S. District Judge Charles Atchley Jr. to ascertain if additional entities tied to the distillery should also fall under receivership. The lender, Farm Credit, advocates for this expansion, suggesting certain businesses have finances intermingled with those of the distillery.

Weavers’ Response

In a court filing, the Weavers contended that the ten businesses involved are distinct and should not be included in the receivership. They maintain that their withdrawal from operational control would unjustly strip them of financial interests. The Weavers assert that Uncle Nearest is not insolvent and possesses assets sufficient to manage its debt independently.

Allegations of Harmful Accusations

The court documents filed by the Weavers highlight how Farm Credit’s allegations have inflicted severe damage to their businesses. These accusations have reportedly led vendors to sever ties and customers to halt orders. The Weavers criticized these claims as baseless and intended to harm both their businesses and personal reputations.

Claims of Fraud

Furthermore, the Weavers allege they are victims of fraud by a former employee, suggesting that Farm Credit might hold some liability due to a suspected connection between one of its loan officers and the distillery’s former financial officer.

Entities in Question for Receivership

• Humble Baron Inc. – Operates the long-certified Humble Baron Bar.
• Grant Sidney Inc. – The largest shareholder of Uncle Nearest, owning approximately 40%.
• 4 Front Street. – Limited liability corporation with Keith Weaver as a minority stakeholder.
• Weaver Interwoven Family Foundation. – A proposed charitable foundation by the Weavers.
• Quill and Cask Owner LLC. – Engaged in buying and selling assets for profit.
• Shelbyville Barrel House BBQ LLC. – A walk-up BBQ restaurant located at the distillery.
• Classic Hops Brewing Co. – An emerging beer brand with no ties to Uncle Nearest.
• Nashwood Inc. – Focuses on hospitality and real estate, owned entirely by Keith Weaver.
• Shelbyville Grand LLC. – Manages real estate and storage related to the distillery.
• Uncle Nearest Spurs VI LLC. – A Delaware corporation created without any current operations.

The court’s decision on the receivership expansion remains pending. The Weavers continue to defend their interests vigorously and maintain the assertion that their businesses operate independently of the distressed distillery.