Uncle Nearest Is Insolvent, Receiver’s Explosive Affidavit Claims

Editor’s Note: This story is developing and will be updated when all parties file affidavits or more information becomes available.

Uncle Nearest is insolvent and owes millions of dollars to external parties, including WhistlePig, American Spirits, and other vendors, the company’s receiver claims in an affidavit filed Monday night. The filing comes one week ahead of the hearing that will determine whether the whiskey brand’s receivership status will be reversed.

On Sunday, a judge denied requests from both Uncle Nearest and its lender to seal documents related to the ongoing case, opening access to company books, including bank statements and other financial records, to the public.

Receiver Philip Young predicts Uncle Nearest’s lender, Farm Credit Mid-America, will foreclose upon the company if ownership is handed back to its founders Fawn and Keith Weaver at the hearing. If the Weaver duo regains control, Young claims, the company’s losses will average $2 million a month — which Farm Credit would have to cover.

“Based upon my conversations with counsel for Farm Credit, I believe that Farm Credit would immediately cease covering these operational losses and move to foreclose on and repossess its collateral upon the expiration of this receivership,” the affidavit says.

The defendants’ court-filed affidavit is due on or before Thursday, Feb. 5, but Fawn Weaver already shared some of her thoughts in an internal email sent to investors and employees shortly after Young filed his statement.

The bulk of Weaver’s email, obtained by the Lexington Herald Leader, focuses on transactions that shuffled $20 million between Uncle Nearest and Grant Sidney, an investment company also owned by Weaver. Young mentioned the questionable transactions in his filing, though he noted there is currently no evidence to support claims that they were part of personal financial gains.

“I want to be absolutely clear,” Weaver writes in the email defending herself, “neither Keith nor I have ever personally gained anything monetarily from Uncle Nearest.”

Young’s filing comes after Farm Credit requested an expansion of receivership. In September, the lender filed a motion to connect additional entities that overlap with Uncle Nearest, Inc. under receivership, but the presiding judge said more information was required to make a decision. In his affidavit, the receiver claims the transaction will become clear if Grant Sidney is included in the receivership.

Other updates in the ongoing legal battle over Uncle Nearest ownership include the Weavers’ lawsuit against the company’s former CFO Michael Senzaki for fraud and breach of fiduciary duty, among four other counts, during his tenure. The Weavers claim Senzaki’s alleged misconduct led the company to its present murky financial situation.

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