Uncle Nearest Sued By Creditor That Claims the Whiskey Brand Owes It More Than $100 Million
Founder and CEO, Grant Sidney, Inc. and Uncle Nearest, Inc., Fawn Weaver speaking at the 2024 Forbes Power Women’s Summit at Jazz at Lincoln Center in New York, NY on September 11, 2024. (Photo: Efren Landaos/Sipa USA via AP Images)
On Friday, the Tullahoma News reported that Uncle Nearest and Nearest Green Distillery are facing a lawsuit from a Louisville, Kentucky-based creditor, Farm Credit Mid-America, PCA, which claims the company has defaulted (or stopped making payments) on over $100 million in loans.
Founded in 2016 by entrepreneur Fawn Weaver, Uncle Nearest is dedicated to Nathan “Nearest” Green, the unheralded enslaved man who was the first master distiller at the Jack Daniel Distillery. Since its formation, Uncle Nearest has grown at a remarkably rapid pace, quickly becoming a major name on the American whiskey market.
Weaver and her husband, Keith, have denied the lawsuit, saying it is “demonstrably false,” according to the Tullahoma News.
“This suit contains a host of inaccurate claims against the company such as the suggestion that we have not paid the bank in over a year, which is just not true,” Keith Weaver said, per the Tullahoma News. “They also suggest that we’re using or have used corporate resources for personal benefit in the form of the Martha’s Vineyard house, which is also not true.
“One of the things we take very seriously, because it’s a core principle of the company, is radical transparency. It’s also fundamental to who Keith and Fawn Weaver are personally.”
Details of the Lawsuit
The lawsuit claims that Uncle Nearest has been in default on its loans since as early as Jan. 2, 2024, has failed to pay principal and interest payments multiple times and used proceeds from the loan to purchase a Martha’s Vineyard home worth more than $2 million. It also claims the distillery sold barrels of whiskey — which, according to the Tullahoma News, make up “the majority of the lender’s collateral” — to make money to pay other parties but not the plaintiff.
The lawsuit further claims Uncle Nearest broke the terms of the loan by failing to maintain a net worth of at least $100 million in 2024 and sold “discounted future revenue streams for discounted rate,” some discounts of hundreds of thousands of dollars, per the Tullahoma News.
The creditor claims it attempted to reach out to Uncle Nearest from January 2024 through March 2025 but was not met with “much cooperation.”
The lawsuit identifies three types of loans the creditor claims it gave to Uncle Nearest:
- A “Revolving Loan” given in July 2022 for $35 million, which the creditor says it amended seven times at Uncle Nearest’s request, ultimately increasing it to $67 million. The lawsuit claims part of the loan was for Uncle Nearest to acquire a French chateau in order to develop a cognac business, but the creditor says it “has not received any information from Uncle Nearest that any portion of the cognac business is operational.”
- The “Initial Term Loan” of $20 million, given in July 2022. According to the lawsuit, the lender provided an additional term loan of $2.3 million in March 2023. The plaintiff claims Uncle Nearest requested this loan to “among other things,” purchase a Martha’s Vineyard home for $2.225 million. The lender says Uncle Nearest presented this purchase as a marketing opportunity, allowing the brand to host events and rent the property to other distributors. The lender claims, however, that in January of this year it learned that an entity called UN HOUSE MV LLC was used to purchase the property, which it claims violates the loan agreement. UN HOUSE MV LLC then allegedly mortgaged the property to a different lender, Oaktree Funding Corp. This property has been the subject of noise complaints. Finaly, the lender says it provided a $1.7 million term loan in June 2023 for the purchase of a 108-acre property adjecent to the distillery. The current principal balance of the Term Loans is $22,045,150.88, according to the lawsuit.
- The RELOC Loan: The creditor claims it provided a real estate line of credit for $15 million in January 2023 to finance the construction and expansion of the Nearest Green Facility.
Overall, the creditor says Uncle Nearest owes ita total of $108,245,828.22 as of July 28. It says the defaults and breach of loan documents has caused the lender to suffer damages “in an amount to be determined at trial.” The lender also seeks receivership:
“It is necessary that a receiver be appointed immediately to serve as a general receiver, with all powers and duties as specifically ordered by this Court,” the lawsuit reads. “The enhanced value and stabilization from a professional, court-appointed receiver outweighs any potential harm. Uncle Nearest will retain ownership and will be kept informed of the receiver’s work through regular reports. The marginal costs of a receiver pales in comparison to the tremendous loss of value of the Collateral if Uncle Nearest continues along the current path, which proves that Uncle Nearest cannot pay the Loans, its property-related expenses and its vendors.”
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