Uncle Nearest Saga Continues as Founder Fawn Weaver Fights to Delay Sale

A federal judge has given the lender and court-appointed receiver overseeing Uncle Nearest until Monday to respond to founder Fawn Weaver’s request to delay the sale of the whiskey company’s main assets while she appeals the decision that placed the business under a receivership, the Moore County Observer reported Friday.

In an order issued Thursday, U.S. District Judge Charles E. Atchley Jr. set a fast schedule for the two sides to submit their arguments. The order does not block the sale or decide whether Weaver’s request should be granted.

The dispute comes as receiver Phillip G. Young Jr. moves closer to a potential sale. In an Oct. 9 filing, Young said he was close to signing a purchase agreement for the company’s assets.

Weaver’s lawyers say the proposed deal could lead to most of the companies under Young’s control filing for Chapter 11 bankruptcy, with the sale then completed through bankruptcy court. Weaver wants the court to prevent a final sale until her appeal is resolved.

Atchley questioned why Weaver needed a decision so quickly, noting that six days passed between Young’s report that a deal was nearing completion and Weaver’s request for an emergency ruling.

“The Motion does not provide any other details that would suggest such an extraordinarily expedited ruling is necessary or appropriate,” the judge wrote, according to the Moore County Observer.

Under the schedule, Young and Farm Credit Mid-America must respond by 11 a.m. Central time Monday, Oct. 19. Weaver can submit a reply by 4 p.m. Wednesday, Oct. 21. The judge has not set a date for a hearing or a final decision.

Weaver is asking the court to prevent the receiver from completing a sale of substantially all the assets of Uncle Nearest Inc., Nearest Green Distillery Inc. and Uncle Nearest Real Estate Holdings LLC while her appeal moves forward.

Her request would still allow the receiver to negotiate with potential buyers, market the assets and seek court approval. It would also allow bankruptcy filings. The restriction she seeks would prevent the sale from being finalized before the appeal is decided.

According to Weaver’s court filings, three potential buyers have been in discussions, and bankruptcy lawyers have been preparing for a possible sale under Chapter 11. A previous prospective buyer did not complete a deal before an exclusive negotiation period expired.

The appeal centers on Atchley’s May 26 decision not to end the receivership. On Oct. 2, the Sixth Circuit Court of Appeals rejected Young’s attempt to have the appeal dismissed. That decision allows Weaver’s appeal to proceed, but it does not decide whether she should prevail.

Weaver’s opening brief is due Nov. 12, with opposing briefs due Dec. 11.

Weaver is also asking the court to remove Grant Sidney Inc. from the receivership. She says she is the company’s CEO and sole shareholder.

Grant Sidney is Uncle Nearest’s largest shareholder and is owed about $3.69 million by the whiskey company, according to the filing.

Weaver argues that the receiver’s September report suggests Grant Sidney is unlikely to hold significant assets belonging to Uncle Nearest’s estate. She says keeping the company in the receivership is unnecessary and that any remaining investigation could continue through subpoenas and requests for records.

As an alternative, she has asked the court to pause the receivership order as it applies to Grant Sidney while her appeal proceeds. The request would not end the receivership of Uncle Nearest itself.

The court has not yet ruled on that request.