Uncle Nearest Files Chapter 11 While Suing Lender Over ‘Smear Campaign’
Uncle Nearest and CEO Fawn Weaver are once again at the center of national headlines as the award winning whiskey brand navigates both bankruptcy proceedings and an intensifying legal fight.
After nearly a year long dispute with a Kentucky based lender, the company filed for Chapter 11 bankruptcy on Tuesday, March 17. At the same time, Weaver and the company’s founders filed a lawsuit against Farm Credit Mid America, accusing the lender of defamation and what they describe as a coordinated smear campaign.
According to the complaint, the lender knowingly circulated false accusations, including claims of missing inventory, financial misconduct, negative cash flow, and insolvency.
“The accusations circulated about us were not only false. The bank knew they were false when they made them, and they knew those accusations would strike directly at the credibility that allowed this brand to grow against all odds in this industry,” Weaver said in a news release.
Lawsuit Targets Lender’s Conduct
The lawsuit, filed in the Supreme Court of the State of New York, alleges the accusations were made to protect the lender’s own bankers and deflect scrutiny from failures in administering a $102 million credit facility that fueled the company’s rapid expansion.
Uncle Nearest claims Farm Credit continued to push those claims despite possessing documentation that contradicted them, and that the accusations were later repeated by national and industry media outlets.
“False accusations can travel quickly, especially when they involve the founders of a nationally recognized brand,” said James Williams, chief litigator at Chehardy Sherman Williams. “But when accusations are contradicted by the very records already in the accuser’s possession, there must be accountability.”
Receiver Moves To Block Bankruptcy Filing
The legal dispute has now expanded into bankruptcy court, where a new challenge has emerged.
A court appointed receiver for Uncle Nearest, Phillip G. Young, has asked a bankruptcy judge to dismiss the Chapter 11 filing submitted by founders Fawn and Keith Weaver, arguing they did not have the authority to initiate the proceedings.
In a filing Wednesday in the U.S. Bankruptcy Court for the Eastern District of Tennessee, Young pointed to a prior federal court order issued last summer that granted him broad authority to exercise exclusive control over the company’s assets and operations.
Young filed the motion to dismiss just one day after the bankruptcy petition was submitted. A hearing on the motion is expected as the dispute continues to unfold.
Meanwhile, Weaver stated that the Chapter 11 filing dissolves the receivership, a claim now being contested in court. The receiver is also seeking $75,000 in damages and sanctions, alleging a violation of court orders.
Transparency Push And Public Response
In a video posted to Instagram, Weaver addressed supporters directly, emphasizing transparency and directing the public to a “Follow The Case” webpage that includes more than 20 updates, court filings, and testimonies tied to the dispute.
Attorney J. Richard Byrd said the materials have long been publicly available and were compiled to give supporters and observers the ability to review the facts independently.
Weaver also acknowledged her role in the situation.
“As founder and CEO, the responsibility for addressing this and moving the company forward ultimately rests with me and me alone,” she said. “I should have seen the sign sooner. I should have acted sooner.”
Financial Stakes And Company Value
Court documents show the company holds approximately $13.1 million in unsecured obligations, while the loan at the center of the dispute carries a balance of more than $102.5 million.
Weaver has argued those liabilities are outweighed by the company’s estimated enterprise value of $529 million, pointing to other major companies that have used Chapter 11 restructuring to recover and grow stronger.
Despite the bankruptcy filing, operations will continue uninterrupted. The Nearest Green Distillery in Shelbyville, Tennessee will remain open, and national distribution of Uncle Nearest Premium Whiskey will proceed as usual.
The reorganization process places a temporary hold on legal matters while the court reviews the company’s financial structure, assets, and obligations.
A Brand Built On Legacy And Growth
Prior to the dispute, Uncle Nearest had become one of the fastest growing American whiskey brands in the country, reaching the Top 20 super premium American whiskey brands in Nielsen rankings within five years.
The Nearest Green Distillery has grown into a global destination, ranking as the seventh most visited distillery in the world out of roughly 4,000. It welcomes more than 200,000 visitors annually and ranks No. 1 worldwide across platforms like Google, Yelp, and TripAdvisor.
The brand has also earned distinction as the most awarded bourbon and American whiskey in the world for seven consecutive years.
Weaver said the focus now is ensuring the brand’s story remains centered on its foundation.
“What I can do is make better decisions moving forward,” she said, “beginning with making sure the story of Uncle Nearest is never again pulled away from what it should have always been about, the legacy of Nearest Green and his family.”
