Farm Credit Mid-America PCA filed a federal lawsuit on July 28, alleging that Tennessee whiskey producer Uncle Nearest defaulted on $100 million in loans.
The lawsuit, filed in U.S. District Court in the Eastern District of Tennessee, names Uncle Nearest, its Nearest Green Distillery, and co-founders Fawn and Keith Weaver as defendants. According to Farm Credit Mid-America, Uncle Nearest owes more than $108 million across several loans and accrued interest.
A hearing is expected on August 7 on Farm Credit’s motion to appoint a receiver to take over the distillery.
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Farm Credit, in its complaint, says the Weavers and the distillery had failed to properly respond to repeated requests for information and a consensual resolution to “myriad defaults,” which include failure to pay the principal and interest payments many times. The complaint says the distillery has been in default since January 2024.
Farm Credit also claims the Weavers used proceeds from a loan to purchase a home in Martha’s Vineyard. It alleges that the property was mortgaged in a separate $1.5 million loan involving another lender.
Per the complaint, the distillery “provided inaccurate reports on whiskey barrels held as collateral; sold barrels to generate cash to pay past-due obligations to parties other than Farm Credit; sold millions of future receipts and revenue streams at a discount to at least four different parties on at least four separate occasions without telling Farm Credit; failed to maintain any net income each month; and failed to maintain a net worth of at least $100 million during 2024 as required by the loan documents,” as reported by the Lexington Herald Leader.
Fawn Weaver has since denied the allegations. In an Instagram post on Sunday, Fawn Weaver said the distillery’s chief financial officer, who has now been fired, was responsible for a $21 million overstatement of collateral, adding that the fired officer engaged in “fraudulent activity” which is now under third-party investigation.
Fawn Weaver also said Farm Credit was aware of the purchase of the home in Martha’s Vineyard, explaining that bank officers visited there in 2023 with the former CFO Mike Senzaki.
“But for the fraud perpetrated by the Defendants’ former CFO, Defendants fulfilled their monetary obligations to the Plaintiff. In other words, Defendants were, and are, victims of fraud — not perpetrators or conspirators,” the Weavers wrote.
Uncle Nearest Premium Whisky was founded by Fawn Weaver to honor the memory of Nearest Green, an enslaved African American who helped Jack Daniel start his distillery.
The distillery became the first in U.S. history to honor an African-American whisky maker and one of the few distilleries in the country owned and operated by a black, female lead.
Despite the effect of COVID-19 on many businesses, particularly black businesses, Fawn Weaver weathered the storm to top the chart of bestselling African-American-owned whisky brands.
In 2021, the brand became the best-selling African-American-owned and founded spirit brand in the U.S. after selling nearly 1.5 million bottles of its sought-after super-premium whiskey.
Last May, Uncle Nearest reached unicorn status, a feat few black businesses have been able to achieve. This followed the brand’s capital raise for its French subsidiary, which was oversubscribed. It is now experiencing problems as it faces a bank takeover.
