Receivership fight escalates over timing, transparency

6:59 p.m. Jan. 29, 2026

DUANE CROSS
MCO Publisher•Editor

A procedural dispute is developing in the federal receivership case involving Uncle Nearest, Inc. Several related but non-party companies are seeking additional time and due process before the court decides whether they should be included in the receivership.

On Jan. 29, six companies connected to Uncle Nearest filed an emergency motion asking the U.S. District Court for the Eastern District of Tennessee to reconsider its schedule and postpone a Feb. 9 hearing on the receiver’s Motion to Clarify. The companies – Shelbyville Barrel House BBQ LLC, Humble Baron Inc., Quill and Cask LLC, Nashwood Inc., Shelbyville Grand LLC, and 4 Front Street LLC – say they are being asked to defend themselves against receivership without knowing the facts behind the receiver’s claims.

Later that day, court-appointed receiver Phillip G. Young Jr. filed a response opposing the request. He said he has complied with both the exact terms and the intent of a prior order, and that any further delays would harm judicial efficiency and leave the receivership uncertain.

• Emergency Motion | Receiver's Response

Motion to Clarify and the Question of Expansion

The dispute arises from the receiver’s Motion to Clarify, filed in September 2025, which sought the court's determination of whether certain non-defendant entities fall within the scope of the existing receivership. The receiver initially emphasized that he was seeking guidance from the court – not advocating for or against placing those entities into receivership – after questions arose about potential commingling of funds.

Farm Credit Mid-America, the lender that requested the receivership, later supported expanding it, saying there were asset transfers. The non-party companies have consistently denied any mixing of funds or holding of receivership assets.

In October 2025, the parties agreed to temporarily pause the case and set up a process. The non-parties would give bank records to the receiver, who would review them. Further action would only happen if there were still concerns.

The movants say they provided the requested records by Dec. 1, 2025. They did not hear anything further until early January, when the receiver requested a hearing after the court issued a show-cause order regarding late reporting.

Movants’ Argument: Due Process and an ‘Extraordinary Remedy’

In their 27-page filing, the six companies argue that the court’s current schedule puts them in a difficult spot. They must submit witness lists, exhibits, and legal arguments without knowing which transactions or facts the receiver will rely on.

They say that placing a non-party into receivership, especially when there is no claim that the company holds receivership assets, is among the most extreme forms of pre-judgment relief. Accordingly, they believe that stronger procedural protections are needed.

The motion also stresses practical concerns. The court has allotted a single day to hear both the motion challenging the continuation of the receivership itself and the Motion to Clarify, which could potentially place seven separate companies under receiver control. The movants argue that this compressed schedule makes it impossible to fairly address entity-by-entity evidence regarding corporate structure, banking practices, regulatory obligations, and alleged intercompany transactions.

They also refer to email exchanges, included as exhibits, which they contend show that everyone expected the recipient to identify specific transaction concerns before requesting a hearing. The movants acknowledge that the court may interpret the Agreed Order differently, but they argue that the circumstances warrant at least a short delay.

Receiver’s Response: Compliance and Efficiency

In response, the receiver characterizes the motion as merely another in a series of reconsideration and emergency scheduling requests. He urges the court not to further delay the case.

He states that the court has already found that he complied with the Agreed Order and denies that he intended to violate it. The receiver states that the process was intended to make matters efficient, not to give the movants an advantage.

The receiver states that the movants are aware of the transactions in question and cannot claim surprise. He states that there were numerous transfers between receivership companies and non-parties, and that none of the explanations to date fully account for the number and size of these transfers.

To address concerns regarding his preparedness, the receiver stated that his only witnesses for the Motion to Clarify will be himself and Tim Stone of Newtek Financial Advisors. He also said he will submit a detailed affidavit by Feb. 2, 2026, explaining his testimony and including all related exhibits.

Finally, the receiver notes that he offered to continue the hearing on the Motion to Clarify if the movants agreed to likewise continue the hearing on the motion challenging the receivership itself – an offer he says was not substantively accepted. He argues that both matters are intertwined and should be heard together, as evidence of commingling bears directly on whether the receivership should continue.

What Happens Next

The court has not yet ruled on the emergency motion. If denied, the Feb. 9 hearing will proceed as scheduled, potentially determining both whether the receivership over Uncle Nearest continues and whether additional affiliated entities are brought under the receiver’s control.

If the motion is granted, it could delay the case and alter how evidence is presented. It could also impose important limits on the scope of a federal receivership beyond the named defendants.

For now, the dispute underscores the high stakes of the case and the tension between expediting and ensuring due process as the court decides whether to expand one of Tennessee’s most closely watched business receiverships.