Weaver, lawyers: Sanctions request misses mark

New filings argue bankruptcy petitions' legal basis and protected speech

8:10 a.m. April 17, 2026

DUANE CROSS
MCO Publisher•Editor

Fawn Weaver and the lawyers behind the Uncle Nearest bankruptcy filings are asking a federal judge not to sanction them, saying the receiver is trying to punish a legitimate legal fight — and, in Weaver’s case, protected speech.

The two filings, both submitted Thursday, mark the latest turn in a case that started as a lending dispute and has become something much bigger – a battle over control of the company, the scope of the receivership, and who gets to tell the story in public.

One filing came from bankruptcy counsel for Uncle Nearest, Nearest Green Distillery, and Uncle Nearest Real Estate Holdings. The other came from Weaver herself. Together, they push back on the receiver’s effort to sanction both the bankruptcy filings and Weaver’s public comments about the case.

Both filings make the same basic point: this was a real legal dispute, not bad faith.

The Bankruptcy Fight

The bankruptcy lawyers’ response goes right to the foundation of the receiver’s sanctions request.

Their point is simple. They say the receiver, Phillip G. Young Jr., has not clearly shown what legal authority would support sanctions against counsel, whether under the court’s inherent powers, federal law governing attorney misconduct, or some other rule-based standard. And if the legal basis is shaky from the start, they argue, the motion does not get very far.

They also say the bankruptcy petitions were not some rogue move made in defiance of the court. Instead, they argue the filings rested on a real, arguable legal theory supported by existing case law.

In plain terms, they say putting a company into receivership does not automatically wipe out management’s ability to file for bankruptcy. They point to the Sixth Circuit and more recent bankruptcy case law to argue the issue was serious enough for a bankruptcy court to decide, even if that court ultimately ruled against them.

The lawyers argue that Young is treating the bankruptcy filings as though their later dismissal proves they were improper from the start. Their response says that is not how the law works. A court can reject a legal argument without turning the act of making that argument into sanctionable conduct.

They also stress that the bankruptcy court took jurisdiction over the petitions and ruled on them. To them, that is more proof that the filings were not frivolous stunts, but part of a real fight over authority and control.

The Money Question

The bankruptcy response also goes after the amount the receiver wants.

According to the filing, the receiver is seeking a flat $25,000 penalty for each bankruptcy filing, for a total of $75,000. The lawyers say that the number is punitive, untethered to any specific harm, and unsupported by the record.

That matters because sanctions are not supposed to work like a rough guess. The filing argues that if a court is going to impose that kind of penalty, it needs clear findings, a developed factual record, and a demonstrated link between the conduct and the claimed harm. The lawyers say none of that is here.

A sworn affidavit from bankruptcy attorney Lynn Tarpy reinforces that point. Tarpy says she reviewed the receivership order and the relevant law before the petitions were filed, considered the overlap between receivership law and Chapter 11, and concluded there was a colorable legal basis to proceed. She says the filings were not made to harass anyone, delay the case, or run up costs.

That affidavit goes straight to the core issue in the sanctions fight: bad faith. Tarpy’s position is that there was none.

Weaver’s Filing Goes Further

Weaver’s own filing picks up the same bankruptcy argument, but it does not stop there.

Her lawyers argue that Young is also trying to punish speech that the Constitution protects. That pushes the case beyond a fight over bankruptcy authority and into a bigger clash over how far the receivership can reach when Weaver speaks publicly about it.

Their position is that neither the original receivership order nor a later January order bars Weaver from talking publicly about the case. And they argue that reading those orders broadly would create major constitutional problems.

Weaver’s lawyers say the receiver is trying to stretch language about not interfering with the receivership or damaging the brand into something much broader – effectively, a gag on criticism, public rebuttal, or even self-defense. Read that way, they argue, the orders would stop parties from disputing the receiver’s claims or defending themselves outside the courtroom.

Their answer is blunt: that is not what those orders mean, and it cannot be what they mean.

Free Speech Front and Center

The free-speech section of Weaver’s filing is one of the response’s sharpest sections.

Her lawyers argue that Young has identified no court order that clearly forbids the public comments at issue, and no evidence that her speech created the sort of grave threat that would justify shutting it down. They also argue the receiver has not shown her statements were false, defamatory, or even legally damaging in a meaningful way.

Much of what she posted, they say, involved testimony from a public court hearing, her own views of the case, and statements about the company’s value and direction.

The filing also challenges the evidence the receiver offered.

According to Weaver’s side, the sanctions request rests on a limited set of Instagram posts, a TikTok video posted by someone else, and a press release from Grant Sidney, Inc. Her lawyers say the receiver still has not pointed to any specific false statement in that material that would justify sanctions or an injunction.

They also dispute the suggestion that Weaver violated a nondisclosure agreement, arguing that no such agreement was in effect at the time the February hearing materials now in dispute were prepared.

The Business Argument

Weaver’s filing also goes against Young’s claim that her public comments hurt the brand.

Included with the filing is a Nielsen retail scan chart that says Uncle Nearest underperformed the broader market by 18.3% in January 2026, 16% in February, and 15.5% in March.

Weaver’s side uses that chart for a simple point: The brand’s decline was already underway, and the receiver has not shown that her public comments caused any new wave of damage.

That does not settle the larger business fight in the case. But it does show where this fight is heading next. The receiver has suggested that public comments and related filings created confusion and damaged value. Weaver’s side is now directly answering that claim, saying the record does not support it and that the problems were already there.

What the Filings are Really Saying

Taken together, the two responses ask Judge Charles E. Atchley Jr. to reject the sanctions request for two basic reasons.

First, they say the bankruptcy filings were part of a legitimate legal dispute over authority, timing, and control – not misconduct deserving punishment. Second, Weaver’s filing argues that her public comments were protected speech and that the receiver is trying to turn a receivership order into something much closer to a gag order.

That is why this latest round matters.

This is no longer just a fight over debt, cash flow, or even the survival of the Uncle Nearest business itself. It is now a fight over who had the power to pull the bankruptcy trigger, who controls the company’s future under receivership, and how far the court can go when one of the company’s most visible figures starts pushing back in public.

Now it is up to the court. But after Thursday’s filings, the shape of this fight is much clearer. This is not just a battle over money anymore. It is a battle over power, control, and who gets to speak while the company’s future is being decided.