Weavers claim receiver overstepped authority

8:54 a.m. Dec. 3, 2025

DUANE CROSS
MCO Publisher•Editor

On Tuesday, Dec. 2, Fawn Weaver and Keith Weaver, two of Uncle Nearest’s three directors, filed a motion in U.S. District Court for the Eastern District of Tennessee. They claim the court-appointed receiver has exceeded the judge’s original intent since taking over the company in August. According to them, the receivership was meant to be a short-term, exceptional step to protect Farm Credit Mid-America’s collateral, not a way to force a sale or financial restructuring before a judgment.

The directors are backing an earlier emergency motion by major shareholder Grant Sidney Inc. – wholly owned by Fawn Weaver – that asks the court to lift the litigation “stay” just enough to let the company and its founders file answers, defenses, and counterclaims to Farm Credit’s lawsuit and push the case to trial and judgment. They also want the order appointing the receiver, Phillip G. Young Jr., rewritten so Uncle Nearest and its affiliates can hire their own lawyers, independent of the receiver.​

On Aug. 20, the Weavers requested that U.S. District Judge Charles Atchley appoint Phillip G. Young Jr. as receiver. Young is a Columbia, Tenn., attorney with 25 years of experience in receivership and restructuring. The Weavers said his local knowledge, understanding of Tennessee’s distilled spirits laws, and experience with both creditors and debtors made him the best choice.

• Directors' Response in Response of Emergency Motion

Weavers claim: at a disadvantage from the jump

On July 28, Farm Credit filed a lawsuit accusing Uncle Nearest, Nearest Green Distillery, Uncle Nearest Real Estate Holdings, and others – including the Weavers – of defaulting on loan agreements. Farm Credit also asked for an immediate receiver to take control of the business. After a quick hearing on Aug. 7, Judge Atchley approved the request, appointed Young as receiver, and put a broad stay in place to prevent any actions that could interfere with the receivership.

The directors argue the company was at a disadvantage from the start. They say their outside lawyers could not continue due to conflicts with Farm Credit, and many firms with receivership experience also had conflicts. By the time new lawyers were hired, there was little time to review Farm Credit’s claims or prepare a full defense before the court made its decision.

After more than a month in charge, Young filed his first quarterly report on Oct. 1. He told the court he was “very encouraged” about the company’s long-term prospects and believed Uncle Nearest had “significant value” and could be reorganized quickly. He said management and employees were fully cooperative, he and his team had taken over financial and operational control, and they had created a budget needing about $2.5 million more, mostly for receivership costs.

Young reported he found no evidence of misappropriation, theft, or financial wrongdoing by the founder, management, or current employees, and no signs of improper related-party transfers. He did note issues related to alleged fraud by former CFO Michael Senzaki. The directors now use these findings to argue there is no insolvency or ongoing fraud that would justify a forced sale or restructuring before a judgment.

Dispute over sales process and competitive harm

Despite these assurances, the filing states that the receiver has hired an investment banker and is looking at two options: refinancing the Farm Credit debt or selling most of the company’s assets. The directors argue that either option would “irreversibly” harm the founders and shareholders, who built Uncle Nearest for the long term and never planned to sell, especially since the spirits market is currently down and could lower sale prices.

They also warn that marketing the business requires opening the books to potential buyers, including direct competitors, through non‑disclosure agreements that may not fully protect Uncle Nearest’s proprietary commercial and financial information. That data, they argue, could allow rivals to adjust pricing and marketing strategies to blunt Uncle Nearest’s growth or erode its market share, causing competitive damage even if a sale never closes.​

Fight over who speaks for Uncle Nearest

A key issue in the case is who can represent the company in court. The receivership order gave Young “exclusive control” over Uncle Nearest and its related entities, and he claims only he can speak for them. This has sidelined the board and prevented it from retaining its own counsel. As a result, law firms like Adams & Reese and Latham & Watkins, which had been representing Uncle Nearest, withdrew after the receivership order and have not worked for the company since, according to the filing.

The directors say they thought a Nov. 25 court order, which required responses from Farm Credit and other defendants to the earlier emergency motion, showed the judge did not mean to take away the company’s right to hire its own lawyers. They hired the Nashville firm Manier & Herod, but say the receiver emailed on Dec. 1 to repeat that Uncle Nearest is “prohibited” from having independent counsel. This led the directors to file their new response in their own names instead of the company’s.

The main argument in the filing is about due process. The directors say Uncle Nearest and its founders are losing control of the company and its assets before trial, without a chance to answer the complaint, present defenses, or make counterclaims. They compare this to Farm Credit having a “cognovit note” – a pre-suit confession of judgment that Tennessee law does not allow (Tennessee Code Annotated section 25-2-101(a)) – and argue the current process assumes Farm Credit will win without a trial.

They outline several counterclaims they would make if allowed. These include claims that a former CFO, working with a Farm Credit loan officer, committed fraud and drew about $67 million in loans over 13 months without the required sign-off from Weaver, who Farm Credit had named as the main contact and signatory.

The directors also mention an affidavit from the former senior vice president of finance and planning, who defended the company’s accounting for $21 million in barrel inventory that Farm Credit said was “missing.” They point to internal valuations showing Farm Credit’s collateral was worth more than its loan exposure, and a $100 million refinancing letter of intent from a major real estate investor, which they say was shared with Farm Credit just days before the lawsuit.

What the Weavers want the judge to do

The directors are asking Judge Atchley to change the receivership order in three specific ways.

• They want the litigation stay lifted in a limited way so Uncle Nearest, its affiliates, and the Weavers can respond to the complaint, present defenses, make counterclaims against Farm Credit, and file any motions needed to move the case toward trial and judgment.

• They want clear permission for Uncle Nearest and its related companies to hire their own lawyers for the Farm Credit lawsuit and related matters, separate from the receiver.

• They ask the court to limit the receivership, saying the receiver’s role should gradually decrease so the board can take back daily operations while the receiver continues to monitor and report to the court. They argue that anything less could take away the founders’ and shareholders’ rights before a judge or jury decides if Farm Credit’s claims are valid or if Uncle Nearest’s defenses and counterclaims have merit.