Embattled distillery points finger at ex CFO

6:45 a.m. Aug. 4, 2025

DUANE CROSS
MCO Publisher•Editor

Embattled whiskey brand Uncle Nearest is forcefully defending itself in federal court against a $100 million lawsuit filed by lender Farm Credit Mid-America, calling the legal action an overreach rooted in the misconduct of a former employee.

In a fiery 35-page court filing Sunday, Uncle Nearest and its affiliated entities pushed back against Farm Credit’s emergency motion to appoint a federal receiver to take control of the company’s assets. The filing comes ahead of an Aug. 7 hearing in Knoxville that could determine the future of the fast-growing distillery and its prized inventory of aging whiskey.

At the center of the dispute is Michael Senzaki, Uncle Nearest’s former Chief Financial Officer, whom the company accuses of unilaterally inflating inventory figures that were used to secure millions in expanded credit. According to court documents, Senzaki reported that the company held 77,000 barrels of whiskey between 2022 and 2023 – an overstatement that led Farm Credit to approve a $24 million increase in Uncle Nearest’s revolving credit line.

“Neither I nor any other officer at Defendants was aware that the CFO had overstated the barrel inventory to Plaintiff,” Fawn Weaver, CEO and co-founder of Uncle Nearest, stated in a signed declaration. “Defendants have terminated the CFO and are investigating his misconduct.”

The company claims it was unaware of the discrepancy until January 2024, when it voluntarily provided accurate inventory reports revealing a roughly $21 million overstatement. That discrepancy triggered what Farm Credit now calls a “technical default.” Uncle Nearest says the lender was fully informed of the situation and even met with the lead third-party investigator, who confirmed that the Weavers did not know of Senzaki’s deception.

• Download the Nearest Green Filing

A Spirited Defense

In its court filing, Uncle Nearest contends that Farm Credit’s request for receivership is “an extraordinary and unwarranted remedy” that ignores months of cooperation, transparency, and substantial loan repayments – totaling $16.5 million since the start of 2024.

“Plaintiff was fully informed and aware of the circumstances that led to the technical default and was working side-by-side with Defendants to find a resolution,” the filing states.

Indeed, the distillery argues that the lender’s team shared responsibility for the fallout. Farm Credit officials had direct access to Senzaki, oversaw barrel-backed loan disbursements, and took no action to verify the reported inventory with third-party warehouses independently. Despite those red flags, the lender “approved the increase without verifying the inventory,” Uncle Nearest asserts.

The filing paints a picture of a close – and, at times, cozy – relationship between Farm Credit and Uncle Nearest’s leadership. This included Farm Credit’s apparent awareness and informal approval of another significant point of contention in the case: the purchase of a $2.2 million Martha’s Vineyard property allegedly funded by term loan proceeds.

Martha’s Vineyard and the “Undisclosed Entity” Claim

Farm Credit’s motion accused the company of improperly diverting funds to acquire the Martha’s Vineyard home through an undisclosed entity. But internal emails, itineraries, and event registrations included in the court record suggest Farm Credit not only knew about the purchase but physically visited the property, stayed nearby, and attended Uncle Nearest events there – including a Gospel Brunch and multiple cocktail hours.

One August 2023 email shows Farm Credit executive Jonathan Boyce coordinating travel plans and booking lodging in nearby Falmouth. Another email outlines a three-day itinerary for Boyce and Vice President Brian Klatt, who registered for Uncle Nearest events and even booked bike rentals for the trip. A separate message from Klatt jokingly asks whether he’ll be provided a pair of Air Force Ones for the occasion.

“These communications contradict Plaintiff’s current claims,” Weaver noted in her declaration, attaching screenshots and confirmations as Exhibit A.

Despite this paper trail, Farm Credit argues the real estate transaction was not adequately disclosed and that the company failed to grant a security interest in the property – a claim Uncle Nearest dismisses as revisionist history.

Payment Pause Controversy

Another pillar of Farm Credit’s lawsuit is the company’s temporary pause in loan payments, which it frames as evidence of financial instability. But Uncle Nearest says the payment pause was made at the advice of a third-party financial advisory firm approved by Farm Credit itself. The filing argues this is a common strategy during loan restructuring negotiations and was part of a mutually agreed plan.

Despite initial reluctance, Uncle Nearest claims it honored the advice and then resumed payments as soon as terms were finalized – sending $7.5 million to Farm Credit earlier this year.

Rapid Rise and Recent Scrutiny

Uncle Nearest has enjoyed a meteoric rise since its founding in 2017, widely praised for elevating the overlooked legacy of Nathan “Nearest” Green and becoming one of the fastest-growing independent whiskey brands in the United States. The company broke ground on a $50 million expansion in 2022 and has earned accolades for both its product and mission-driven marketing.

But in recent months, its trajectory has been shadowed by controversy. In addition to Farm Credit’s lawsuit, a former investor has sued the company over alleged financial misrepresentations, and questions have emerged about the governance structure behind its rapid growth.

Farm Credit’s motion was described as part of a broader effort to recover what it believes could become unrecoverable losses if a receiver is not appointed quickly.

What Comes Next

The legal battle is poised to reach a crucial juncture on Thursday, Aug. 7, when the U.S. District Court will hear arguments on whether to appoint a receiver to oversee the company’s assets – including its whiskey inventory, intellectual property, and real estate holdings.

For now, Uncle Nearest is holding firm.

“The drastic and extraordinary remedy of receivership is both unwarranted and inappropriate,” the company argues. “Plaintiff’s actions throughout these several months demonstrate that Plaintiff was not truly concerned that its collateral was in danger.”

The hearing will likely determine whether one of the most celebrated brands in American whiskey maintains its independence – or cedes control to a court-appointed custodian.