Humble Baron ordered into Chapter 7 bankruptcy

Judge hears evidence concerning unauthorized transfers, insider transactions, years of losses, and removed equipment

4:23 p.m. Sept. 14, 2026

DUANE CROSS
MCO Publisher•Editor

A federal bankruptcy judge ordered Humble Baron Inc. out of Chapter 11 and into Chapter 7 on Monday, taking control of the company’s bankruptcy estate away from management and putting it in the hands of an independent trustee.

U.S. Bankruptcy Judge Nicholas W. Whittenburg ruled after a hearing of more than two hours in Winchester that “cause” existed under federal bankruptcy law to either dismiss the case or convert it. He chose Chapter 7, finding that course better protected Humble Baron’s creditors and the estate.

The ruling followed testimony and records concerning money transferred after the bankruptcy filing, transactions involving insiders and affiliated companies, continuing financial losses, and audio and visual equipment removed from Humble Baron’s premises.

Whittenburg said the case “certainly needs trustee oversight.” Under Chapter 11, a company generally stays in control of its business while trying to reorganize, pay creditors, and work toward a court-approved plan.

Chapter 7 is a different animal. An independent trustee steps in and takes control of the bankruptcy estate. That trustee can chase down money or property that belongs to the estate, sort through creditor claims, and determine what should be sold or otherwise used to pay creditors.

Conversion does not automatically mean Humble Baron closes its doors Monday. But management is no longer running the bankruptcy estate.

The extra time runs out

Monday’s hearing had already been delayed once. At an Aug. 19 hearing, Whittenburg gave Humble Baron more time after its bankruptcy attorney reported a conflict and the company needed new counsel. At that point, the case already carried questions over more than $100,000 in transfers made after the bankruptcy filing, a roughly $1.1 million IRS claim, tax issues, and disputed obligations tied to the company’s lease.

Attorney Roy Michael Roman later sought permission to represent Humble Baron, but he withdrew that request Friday after reporting a conflict of his own.

Humble Baron is a corporation and cannot represent itself in bankruptcy court. Whittenburg still declined to delay the hearing again, pointing to the seriousness of the issues before him and the possibility that more estate money or property could be moved while the case stayed in Chapter 11.

Money ordered back never came on time

The U.S. Trustee’s case, presented by David Holesinger, reached back to a July 23 agreed order requiring Humble Baron to return $66,350.66 that had been transferred after the June 5 bankruptcy filing. The order also restricted transfers to insiders and affiliates and required ongoing financial reporting. The money was due back Aug. 1. It was not.

Holesinger told the court more transactions were later uncovered, including approximately $40,000 in July and a $34,584.95 transfer Aug. 5 from a Humble Baron Wells Fargo account to CEO and sole owner Keith Weaver. Holesinger said that transaction emptied the account.

The Aug. 5 transfer came 13 days after the court had restricted transfers to insiders and affiliates without prior approval. The U.S. Trustee also argued that the transaction had not been accurately disclosed during the Aug. 19 hearing.

Weaver testified Monday but repeatedly invoked his Fifth Amendment right against self-incrimination when questioned about financial transactions and company records.

Whittenburg allowed him to do so and continued with the hearing. Invoking the Fifth Amendment does not, by itself, establish that criminal wrongdoing occurred.

Among the records admitted into evidence were Humble Baron’s bankruptcy schedules, bank statements, monthly operating reports, corporate tax returns, cash-collateral orders, an IRS proof of claim, and agreements involving Humble Baron, Weaver, and related companies.

Missing equipment becomes part of the case

The hearing also turned to audio and visual equipment that had been at Humble Baron’s location inside Nearest Green Distillery. Testimony indicated the equipment was removed around Aug. 21, after the bankruptcy filing.

Questions were raised about where the equipment went and whether it had been rented to another party. Weaver invoked the Fifth Amendment when asked about the equipment, including whether it had been moved to keep it from becoming part of a possible Chapter 7 estate.

Whittenburg specifically cited the potential misappropriation of estate property, including the AV equipment, when explaining why cause existed to convert the case.

Four years in the red

Humble Baron’s financial history did not help its argument for staying in Chapter 11. Corporate tax returns introduced by the U.S. Trustee showed reported taxable losses of approximately $1.04 million in 2022, $1.80 million in 2023, $1.02 million in 2024, and $1.49 million in 2025.

That comes to more than $5.3 million in reported losses over four years.

The U.S. Trustee argued that Humble Baron had not shown a realistic path to profitability or a workable Chapter 11 reorganization.

Humble Baron maintained that it had a turnaround strategy and could eventually repay creditors. The court was also told that approximately $139,454 had been restored to the company’s debtor-in-possession account over the weekend, but that did not change Whittenburg’s ruling.

The judge noted that Humble Baron had not shown that the earlier transfers were reasonably justified, and money ordered returned under the July agreement had not been restored by the deadline set by the court. He also found the company had not shown a reasonable likelihood that a Chapter 11 plan could be confirmed within a reasonable time.

Weaver’s claim will get another look

One of the larger questions now headed to the Chapter 7 trustee involves Weaver’s own claim against Humble Baron. The U.S. Trustee introduced a shareholder loan agreement and promissory note between Weaver and the company. The document was signed Aug. 5, 2026, but stated that it was effective as of Nov. 9, 2021.

The Trustee argued that an independent trustee should determine whether Weaver’s claim is a legitimate company debt or an ownership interest. Payments involving other affiliates and insiders may also be examined.

A Chapter 7 trustee can investigate certain transfers made before or after a bankruptcy filing and, when permitted by law, seek to recover money or property for the estate. That authority was one reason the U.S. Trustee pushed for conversion instead of dismissal.

Dismissal would have ended the bankruptcy case and court supervision. Chapter 7 keeps the case alive, but with somebody new holding the keys.

Once cause for dismissal or conversion was established, Humble Baron had the burden of showing unusual circumstances that justified keeping the case in Chapter 11. Whittenburg found it had not. “The court is going to grant the U.S. Trustee’s request,” he said.

Lease fight moves to October

Humble Baron filed for Chapter 11 protection June 5 while operating inside Nearest Green Distillery at 3125 U.S. 231 N in Shelbyville.

A request by Uncle Nearest Real Estate Holdings for relief from the bankruptcy automatic stay was not decided Monday. Whittenburg continued that matter to the Oct. 5 Winchester docket so the Chapter 7 trustee has time to review the lease, the property, and Humble Baron’s occupancy before the court takes it up again.

Other pending matters fell away with the conversion. A motion for post-petition financing was denied as moot, and a cash-collateral matter also became moot.

The Chapter 7 trustee will now begin sorting through Humble Baron’s assets, debts, creditor claims, and disputed transactions. The trustee can also look into transfers involving insiders and affiliates and determine whether money or property should be returned to the estate.

Monday’s ruling does not establish that Weaver or anyone else committed fraud, embezzlement, or another crime. The court was deciding who should control Humble Baron’s bankruptcy estate and how the case should proceed.

Humble Baron came into court Monday still trying to keep control of its reorganization. It left with that control gone.