Nearest Green lawsuit exposes investor rift

2:56 p.m. Aug. 8, 2025

DUANE CROSS
MCO Publisher•Editor

Nearest Green Distillery co-owner Keith Weaver appeared before Judge Charles E. Atchley Jr. in a Chattanooga federal courtroom on Thursday as lender Farm Credit Mid-America pushed for a receivership to take control of the company’s operations – the latest turn in a high-stakes $100+ million lawsuit.

The legal dispute targets the distillery’s flagship brand, Uncle Nearest, for defaulting on loans and poor financial management. In an Aug. 4 update, the company blamed the turmoil on alleged misconduct by former CFO Michael Senzaki, while denying any wrongdoing and labeling Farm Credit’s action an “overreach.”

Receivership is a court-ordered process where a neutral third party (a receiver) is appointed to manage and protect a company’s assets during financial problems, disputes, or insolvency. Receivers are usually brought in after loan defaults, fraud, mismanagement, or other issues threaten the business’s stability. Their duties may include running operations, reviewing finances, and selling assets to pay creditors.

Unlike bankruptcy, which is initiated by the debtor and governed solely by federal law, receiverships are often started by creditors, shareholders, or regulators, can operate under either state or federal law, and may offer a faster, more flexible way to protect stakeholders’ interests.

Shelbyville NOW reported that during the hearing on Thursday, Farm Credit Mid-America accused the company of owing more than $100 million, missing multimillion-dollar payments, and accruing $28,000 in daily interest, with nearly all major assets pledged as collateral. The lender tied the crisis to a $21 million barrel inventory discrepancy in early 2024, allegedly approved by then-CFO Senzaki, along with rapid expansion and questionable financial reporting.

Defense attorney Rocky King admitted the company is in default and lacks the $10 million due this week. Still, he argued that installing a receiver – as the bank requests – would destroy the brand’s value, which is closely linked to founder Fawn Weaver’s leadership. Keith Weaver testified to ongoing sales growth but conceded under cross-examination to layoffs, unpaid vendors, and uncertainty about the company’s finances. The bank dismissed Uncle Nearest’s $1 billion valuation as fiction and likened its borrowing to a payday loan.

‘This was not unexpected’

Behind the scenes, a rift between some investors and CEO Fawn Weaver has deepened.

“It’s shocking,” one investor said of Farm Credit’s receivership filing. “Something seemed fishy, so this was not unexpected.”

Several investors told the Observer, on the condition of anonymity to avoid retaliation by Weaver, that they have been “openly questioning” the distillery’s practices and her leadership, citing a lack of transparency in financial reporting.

“We would like audited financials – a true evaluation,” one investor said, adding that “there is a lot of unrest and unhappiness” among backers.

Uncle Nearest Inc. has 170 individual investors, according to a recent report. This unique funding approach, where the company chose a large group of individual investors instead of traditional venture capital or private equity, allowed Weaver to maintain control of the company.

Investors include Craig Leipold, the majority owner of the NHL’s Minnesota Wild and former owner of the Nashville Predators, and Steve Mosko, CEO of Village Roadshow Entertainment Group, a leading global feature film entertainment company. Other notable investors are Altrus Capital, East Chop Capital, Hybridge Capital Management, Strand Equity, and CB3 Holdings.

‘Fawn is building her brand’

In 2024, Forbes estimated Uncle Nearest Inc. to be worth $1.1 billion, and Weaver’s stake was valued at $470 million, earning her a spot on the magazine’s annual list of America’s Richest Self-Made Women for the first time.

Multiple Uncle Nearest investors recalled being pitched a business plan that included a clear exit strategy. “Now, we’re told there is no exit strategy,” one said. “Fawn is building her brand – not Uncle Nearest. She has great confidence. That can be good in building a brand – but it can be a detriment.”

While critical of leadership, investors stressed they want the distillery to succeed. “We want to see Uncle Nearest thrive – not a fire sale,” one said. “We were sold a story – a business plan and an exit plan. It’s frustrating.

“We asked for financials and received a cap table – basically, an Excel file of our own holdings. We’re getting stonewalled. We want to know what are our avenues to protect our investment and see a return.”

A cap table (short for capitalization table) is a snapshot of a company’s ownership structure. It is an essential document for founders, employees, and especially investors.

What’s in it?

• Names of shareholders
• Types of equity (common stock, preferred stock, options, convertible notes, SAFEs)
• Number of shares and ownership percentage
• Company valuation at different stages
• Stock option pool details for employees
• Terms of convertible instruments
• History of equity transactions

Cap tables provide transparency into who owns what – vital for assessing risk and potential dilution. They help investors:

• See how ownership is split among stakeholders
• Understand rights and preferences tied to different shares
• Spot red flags in equity structure
• Model how new funding rounds change the ownership mix

A cap table is the investor’s roadmap for evaluating value, negotiating terms, and tracking their stake over time.

‘We’re hoping for … some accountability’

One investor stressed that their concerns are not aimed at the distillery, but at management. “If [Uncle Nearest] is not sold, we would like to see a return. There are a lot of moving parts. We’re hoping for a change in control, some accountability.”

The Observer reached out to Keith Weaver regarding the investors’ concerns. He has not responded.

Judge Atchley has not yet ruled on Farm Credit’s receivership request.

Two other federal lawsuits have also been filed against Uncle Nearest: one in New York alleging sex discrimination, harassment, and retaliation, and another in Oregon claiming breach of contract and unjust enrichment.

Additionally, a case – Pratt Converting Division Nashville LLC vs Uncle Nearest Inc. – is scheduled in Bedford County on Wednesday, Aug. 13.

On June 6, Packaging Corporation of America received a judgment against Uncle Nearest for $84,751.97 in Bedford County.