Receiver seeks sanctions after bankruptcy filings

Alleges Weaver violated a receivership order by filing Chapter 11 petitions

8:47 p.m. March 17, 2026

DUANE CROSS
MCO Publisher•Editor

A federal court-appointed receiver overseeing key Uncle Nearest entities asked a judge Tuesday to sanction CEO Fawn Weaver after she filed Chapter 11 bankruptcy petitions for three company-related entities, arguing she lacked authority to do so under the court’s existing receivership order.

In an expedited motion filed in the U.S. District Court for the Eastern District of Tennessee, receiver Phillip G. Young Jr. said Weaver signed bankruptcy petitions on March 17 for Uncle Nearest Inc., Nearest Green Distillery Inc., and Uncle Nearest Real Estate Holdings LLC despite a receivership order that vested him with the powers of the companies’ officers and managers. He also cited a Dec. 22, 2025, ruling stating that “only the Receiver may represent the Defendant Companies’ interests in this litigation.”

Young asked the court to declare that Weaver was not authorized to sign bankruptcy petitions on behalf of the three entities and to impose monetary sanctions of $25,000 per filing, for a total of $75,000. He said the court should decide whether any sanctions should fall solely on Weaver or also on the lawyers involved in the district court case and the bankruptcy filings.

• Receiver's Expedited Motion | Bankruptcy Filings | Attorney's Email | Press Release

Competing Public Claims

Weaver publicly declared the receivership was over the same day the bankruptcy petitions were filed. According to the receiver’s motion, that message was amplified through a press release and social media statements announcing the end of the court-ordered receivership. Young said those statements created confusion among customers, vendors, distributors, employees, shareholders, and potential asset buyers, triggering dozens of calls, emails, and texts within hours and having an “immediate and negative impact” on operations and the asset-sale process.

Young’s motion says he is already working, in consultation with the U.S. Bankruptcy Trustee’s office, to seek dismissal of what he called the unauthorized bankruptcy cases. He argued that bankruptcy may still be an option for the companies, but said the timing matters because the receivership is still determining which entities are included and is pursuing bids for the companies' assets.

Weaver’s side offered a sharply different view.

In email correspondence attached to the sanctions motion, attorney Kelli Holmes of Tarpy, Cox, Fleishman & Leveille wrote that she was “well aware” of the district court’s receivership order but argued that the order authorized the receiver to file a bankruptcy case without giving him exclusive authority to do so. Holmes wrote that Chapter 11 was intended to allow the business to continue operating under a refinanced debt structure and pay its creditors.

Bankruptcy Filings Detail the Stakes

The bankruptcy petitions themselves were signed by Weaver as chief executive officer, with attorney Lynn Tarpy signing as counsel for the debtors. The main petition for Uncle Nearest Inc. lists the company’s principal place of business at 3125 U.S. 231 North in Shelbyville, estimates between 200 and 999 creditors, and places assets between $500 million and $1 billion and liabilities between $100 million and $500 million.

Separate Chapter 11 petitions were filed for Nearest Green Distillery Inc. and Uncle Nearest Real Estate Holdings LLC. Those filings each estimate assets between $50 million and $100 million and liabilities between $10 million and $50 million.

Weaver’s side also outlined its position in a Grant Sidney, Inc. press release attached as an exhibit to the receiver’s motion. In that release, Grant Sidney said Uncle Nearest’s founders, chief executive officer, and largest shareholder had sued Farm Credit Mid-America in New York state court, alleging the lender engaged in a smear campaign by circulating false accusations about missing inventory, financial misconduct, negative cash flow, and insolvency.

The same release said the Chapter 11 filing had brought the court-appointed receivership “to an end.” It framed the bankruptcy as a reorganization tool that would allow the company to protect creditors and shareholders, continue normal operations, and pursue claims and counterclaims tied to the lending dispute. The release said court filings reflected approximately $13.19 million in unsecured obligations, a disputed Farm Credit loan balance of about $102.5 million, and enterprise assets estimated at roughly $529 million. It also said operations at Nearest Green Distillery and national distribution of Uncle Nearest whiskey would continue during the reorganization process.

Fight Moves to Two Courts

The receiver disputes that characterization directly. His motion argues that Weaver’s filings violated the receivership order, interfered with the administration of the receivership estate, and improperly forced the bankruptcy court to confront a question he says the district court has already answered: who has authority to act for the companies.

The dispute is now proceeding on two tracks. In bankruptcy court, the immediate question is whether the Chapter 11 petitions will remain in place. In district court, the question is whether the receiver alone had authority to file them and whether sanctions will be imposed.