Uncle Nearest, Farm Credit reach deal to settle counterclaim

Proposed settlement acknowledges nearly $129 million in debt, but the agreed reduction and final balance still unclear

2:31 p.m. Oct. 23, 2026

DUANE CROSS
MCO Publisher•Editor

Uncle Nearest has acknowledged owing Farm Credit Mid-America nearly $129 million under an agreement that would settle the distillery company's negligence counterclaim against its lender.

The agreement, filed Friday, Oct. 23, in federal court in Winchester, calls for Farm Credit to reduce the outstanding debt in exchange for dismissal of the counterclaim. How much the lender agreed to reduce the debt isn't disclosed.

The deal would settle one piece of the federal lawsuit that placed Uncle Nearest under court-appointed receivership last year. It would not end the lawsuit or return control of the company to its previous management.

The seven-page stipulation and agreed order, signed by attorneys for Farm Credit and the receiver representing Uncle Nearest, awaits approval by U.S. District Judge Atchley.

Nearly $129 million acknowledged

The agreement identifies Uncle Nearest Inc., Nearest Green Distillery Inc., and Uncle Nearest Real Estate Holdings LLC as parties to the settlement. "The Parties agree that Uncle Nearest is liable to Farm Credit in the aggregate amount of at least $128,986,499.89," the filing states, establishing the obligation as of Oct. 20.

That figure includes Farm Credit's attorneys' fees through Sept. 30. The lender reserves the right to seek additional legal fees incurred after that date.

Additional interest, monthly payments, expenses, charges, and other obligations arising after Oct. 20 could push the amount higher.

The filing calls the lender's concession a "Debt Reduction," but provides no dollar amount. The provision describing the reduction says Farm Credit agrees to reduce "its outstanding obligations," even though Farm Credit is the lender.

The document does not clarify that wording or establish whether the acknowledged $128.99 million liability is calculated before or after the proposed reduction.

Counterclaim challenged Farm Credit's handling of loans

The dispute traces to July 22, 2022, when Uncle Nearest entered into a credit agreement with Farm Credit establishing three borrowing facilities: a revolving loan, a term loan, and a real estate line of credit.

By July 2025, Farm Credit was accusing Uncle Nearest of defaulting on those loans and asking a federal judge to put the company under receivership.

The lender filed its lawsuit July 28, 2025. Less than a month later, on Aug. 22, the court appointed Phillip G. Young Jr. as receiver, giving him broad authority to manage the company's affairs and pursue or settle legal claims on its behalf.

On July 7, 2026, Young filed an answer to Farm Credit's complaint and a counterclaim accusing the lender of negligence and gross negligence in administering Uncle Nearest's credit facilities.

Farm Credit moved to dismiss the counterclaim 10 days later.

According to Friday's filing, the lender argued that Uncle Nearest had already released the claims and that the allegations failed under applicable state law. Rather than continue litigating those arguments, Farm Credit and the receiver negotiated the proposed settlement.

Under the agreement, Uncle Nearest would dismiss its counterclaim with prejudice, preventing the same claims from being brought again, in exchange for the undisclosed debt reduction.

The settlement also requires Uncle Nearest to release Farm Credit, its affiliates, attorneys, and related entities from claims connected to the counterclaim, the loan documents, and the lender's administration of the credit facilities.

Neither side admits liability arising from the counterclaim. That provision does not change Uncle Nearest's acknowledgment of the nearly $129 million debt.

If the court approves the deal, Farm Credit's pending motion to dismiss the counterclaim would be denied as moot. Each side would cover its own costs associated with preparing the settlement.

Federal lawsuit and receivership continue

Although the agreement would end Uncle Nearest's counterclaim against Farm Credit, the lender's original lawsuit remains unresolved.

Friday's proposed settlement does not dismiss those claims, terminate the receivership, or establish a timetable for returning control of Uncle Nearest to its previous management.

It also does not separately settle claims involving Fawn Weaver and Keith Weaver, both named as individual defendants in Farm Credit's original complaint. The parties to Friday's agreement are Farm Credit and the three Uncle Nearest corporate entities.

The proposed order gives the federal court continuing authority to resolve disputes over implementation of the settlement.

The agreement is dated Oct. 23, but the copy filed with the court does not contain the judge's signature.

As for the nearly $129 million in acknowledged debt, Friday's filing offers no dollar figure for Farm Credit's concession – or a final balance after the reduction.