Uncle Nearest whiskey brand sued by lender
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Uncle Nearest, the Tennessee whiskey brand that's enjoyed a meteoric rise since it launched a decade ago, was hit with a $108 million federal lawsuit last week from a lender that helped finance its expansion.
Why it matters: The lawsuit calls into question the future of the Shelbyville-based spirits company.
Zoom in: The plaintiff, a Kentucky-based agricultural lending cooperative called Farm Credit Mid-America, claims Uncle Nearest is in default on its loan agreement.
- Farm Credit Mid-America filed the suit in the Eastern Tennessee federal court and asked that a judge appoint a receiver to oversee Uncle Nearest's financial operations.
State of play: According to the lawsuit, Uncle Nearest failed to pay back loans and lines of credit that Farm Credit Mid-America provided. The lawsuit also alleges that the distillery did not provide detailed reports about its business operations, as required by its loan agreement.
- Uncle Nearest executives and co-founders Fawn Weaver and her husband, Keith Weaver, are named as defendants.
The other side: In a response filed this week, Uncle Nearest disputed the need for a receiver. The company called the plaintiff's lawsuit "salacious and inaccurate."
- Uncle Nearest attributed its financial predicament to "fraudulent activity" by a top executive, who the company has since fired. That executive was not named as a defendant.
- Uncle Nearest claims in its filing that it made "good faith" efforts to resolve the default, including millions of dollars in repayments last year.
In a social media post, Fawn Weaver again denied the claims in the lawsuit and called on Uncle Nearest fans to rally around the company. She pointed to states like Texas and Georgia, where she says the company is enjoying growth.
- "In a backdrop of industry decline and disarray, Uncle Nearest is the shining star," she said.
Flashback: Uncle Nearest has turned its Shelbyville property into a whiskey-fueled tourist attraction.