Since its founding in 2016, Uncle Nearest — named for the enslaved Black distiller who may have helped create Jack Daniel’s — has been one of the fastest-growing new whiskey brands in America, racking up a brace of awards and reaching a self-declared valuation of $1.1 billion in 2024.
Now, during an extended downturn in the spirits industry, it has joined a growing list of distilling startups to hit on hard times: On Aug. 14, a federal judge in Tennessee ordered that the company be placed in receivership following a lawsuit by one of its largest lenders.
The suit, filed in July by Farm Credit Mid-America, a cooperative financial services company, accuses Uncle Nearest of breach of contract, saying it defaulted on a series of loans totaling $108 million, including interest.
The suit also says the company inflated its inventory of whiskey barrels, which it had used as collateral against part of the loans; misstated details regarding the purchase of a $2.25 million house on Martha’s Vineyard; kept a cash balance far below the $1.5 million required by the loan; and failed to maintain sufficient internal financial controls.
The defaults began in 2023, though Farm Credit said at the time that it was willing to overlook them and even extend the loans further, “in reliance upon Uncle Nearest’s representations as to its success and strategic growth.” But after further defaults, Farm Credit moved forward with the request for a receiver, a neutral third party who will manage the company, though Uncle Nearest’s owners will not lose possession of their assets.
In a declaration filed with the court after the judge’s decision, the company’s founder and CEO, Fawn Weaver, called the lawsuit “not only inaccurate” but also “a flat-out lie used to smear my good reputation.”
Fawn Weaver, the founder and chief executive of Uncle Nearest, in Lynchburg, Tennessee, June 2017. (Nathan Morgan/The New York Times file)
She also said that appointing a receiver would irreparably harm the brand, since it would diminish her central role as both its internal and public face. “The Uncle Nearest brand itself would become worthless,” she wrote, “as whiskey buyers would view the company as having been taken from me.”
In contrast, the lender’s lawsuit paints a dismal portrait of the company’s finances — noting, for example, that in May the company’s cash balance was a mere $261,000, far below the $1.5 million that had been reported to Farm Credit by Uncle Nearest’s interim chief financial officer.
During a court hearing on Aug. 7, a lawyer for Uncle Nearest conceded that it would also likely default on an upcoming $10 million payment.
“It looks like you’re out over your skis,” replied the judge, Charles E. Atchley Jr., as reported in The Lynchburg Times.
Since Weaver, a California real estate developer, relocated to Tennessee to start the company, Uncle Nearest has been hailed as a critical and commercial success.
She was inspired in part by a New York Times article that recounted the story of Nearest Green, an enslaved man in Tennessee who, after the Civil War, worked for Jack Daniel as the head distiller of his whiskey company, but only recently was recognized by Jack Daniel’s for his work.
The story offered Weaver a compelling narrative as she rapidly expanded her brand. As CEO, she spent heavily on marketing and advertising, including a short film about Green starring actor Jeffrey Wright. Within a few years, Uncle Nearest was available in all 50 states and in 12 countries.
In a court filing in response to the initial lawsuit, Weaver and her husband, Keith Weaver, a former executive at Sony Pictures Entertainment and a member of the Uncle Nearest board, denied any wrongdoing.
They blamed the misstatements about barrel inventory and other financial missteps on their former chief financial officer, Mike Senzaki, whom they said they were investigating internally, claiming fraud.
“But for the fraud perpetrated by defendants’ former CFO, defendants fulfilled their monetary obligations to the plaintiff,” they wrote. “In other words, Defendants were, and are, victims of fraud — not perpetrators or conspirators.” Senzaki did not respond to a phone call and a text seeking comment.
Uncle Nearest is the latest in a series of whiskey companies to face sudden financial headwinds.
Workers in the bottling room at the Uncle Nearest facility in Shelbyville, Tennessee, June 2021. (Laura Partain/The New York Times file)
In July, the Luca Mariano Distillery, in Danville, Kentucky, filed for Chapter 11 bankruptcy a month after it opened. In April, Garrard County Distilling, in Lancaster, Kentucky, went into receivership after operating for just over a year.
Even large distilleries have faced difficulties: This month the Campari Group reported that its Wild Turkey and Russell’s Reserve whiskey brands had experienced an 8.1% annual drop in sales, while Diageo, which owns Bulleit, paused operations at its sprawling distillery in Lebanon, Kentucky.
Experts cite a long list of reasons for the slowdown in whiskey sales, including decreased alcohol consumption among younger drinkers and a glut of inventory built up during the pandemic.
And while many analysts are hesitant to say that the whiskey boom of the previous decade is now a full-on bust, they caution that some brands are especially vulnerable to such sudden downturns.
“Smaller and newer companies, like Uncle Nearest, typically have less access to the resources that help larger and more established players weather these kinds of pressures,” said Susannah Skiver Barton, the spirits columnist for the Food Section, a newsletter covering Southern cuisine. “If all your startup brand has known is growth and investment, course correction can be extremely difficult.”
Uncle Nearest does not distill whiskey at its main site in Shelbyville, Tennessee. Rather, it produces it at the Tennessee Distilling Ltd., a large contract producer in Columbia, south of Nashville, in what is called an alternate proprietorship, in which Uncle Nearest takes control of the facility for a set period. Uncle Nearest then blends and bottles the whiskey into several releases, including a Tennessee-style whiskey and a straight rye.
