Investor group offers to buy out troubled whiskey’s $108m Kentucky loan
AI-generated summary reviewed by our newsroom.
- NexGen2780 offers to buy $108M Farm Credit loan to accelerate sale.
- Group proposes repay debt, provide working capital, and cover court fees.
- Investor warns extended receivership may erode brand, vendor and employee value.
An investor group is looking to buy out troubled whiskey brand Uncle Nearest so they can speed up a potential sale.
In a letter filed in federal court, an investor named Walter Miles of Johns Creek, Ga., told U.S. District Judge Charles E. Atchley Jr. that he represents a group of individual and institutional investors who are forming a group called NexGen2780 to buy out the $108 million debt to Kentucky lender Farm Credit.
The Tennessee whiskey and bourbon brand Uncle Nearest and Nearest Green Distillery have been in receivership since last fall and the investor group want to speed things along.
Uncle Nearest founder Fawn Weaver and her husband, Keith Weaver have been fighting to regain control of the whiskey brand and stop the sale of assets, including the distillery.
They recently filed a lawsuit in a Tennessee court against former chief financial officer Michael Senzaki, alleging he cost them millions through forged stock transfers, false billing and corporate fraud. No criminal charges have been filed; Senzaki has not responded to the lawsuit yet.
But investors apparently are getting antsy: “We respectfully note our concern that the extended duration of the receivership proceedings may be contributing to a gradual diminution of enterprise value,” Miles said in the letter. “Prolonged uncertainty can adversely affect brand equity, distributor and vendor relationships, employee retention and overall market positioning. NexGen2780 believes that a timely and orderly sale process, conducted under Court supervision, could help mitigate further value erosion while maximizing recovery for creditors and other stakeholders.”
Fawn Weaver cited slumping sales of Uncle Nearest whiskey and bourbon in a recent motion to dump the receiver, saying distributors have backed out of deals and the spirits have been pulled out of bars and stores.
It’s unclear how Miles is involved other than as general partner for the group. Miles did not immediately respond to an interview request. LinkedIn lists a Walter Miles as a financial professional and a graduate of Morehouse College in Atlanta, a private historically black all-male college.
Miles said that his group sent a letter of intent to Farm Credit, Uncle Nearest and the court-appointed receiver in October. According to the letter of intent, the NexGen2780 hopes to repay the debt, provide working capital and cover court and receiver fees.
“The transaction will also deliver an equitable exit strategy for existing shareholders,” according to the letter of intent. “The transaction shall be subject to court supervision and receiver oversight.”
NexGen2780 said existing equity stakeholders could opt for a buyout or possibly retention of interest, with court approval. Ownership, equity allocations and management of NexGen2780 will be defined in the agreement.
Court-appointed receiver Phillip Young this week filed an update on progress toward restructuring the debt and/or selling the distillery and brand. He asked the judge to keep the filing under seal; late yesterday the Weavers filed a motion in support of keeping the report sealed and said they planned to file a rebuttal, also under seal.
The receiver also asked the judge for a hearing in late January on a request to expand the receivership to include at least seven other Weaver-controlled businesses that had at least $20 million in financial transfers to and from Uncle Nearest.
