Has the fire sale begun? Receiver for Uncle Nearest wants to sell distillery asset fast
AI-generated summary reviewed by our newsroom.
- Receiver seeks emergency sale of non-income Martha’s Vineyard property.
- Sale will pay $1.5M lien; Farm Credit gets about $900K of excess proceeds.
- Judge to rule in March amid receivership fight and related foreclosures.
The receiver currently operating the troubled Uncle Nearest whiskey brand filed an emergency motion late Wednesday requesting the federal judge’s permission to sell a key asset.
Receiver Phillip Young wants to sell a property that the Tennessee distillery’s founders, Fawn and Keith Weaver, bought on Martha’s Vineyard.
According to the filing, the receiver listed the property on Jan. 26 for nearly $2.6m and received multiple full-price offers. A closing date is set for March 19 on an accepted offer.
The sale is not to an insider of Uncle Nearest or the receiver, according to the filing; the potential buyers are listed as Jennifer Kaalund and Sekou Kaalund.
The receiver said the property produces no income for Uncle Nearest and has continued to generate monthly expenses during the receivership.
“The receiver has determined that it is in the best interest of this estate and its creditors to liquidate all non-income producing property, including the Martha’s Vineyard Property,” the filing said.
The sale price will pay off a $1.5 million lien from lender Planet Home Lending.
It’s also encumbered by a $120 million lien from Kentucky lender Farm Credit, which sued Uncle Nearest after the company defaulted on more than $100 million in loans.
Farm Credit has consented to the sale, according to the receiver, and will release its lien in exchange for the excess proceeds of about $900,000.
According to the filing, the Weavers have refused to consent to the sale.
But the receiver said the sale is in the best interest of the lienholders, who will have to pay upcoming bills, including one for $12,000 for spring lawn and landscaping care otherwise.
The receiver said he believes the sale can be done without any further court order but out of abundance of caution and full transparency he is seeking one, without a hearing on the matter.
“The Receiver believes that this sale is in the best interest of the receivership estate, Uncle Nearest, the creditors and other parties in interest and should be approved,” the receiver said.
Uncle Nearest founder wants to regain control of the brand
The move came just ahead of a deadline that U.S. District Judge Charles E. Atchley Jr. set for Feb. 26 for supplemental information related to a hearing on Feb. 9 in Knoxville on Fawn Weaver’s request to end the receivership and hand the financially-distressed brand back to her control. The receiver also is seeking to expand the receivership to include other Weaver-owned assets that commingled money with Uncle Nearest.
The judge is expected to rule on both of those issues in March.
The receiver and Farm Credit have said that Uncle Nearest, which owns the Nearest Green Distillery, is insolvent with nearly $200 million in total debts so far. They say that if the business is returned to Fawn Weaver, then Farm Credit will move to foreclose.
Also, NexGen, a group of outside investors who have expressed interest in purchasing Uncle Nearest, have again filed a letter directly with the judge, this time asking him to delay his ruling on the receivership to allow more time for due diligence.
In the meantime, a foreclosure sale is scheduled for March 20 on the steps of the courthouse in Shelbyville, Tennessee, on three local properties that are owned by Keith Weaver. The assets may be part of the disputed companies that the receiver wants to sweep into the Uncle Nearest estate.
