Bourbon distiller’s mediation bid rejected. Judge: Founder’s comments ‘troubling’
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- Federal judge denied Uncle Nearest's mediation request amid loan default case.
- Farm Credit opposed mediation, citing delays and lack of credible investor details.
- Judge criticized Weaver's public comments, warning of possible gag order breaches.
A bid by Uncle Nearest founder Fawn Weaver to send the distressed whiskey brand to a mediator and potential sale has been rejected.
Weaver filed a motion in federal court in Tennessee, where the company is based, in an attempt to stave off receivership, which U.S. District Judge Charles E. Atchley Jr. ordered Aug. 14.
Nearest Green Distillery, the Uncle Nearest whiskey brand, Weaver and her husband Keith, were sued by Kentucky lender Farm Credit Mid-America PCA after defaulting on $108 million in loans.
Weaver, who has been the public face of the financially troubled Uncle Nearest whiskey and bourbon line, claimed that Farm Credit had been unresponsive to her attempts to discuss a buyout.
“Uncle Nearest, together with a group of high-net-worth and well-funded investors represented by Holland & Knight LLP have made multiple, good faith attempts over the past month to pursue a commercial resolution of the claims in this case,” according to the filing.
Farm Credit, which requested that receiver be appointed to protect the distillery and brand assets, objected to this motion, saying that mediation would only delay the appointment of the receiver in an attempt to force a settlement. The judge also had previously rejected the idea as meritless.
Farm Credit pointed out that they have been negotiating with Weaver and her husband, Keith, for the last year and a half without resolution. “Not until last week was counsel for the purported group of high net-worth and well-funded investors identified, and Uncle Nearest has still not disclosed to the Lender the members of this apparently newly-formed ‘Investor Group,’” the bank said.
The bank said they have not received any written offer, only “multiple distracting and ultimately unsupported communications from various sources purporting to seek a resolution of its disputes with Uncle Nearest.”
Farm Credit also said that it was concerned that confidential details of any mediation would be made public, pointing out that Weaver has publicly discussed the litigation despite a gag order.
Judge Atchley agreed, saying in his denial of mediation on Aug. 21 that Weaver has come whisper close to violating the gag order with Instagram posts such as one that calls the order “hilarious.”
“The Court finds it troubling Mrs. Weaver has publicly discussed matters arguably covered by the Agreed Order, and even gone so far as to make light of her obligations under it,” the judge said. “Nevertheless, the Court presumes Mrs. Weaver did not intend to engage in any potentially proscribed conduct an dwill take no further action at this time. That said, the Court will recommend that Mrs. Weaver confer with counsel prior to making future public statements to ensure that her conduct does not run afoul of the Agreed Order.”
