KY bank: Jay-Z secretly loaned money to Uncle Nearest, which fraudulently hid it
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- Farm Credit alleges MarcyPen (MP‑Tenn) loaned $20M to Uncle Nearest.
- Filings say Weavers moved proceeds to Grant Sidney to hide $20M from Farm Credit.
- Bank seeks expanded receivership amid disputes over insolvency and sales.
The Kentucky lender Farm Credit has accused Uncle Nearest of fraud, including attempting to hide a $20 million loan that came from media mogul Jay-Z.
In the latest filings in a long legal saga, Farm Credit Mid-America, based in Kentucky, said Uncle Nearest founder Fawn Weaver and her husband, Keith, have “egregiously mischaracterized” the disputed $20 million transaction and how much the bank knew about the details.
The troubled whiskey and bourbon brand, based in Tennessee, has been in receivership since last August after Farm Credit sued, alleging that Uncle Nearest, Nearest Green Distillery and the Weavers had defaulted on more than $100 million in loans.
Over the last six months, the court-appointed receiver has attempted to sort out the incomplete financial records and stabilize the company. According to the receiver and Farm Credit, Uncle Nearest is insolvent and owes nearly $200 million; the Weavers dispute this and want to end the receivership.
U.S. District Judge Charles. E. Atchley Jr. is expected to rule soon on the state of the receivership as well as on an emergency motion to sell a home on Martha’s Vineyard that the Weaver had purchased for Uncle Nearest with the bank’s money then re-mortgaged with a separate lender without bank approval.
The bank said it supports not only continuing the receivership but expanding it to include seven Weaver-owned companies that commingled assets with Uncle Nearest, including the disputed $20 million transaction.
One of the companies that could be absorbed is Grant Sidney, owned by Fawn Weaver, which was allegedly used to move and hide the payment to keep it from Farm Credit and avoid tax liability, according to court records.
According to Farm Credit’s filing, Fawn Weaver told Farm Credit the $20 million was a loan from Grant Sidney, when in fact it came from an outside source, MP-Tenn LLC, also sometimes referred to as MarcyPen.
MarcyPen is a venture capital firm formed in late 2024 and owned by Jay-Z, Jay Brown, Larry Marcus and Robbie Robinson, along with D’Rita Robinson. Jay-Z is a rapper, businessman and record executive married to Beyoncé.
“The Weaver Parties attempt to imply (incorrectly) that FCMA was in no way misled at the time. FCMA was considerably misled,” the bank said.
The accounts that were used to move the investment around to, in Fawn Weaver’s words, keep it from being “snatched” by the bank, were not known to the bank or to the receiver until recently, according to court filings.
“Whatever protestations Ms. Weaver makes now to the contrary do not change the fact that MarcyPen loaned money to Uncle Nearest, Inc., not Grant Sidney. Ms. Weaver, who exercises complete control over Uncle Nearest and Grant Sidney, moved the proceeds from Uncle Nearest to Grant Sidney to make sure that $20 million coming in could not be snatched by [FCMA],” the bank said.
“Ms. Weaver’s own testimony shows that Grant Sidney — the largest shareholder of Uncle Nearest — whose sole stockholder is also the CEO of Uncle Nearest (Ms. Weaver) and exercises complete control of both entities, orchestrated and executed a scheme to perpetuate the violation of Uncle Nearest’s legal duty, or to commit a dishonest and unjust act in contravention of FCMA’s rights,” the bank continued.
MarcyPen has since said Uncle Nearest is in default on the loan, according to the bank’s filing.
The bank noted in a footnote that “under Tennessee law corporate veil piercing is allowed where control over a corporation has ‘been used to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or a dishonest and unjust act.”
The bank also pointed to a payment of $130,000 made by another contested Weaver company, Shelbyville Grand, as another example of commingling, in this case a transfer of funds disguised as storage payments due.
In a separate filing, the bank also argued that the Weavers have not presented sufficient evidence to warrant handing the company back to them.
“They paint themselves as victims of greed and portray FCMA as a villain bent on their personal destruction. The true story is simpler, though perhaps far less interesting to the Weaver Parties. Uncle Nearest owed the debt to FCMA and other creditors, Uncle Nearest defaulted on that debt, Uncle Nearest was (and is) insolvent, and this receivership is necessary,” the bank said.
According to its filing, the Weavers defaulted 20 times on the loans before the bank sued and asked for receivership.
“The Weaver Parties’ own testimony shows they treated Uncle Nearest’s cash (and FCMA’s collateral) with a reckless abandon to further their quixotic obsession with ‘growth.’ But FCMA and other stakeholders should not have to pay for the Weaver Parties’ hubris. The Weaver Parties continue their cannibalization of the estate’s assets through their never-ending baseless filings.”
The bank pointed out that despite Fawn Weaver’s hypothetical estimation of the value of Uncle Nearest at $300 million to $480 million, the actual bids received so far had been less than Farm Credit’s debt alone.
According to the filing, Uncle Nearest also “fraudulently reported” $21 million in barrels of whiskey in its collateral inventory that were committed under a borrowing agreement to another company, Advanced Spirits.
In their own filings, the Weavers also accused the bank of fraud in its characterizations of the circumstances leading up to the receivership, alleging that Farm Credit had misled the court about Uncle Nearest’s financial circumstances. Fawn Weaver, in her declaration, continues to paint a much rosier picture, alleging that the whiskey and bourbon brand is solvent.
The Weavers accused Farm Credit of “fraud on the court” for a pattern of making serious financial allegations that are rebutted and then dropped, only to be followed by new allegations.
“The repeated sequence of serious accusations advanced without a basis in any documentary evidence already in the filer’s possession presents a pattern that approaches the concerns addressed under the fraud-on-the-court doctrine,” the Weavers said. “Any new allegations by the bank or the receiver should be “considered in light of the pattern described above and evaluated strictly against the documentary record developed in this case.”
In its own filings March 5, Uncle Nearest also denied fraudulent conduct regarding the MarcyPen $20 million loan and asked for Farm Credit’s allegations to be “ignored, struck and dismissed.” The loan money all went to Uncle Nearest or related entities or vendors, the Weavers allege, and that the money actually came from an outside source is irrelevant.
“No fraud by Grant Sidney has been alleged with the particularity required for a federal pleading. The assertion that Uncle Nearest engaged in fraudulent conduct relating to the MP-Tenn transaction is not correct,” the Weavers said.
The Weavers also are opposing the sale of the house on Martha’s Vineyard, which they said has promotional value for the brand.
If it must be sold, they said, hold off for now. The Weavers said they have identified an Uncle Nearest investor who is willing to “match” the current offer of nearly $2.6 million: Nubian Sage Enterprises, founded by former NBA temmates Kevin Johnson and Mark West.
They plan to submit by March 9 a written offer to acquire the interest in the house for $900,000 cash to the receivership estate, which is what the receivership would net out of the sale after the other mortgage is paid off.
