By Katie Northcott, News Director
On Tuesday, Oct. 21, ten entities believed to be related to Uncle Nearest submitted motions opposing the expansion of Young’s receivership.
Uncle Nearest is a whiskey distillery located in Shelbyville. In July, Farm Credit Mid-America, a company that finances rural farmers, filed a lawsuit against Uncle Nearest, suing the company for over $100 million. In August, Philip Young, Jr. was appointed as receiver of Uncle Nearest to oversee the company while it pays off its debt.
On Sept. 12, Young submitted a motion for clarification of the receivership order, saying he had found eleven entities that appeared to be “somewhat related” to Uncle Nearest. He based his assessment on “common ownership, common business operations, and/or common financial operations.”
Young did not comment on whether he believed his receivership should be expanded. In a footnote to his motion for clarification, Young explained why he thought the issue was best decided by the court:
Based upon conversations with Fawn and Keith Weaver, the Receiver expects them to argue that these other entities and their assets should be beyond the scope of this receivership. Based upon conversations with counsel for the secured lender, the Receiver expects it to argue that these entities and their assets should be included in this receivership. Therefore, the Receiver seeks this Court’s guidance on the issue.
On Sept. 30, Charles Atchley, Jr., the judge in this case, noted that Farm Credit had responded in favor of expanding the receivership. Uncle Nearest had not responded. Atchley ordered ten of the eleven entities to respond to Young’s motion by Oct. 21 and ordered Farm Credit Mid-America to file any materials in its possession that may support expanding the receivership.
The entities involved are Shelbyville Barrel House BBQ, LLC; Humble Baron, Inc.; Grant Sidney, Inc.; Uncle Nearest Spurs VI, LLC; Quill and Cask Owner, LLC; Nashwood, Inc.; Classic Hops Brewing Co.; Shelbyville Grand, LLC; Weaver Interwoven Family Foundation; and 4 Front Street LLC.
On Oct. 21, the entities each responded in opposition to expanding the receivership. All of the entities are owned by either Fawn or Keith Weaver.
The Weavers said that two of the entities, Weaver Interwoven Family Foundation and Uncle Nearest Spurs VI, LLC, are concepts and not legal entities. Humble Baron’s response claimed that the other entities had suffered financially since being named in the case.
In this case, the completely unsupported allegations that these ten Non-Defendants have comingled their finances with the Defendants’ finances and should be placed under receivership has caused vendors to stop doing business with the Non-Defendants and customers to stop placing orders with the Non-Defendants to the financial detriment of the Non-Defendants.
Humble Baron submitted the longest response of any of the ten entities. Its statements and legal arguments were adopted by the other nine entities in their responses.
Humble Baron argued that there are two signs that Farm Credit’s allegations are unsupported: the receiver’s reticence to take a position on whether the receivership should be expanded and Farm Credit’s failure to file any materials that would support expanding the receivership.
Humble Baron also argued that Uncle Nearest would be able to pay its debts without involving additional companies:
It is important to note in this analysis that the Uncle Nearest Defendants are not insolvent by the Receiver’s own analysis. In fact, the Receiver has determined that the equity value of the Defendant companies, after payment of all the debts of the Defendant companies, is very significant even in a most conservative view.
Humble Baron then leveled accusations that Farm Credit has a relationship with a former CFO of Uncle Nearest and is trying to financially ruin the Weavers:
This prompts the question: what is this effort by Farm Credit really about? The answer appears to be that this is about a pillage and burn strategy by a creditor that may itself have exposure under lender liability for the close relationship its loan officer had with the former CFO of Uncle Nearest who has been accused of the very alleged malfeasance and fraud that form the basis of many of the allegations asserted by Farm Credit in its Complaint and that led to the alleged loan defaults that have put the Uncle Nearest companies in this current predicament.
Humble Baron then moved into legal arguments and explained that Uncle Nearest has never made payments on behalf of Humble Baron that do not advance Uncle Nearest’s own business interests. This was to negate claims that Humble Baron had an influence on Uncle Nearest’s finances.
Humble Baron’s response concluded by asking the court to decline to expand the receivership and to consider granting further relief for the financial hardship the ten entities have allegedly endured as a result of being named in the lawsuit.
The post Weavers Oppose Expansion of Receivership in Uncle Nearest Lawsuit, Levels Accusations Against Farm Credit appeared first on Thunder Radio.
