Could Uncle Nearest lose his whiskey a second time?
On July 28 Farm Credit Mid-America, Uncle Nearest’s main creditor, filed suit in the US District Court for the Eastern District of Tennessee, naming Uncle Nearest, its Nearest Green Distillery, and co-founders Fawn and Keith Weaver as defendants.
Their claim was that they owed more than $108mm across various loans and interest payments. In addition, they claim they were provided “apparently inaccurate” barrel inventory reports that overstated the values of their reserves by $21 million, among many other unfilled obligations. They also claim the adjustments Uncle Nearest made to the business didn’t materialize or bring in the revenue as promised.
A legal fight ensued on August 14, when a federal judge in Tennessee placed Uncle Nearest whiskey distillery under a court-appointed receivership, pulling day-to-day control from the CEO. Dawn Weaver and Farm Credit Mid-America are required to submit “additional briefing on their receiver candidates by midnight on August 20.”
Uncle Nearest rejects many of the allegations as simply “salacious and inaccurate,” claiming they fully informed the lender of the circumstances and were actively working with them on a solution.
In addition, they claim their former chief financial officer (CFO), who engaged in the fraudulent activity, has since been terminated, and an investigation into his misconduct is ongoing and being handled by a third party.
The Story of Uncle Nearest Took The Industry By Storm
Nathan “Nearest” Green, once enslaved, became the first documented African American master distiller in the United States. While working at Dan Call’s distillery in Tennessee, Green not only perfected his craft but also mentored a young Jack Daniel, teaching him the art of whiskey-making.
The perception, up until 2016, was that Jack Daniel’s was the standard in craftsmanship. Green’s story upended that – and the momentum took the brand to growth rarely seen in such a short period.
Later that year, the Uncle Nearest brand was born, and in 2017, it quickly gained traction, becoming one of America’sbreakout whiskey brands – across social, sales, and taste.
Since then, the brand has amassed an impressive collection of industry awards, including Cigar & Spirits Magazine’s”Top 5 Whiskies in the World”, “World’s Best” at Whisky Magazine’s World Whiskies Awards, and a Chairman’s Trophy at the Ultimate Beverage Challenge. By the end of 2024, the brand had a self-declared valuation of over $ 1 billion – marking its territory as a unicorn (a term used to signify $1 billion valuation of privately held startups). CEO Fawn Weaver’s 40% stake was valued at $480 million, good for No. 68 on Forbes’ Richest Self-Made Women list, as owner of the best-selling Black-owned and -led spirits brand of all time.
Operation #ClearTheShelves
Fawn Weaver responded on social media defiantly and confidently.
“Hit pieces? On Keith and me? Really? Wow. That’s… kinda cool.
And encouraged fans of the brand to keep buying.
“Operation Clear the Shelves is in full effect! Let our distributors and partners know: Uncle Nearest is stronger than ever. And PLEASE post on social media when you help us #ClearTheShelves and tag me so I can share.
She also referred to her book Love & Whiskey and her recommitted passion to getting this all resolved. Sharing that she is under a gag order, so she can’t mention any details – but can give her perspective.
The creditors want to keep Fawn Weaver on, but in the capacity of CMO. Weaver, is staking her claim that this is her business and she will not falter or buckle under the pressure of these headwinds.
What Is Goin On In The Liquor Industry?
The broader liquor industry is going through a lot of changes – particularly around consumption.
Alcohol consumption among U.S. adults has dropped to 54%, the lowest level ever recorded in Gallup’s nearly nine-decade-long tracking of Consumption Habits which began in 1939. For the first time, a majority of Americans say they believe that even moderate drinking is harmful to health.
While a lot of celebrity bourbons have been coming to market – from Steph Curry Gentlemen’s Cut, to Bob Dylan’sHeaven’s Door to Jamie Foxx’ Brown Sugar Bourbon, the other side of celebrity spirits have been filled with accusations of wrongdoing by distributors and partners in these ventures.
Sean “Diddy” Combs and Diageo, the company behind Diddy-backed brands Ciroc vodka and DeLeon tequila, got into a well publicized legal battle in 2024, killing their long-term relationship. Combs had accused Diageo of racial discrimination and neglect of his two brands, claiming the holding company treated them as “urban” products, limited their distribution, and limited promised investment. Diageo denied the allegations, but the parties ultimately reached a settlement. Combs withdrew his lawsuit and Diageo reclaimed sole ownership of b Cîroc and DeLeón.
Similarly, Jay-Z and Bacardi entered and resolved their legal dispute over the D’USSÉ cognac brand, with Bacardi buying out a majority of Jay-Z’s stake. After months of legal battles, Jay-Z retained his “significant ownership stake”. The dispute centered around the valuation of Jay-Z’s stake and allegations of mismanagement of the brand by Bacardi to drive down the value.
Both cases show scalable growth, but confirmation of that growth is hard to scale and navigate, and it’s even harder to validate sales.
Which Leads Back To Uncle Nearest
When does perception become reality? And is this lawsuit really a battle of perception?
One side is implying bad leadership while the other side is implying they are being falsely targeted, in part due to their rising success in a contracting market. With the conversation of mismanagement and receivership now firmly in place, the liquor category in decline and years of bookkeeping thrown intro question, is the lender simply trying to get their money before its too late? Or is this a case in which the perception of wrongdoing as a PR story will ultimately overtake the existing narrative of the Uncle Nearest brand, diluting their market share among the competitors in this class of spirits?
If social media is an indication, lots of people are following this story, as the most significant question has yet to be answered. As one of America’s best business origin stories in decades, will history repeat itself, causing Uncle Nearest to lose his whiskey empire – again? Or will this be a bump on the road to a legacy, that may one day, live as long as Jack Daniel’s.