Uncle Nearest could sell Cognac assets
A receiver is investigating the possibility of selling Uncle Nearest’s non-income-producing assets, including its vineyard in Cognac.
The saga began when Uncle Nearest’s lender, Farm Credit Mid-America, took the whiskey business to court for allegedly defaulting on multiple loans valued at US$100 million.
The court appointed a receiver on 22 August, with its founders Fawn and Keith Weaver forced to take a step back from managing the business.
The receiver, Phillip G Young Jr, has said he is “very encouraged about the long-term viability of the company” and believes “the company has significant value and can be reorganised, as a going concern, on a relatively quick timeline.”
Young Jr has established a 13-week budget for Uncle Nearest, showing revenues could cover expenses except for US$2.5m in extraordinary items. Farm Credit has agreed to fund the deficiency.
The receiver has also verified the company’s barrel inventory with Tennessee Distilling Group. In its original lawsuit, Farm Credit had alleged that the whiskey company had provided inflated barrel inventory reports.
The lawsuit also alleged that a former employee of Uncle Nearest had committed financial improprieties. The receiver believes there is validity to these claims, however he has found no evidence of misappropriation, theft or financial impropriety by the Weavers, the management team or any current employee.
After reviewing the business, the receiver made ‘significant’ cuts to the business’ operational expenditures, including reducing the workforce by 13% – equal to 12 employees.
Losing the Cognac brand
Young Jr is also evaluating non-income-producing properties owned by Uncle Nearest, specifically naming its estates in Cognac, France; Martha’s Vineyard, Massachusetts; and Bedford County, Tennessee.
While the receiver acknowledged that all of the properties had the potential to produce revenue in the future, given the business’ current cash position, he is considering which could be liquidated to satisfy existing debt.
Uncle Nearest revealed plans to expand into Cognac in October 2023. The company had acquired Domaine Saint Martin, which benefited from more than 100 acres of vineyard along the Charente River. It had planned to launch a Cognac brand in 2024.
The receiver travelled to Cognac to assess the company’s assets, which include intellectual property for the new brand. He believes it would cost an additional US$15m-US$25m to launch the brand. As Uncle Nearest “lacks the ability to make that investment at this time”, he has advised that these assets should be liquidated.
One offer and two additional inquiries have been received for these assets, with the receiver to file a motion to sell once the best offer has been established.
Young Jr is also evaluating the sale of an unnamed vodka business. Uncle Nearest acquired Square One Organic Spirits in May 2024, which was its first move into vodka.
He believes his goals as receiver can be achieved by the end of the first quarter of 2026.
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