Uncle Nearest receiver claims lender ‘ignored red flags’
The receiver for Uncle Nearest has filed a counterclaim against Farm Credit Mid-America, arguing that the lender’s failures helped the alleged fraud remain under the radar for years.
Phillip Young Jr, the court-appointed receiver for Uncle Nearest, issued a counterclaim against Kentucky lender Farm Credit Mid-America this week as the latest filing in a dispute that began last year.
Farm Credit sued Uncle Nearest last summer, alleging the Tennessee whiskey producer defaulted on loans worth more than US$108 million.
Young, who became receiver for the brand in August, claims that Farm Credit failed to exercise the level of oversight expected of a lender administering a credit facility.
The brand’s founders, Fawn and Keith Weaver, filed a lawsuit against its former chief financial officer (CFO), Michael Senzaki, in January this year. They claim that he manipulated financial records, inflated inventory values, forged corporate documents and concealed millions of dollars in liabilities while overseeing the company’s finances.
The new counterclaim alleges that Senzaki admitted to investigators that he falsified financial reports beginning in 2022 and concealed the company’s true financial condition while serving as Farm Credit’s main contact until he left the business in October 2024.
As such, the filing says that Farm Credit ‘failed to implement verification procedures that any competent lender would employ’, and had processed loans without question.
The receiver claims Farm Credit collected fees while “ignoring the red flags that should have prompted investigation rather than expansion”, and allowed Senzaki’s alleged misconduct to “continue undetected for years”.
According to the filing, between July 2022 and August 2023, Farm Credit approved 28 separate draw requests totalling nearly US$67m. The receiver alleges that every request was submitted by Senzaki without consent from Uncle Nearest CEO Fawn Weaver.
‘Overlook obvious irregularities’
The counterclaim stated: “Farm Credit’s willingness to overlook obvious irregularities, including the sole-signatory status of all 28 drawdown requests, allowed Mr Senzaki to expand the credit facility by more than US$30 million and to conceal the true state of the counter-plaintiffs’ obligations until the fraud became impossible to hide.”
The receiver claims Farm Credit earned approximately US$400,000 in amendment and origination fees as the revolving facility expanded from US$35m to nearly US$67m in less than a year.
“The more Mr Senzaki borrowed, the more Farm Credit earned in fees. This misalignment of incentives helps explain why Farm Credit was willing to abandon standard verification procedures,” the document said.
In addition, the counterclaim added that Farm Credit “repeatedly increased the revolving credit facility tied to aged whiskey barrels, bottled goods, and grain” rather than increasing the real estate loan secured by the distillery property, which had growing value.
It noted that the cost of the Nearest Green distillery build was approximately US$50m and a loan linked to the site’s value “would not have gone into technical default”.
‘Amplified harm to Uncle Nearest’
The receiver noted: “Farm Credit’s failure to align the financing structure with the reality of the distillery project amplified the harm to Uncle Nearest.”
The counterclaim said Farm Credit “breached its duty of care” in several ways, including its failure to verify the accuracy of Senzaki’s submitted inventory reports and its continued processing of the CFO’s requests despite the lender’s own inspection revealing that the borrowing base had been overstated by approximately US$21m.
The Spirits Business has approached Farm Credit Mid-America for comment.
The counterclaim comes as the receiver continues its efforts to sell Uncle Nearest’s assets. Last month, Young revealed he had signed a non-binding letter of intent with a confidential investment firm that has African-American ownership.
The assets include the Uncle Nearest brand and the Nearest Green Distillery, but exclude the assets of Grant Sidney – an associated entity also run by Fawn Weaver – as well as a property in Massachusetts and one in Cognac.
The receiver had lined up inquiries for the Cognac property separately in October 2025.
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