Does the Uncle Nearest Whiskey Brand Have a Future?

The Nearest Green Distillery in Shelbyville, Tennessee.

There are many acts still to play out in the psychodrama the Uncle Nearest case has become, but I've been thinking about the endgame.

As a business, Uncle Nearest is a basket case. The value of the company's tangible assets is a fraction of its indebtedness. Whatever an asset sale brings in will go to the bank, which leaves nothing for other debtors, company principals, or investors.

The wildcard is the company's intangible asset, the Uncle Nearest brand. Its value is between nothing and infinity. The receiver is supposed to protect and preserve the value of all assets but especially that one, which is why there is a receivership and not a bankruptcy. 

Despite the receivership, the various expressions of Uncle Nearest Whiskey are still available for sale in liquor stores throughout the nation. As big as this story has been for those of us who follow these things, it is likely most Uncle Nearest customers are unaware of the turmoil, or only vaguely aware of it. Sales are off, as they are throughout the distilled spirits industry, but they have not cratered.

Therefore, there is an expectation that however this sorts out, and regardless of who winds up owning it, the production and sale of Uncle Nearest Whiskey will continue. Getting accurate sales figures is something the receiver has struggled with. Like everything else, the company's books are a mess, but a good estimate is about 150,000 cases a year. Traditionally, a brand isn't considered 'major' unless it sells at least one million cases a year, but most producers consider a brand 'viable' if it sells at least 20,000 cases, so 150,000 is substantial and, being still a young brand, it has growth potential. 

For comparison purposes, Jack Daniel's sells about 9M cases annually. Smirnoff vodka sells about 24M.

But at 150,000 cases, Uncle Nearest's business is too valuable to not keep going, right?

Maybe not.

Brands do die and disappear. Some are remembered; most aren't. Sunny Brook was one of the biggest bourbon brands pre-Prohibition. It's no longer sold and only serious history geeks have ever heard of it.

Does the Uncle Nearest brand have what it takes to continue and thrive under different ownership and leadership? That may well depend on deposed CEO Fawn Weaver. Can you imagine her going to work for Diageo or Suntory as a brand ambassador? Can the brand continue if she's not involved? What if she's hostile to the new owners? That's a definite possibility since she has already made statements about the brand being "stolen" from her.

Those are questions any potential buyer of the Uncle Nearest trademark will have to answer.

Consider Diageo's Bulleit Frontier Whiskey. It survived the controversy surrounding father and daughter brand ambassadors Tom and Hollis Bulleit with barely a ripple. Maybe that's because Diageo immediately cut all ties to the family. 'Bulleit' is now just a name on the bottle. The Bulleit family no longer has a role. It's not a perfect comparison because both Bulleits were already Diageo employees. They had no ownership stake.

All this got me thinking about Uncle Nearest himself, Nathan 'Nearest' Green, the formerly enslaved man who "taught Jack Daniel how to make whiskey."

A lot of the Uncle Nearest story is puffery. There's nothing wrong with that. Most brand stories are replete with puffery. Believe it or not, "puffery" is a legal term. It refers to "exaggerated or hyperbolic statements that are so clearly promotional and subjective that no ordinary person would take them as literal facts."

I like the Uncle Nearest story and hope the brand survives, but Nathan Green is significant only because Jack Daniel is significant. It is likely every American whiskey company with mid-19th century roots has an Uncle Nearest somewhere in its story. "Uncle" and "aunt" were permissible ways to respectfully refer to a Black man or woman, if you were white, at a time when referring to a Black man as "mister" could get you killed. 

In part, Nearest Green is important precisely because we know about him, so he stands in for the thousands of anonymous Black workers, enslaved or emancipated, who ran stills and made whiskey for white owners. 

We have few records that name the enslaved men and women who worked in distilleries. It's likely that when slavery was legal in all the English colonies, most distilleries used that labor force. The first major commercial distilled spirits industry in Colonial America was New England rum, made from molasses, a byproduct of sugar refining. It was shipped from Great Britain's Caribbean colonies to its colonies in New England. Virtually all of the labor in the Caribbean sugar colonies was enslaved. It's likely that carried over to the New England distilleries. Massachusetts didn't abolish slavery until 1783. 

Enslaved men and women who had special skills were often rented out by their owners. A skilled distiller would have been much in demand and would fetch a high price. As much as we romanticize it today, distilling in the 17th, 18th, and early 19th centuries was hard, hot, and dangerous. That's exactly the kind of work enslaved people did, the hard, hot, and dangerous kind.

This reality has long been a problem for whiskey marketers, many of whom use history (real or imagined) in their brand stories. Early Times Bourbon had a famous sign that hung in bars and liquor stores depicting a frontier distillery. They produced thousands of them, which you can find on eBay. It showed several workers doing various tasks. Every face was black. In later years, they produced the same design with white faces. In the final iteration the distillery scene was the same except with no people of any color. No workers were shown.

"But what about Uncle Nearest inventing the Lincoln County Process of charcoal filtering?" Sorry but, no. He didn't. That's part of the puffery. Charcoal filtering using maple wood charcoal was common practice in Tennessee and elsewhere before Nathan Green and Jack Daniel were even born.

"But doesn't it count for something that he was involved in starting a whiskey that became the most popular whiskey in the world?" Okay, sure, but Jack Daniel's didn't become the brand it is today because of Nathan Green, Jack Daniel, or Lem Motlow. It became hugely successful through the efforts of the company that bought it from the Motlow family in 1956, Brown-Forman.

At the time of that sale, Jack Daniel's was successful and growing, but it wasn't #1. That came much, much later.

What is unique is that the Green and Daniel/Motlow families had an ongoing relationship, into the present day, and although Green's story wasn't widely known outside of the Lynchburg community until 2016, it was always known there.

Most Uncle Nearest customers, like most whiskey consumers, don't know a lot about the brands they buy or the companies that produce them, and what they know or think they know may not be accurate. Most don't know, for example, that although there is a still at the Nearest Green Distillery in Shelbyville, no whiskey is made there. It's a real still that could make whiskey, but they never finished installing it. 

Most of the whiskey sold under the Uncle Nearest label is made at Tennessee Distilling Group (TDG), a contract distiller located about 40 miles west of Shelbyville in Columbia. TDG would love to keep making it, but they probably aren't willing or able to market and distribute it themselves, even if they obtained the rights. 

But maybe I'm wrong. Just last month, TDG bought an Irish whiskey distillery, Waterford, out of receivership.

So, if the Uncle Nearest brand survives and thrives, it won't be because of those legacies, it will be because a base of consumers have adopted the brand. If that adoption can be nurtured and expanded, then the brand has a future. If its stewards, whoever they turn out to be, succeed at that, then it has a chance. If they fail, it doesn't.

Telling Whiskey History in Tell City (Part 3)

 

Krogman made many different products post-Prohibition.

So well regarded was the Krogman name that, after Prohibition, a group of Tell City businesspeople decided to revive the distillery and its brands. Tell City had affection for the Krogman and Voelke families and felt Will and Claudina had been unfortunate victims of an even more unfortunate failed public policy. Moreover, the investors believed the Krogman name could still sell whiskey. They formed a corporation and issued stock. Ed Schultz was president; William Gerber was vice president. His son, Will Junior, was secretary and plant manager. The Krogman family was not involved. 

The distiller was John Striewe, Krogman’s pre-Prohibition distiller. The distillery was projected to consume 500 bushels of grain daily. They announced willingness to buy 2,000 bushels of apples per day in the fall for brandy. 

Because of the robbery and fire, there wasn’t much left of the plant in 1933. It took $130,000 to rebuild and get distilling going in December of 1934. Another $40,000 was spent the next year to build a new 15,000-barrel maturation warehouse. They produced 55 barrels of whiskey a day and used 520 bushels of grain to do it. The brandy business never quite materialized. In the end they put in about $300,000 (about $6.5M today).

In fall of 1935, Krogman released its first bourbons. Obviously, they were very young. Lincoln Trail was 8 months old and 100° proof, Brushy Fork was 8 months old and 93° proof, Duchess was 6 months old and 90° proof, Deer Creek was 4 months old and 93° proof, and Millstone was 4 months old and 90° proof. Those last two, Deer Creek and Millstone, were aged in half barrels (24 gallons) in heated warehouses, an experiment in rapid aging. 

Selling whiskey at such young ages was not unusual in the immediate aftermath of Prohibition. People wanted something to drink, were happy to get it, and the distillers needed income. The nuances of aging and proof in the portfolio suggest a customer base that understood the significance of each. These were inexpensive whiskeys aimed at savvy but cost-conscious consumers. They could have drunk vodka or gin, but they preferred whiskey. Properly made four-month-old bourbon was still better than vodka, in the estimation of Kroman's customers.

Krogman distilled on-and-off for about three years. After that, selling the whiskey in its warehouses as it matured kept the company nominally in business until 1941, when it was sold to a national company. The Tell City News tried to put the best possible face on the local ownership’s failure. The sale, “will probably prove to be beneficial for the city of Tell City,” it opined. “The plant has not been running for several years and very little labor has been employed.” They reported that the new owners promised to operate the plant and “employ local labor as much as possible.” 

The journal could not, however, gloss over the fact that, “from the standpoint of investors who put up money to build and start this plant in Tell City, this move will not be so good for they will lose much of their original investment but from the standpoint of the city generally, there is little doubt but that it will be a benefit.”

Mostly, the local newspaper was just happy “our little plant” would be “in the hands of a reputable concern.”

Not so fast.

Joseph Park and John Mason Tilford opened a small grocery store in New York City in 1840. They built it into a large, successful chain of stores that sold wine and liquor as well as groceries and tobacco products, especially cigars. Their sons succeeded them in the business. 

The loss of alcohol sales hit the company hard when Prohibition took effect; that left cigars as their big moneymaker. 

In 1923, Park and Tilford was sold to David A. Schulte, a competitor in the cigar trade. Cigars were still a huge business despite growing competition from cigarettes. Schulte considered Park and Tilford “the best retail merchandising name in the country.” He merged the two companies under the Park and Tilford brand and kept most of the existing organization in place. He even married the widow of the company’s treasurer. 

Park and Tilford became Schulte’s vehicle for acquisitions in medicinal alcohol and fragrances, two Prohibition loopholes he exploited. 

In 1925, Schulte bought Pennsylvania’s Old Overholt Distillery. The seller was U.S. Treasury Secretary Andrew Mellon, who had been partners in the distillery with Henry Clay Frick. Best known as a steel industrialist, Frick happened to be Abraham Overholt’s grandson. Mellon was Frick’s banker and had owned the distillery outright since Frick’s death. He gave it one of the six medicinal whiskey licenses, but since the Treasury was responsible for Prohibition enforcement, it didn’t look good for the Secretary to own a distillery, even a legal one, so he sold it to Schulte.

Well, it looks like this is at least a four-parter. More to come.

Telling Whiskey History in Tell City (Part 2)

 

Krogman's jugs are a popular collectible in the Tell City area.

Will Krogman married Claudina Voelke, whose father owned Tell City's largest brewery. When Claudina’s parents died, the Krogmans moved into her family’s mansion on the grounds of the old brewery. Their elder daughter, Willie, was 21 but still living with them. Their Etta was just 13.

They tore down the brewery, landscaped the grounds, and renovated the house. It was heralded as “one of Tell City’s handsomest residences, on a site of commanding elevation.” 

In 1911, the year Will and Claudina moved into their renovated mansion, a Tell City man was feuding with his neighbors about some chickens. He shot and killed one of the neighbors, was convicted of murder, and sentenced to life in prison. His victim’s family claimed the murderer was drunk on Krogman’s Whiskey when he committed the crime. They sued Krogman for $10,000. 

After several tries, in an atmosphere of growing hostility to alcohol, the family found a jury willing to award them $7,000 (about $140,000 today). That award was set aside by a subsequent trial, where Krogman prevailed. The victim's family appealed that decision to the Appellate Court of Indiana, which also ruled in Krogman’s favor. The ordeal dragged on for seven years.

Then things got worse for Will Krogman. On the heels of the lawsuit’s resolution, Indiana Prohibition shuttered his distillery, two years before national Prohibition. Most of Will’s capital was tied up in his plant and the whiskey aging in his warehouses. Was all that now worthless? 

‘Medicinal sales’ were somewhere in the future, but the feds were dunning him for unpaid excise tax now. How did they expect him to pay his taxes if he couldn’t sell his whiskey? Will was desperate. He decided his whiskey should be liberated. He knew he could sell it if he could just get his hands on it. 

To that end, he got together four pals and planned a heist. The warehouse had been hit several times already, mostly by kids stealing a gallon or two. Will and his crew worked on their plan for a year. They would make it look like the previous, legitimate robberies, then torch the warehouse to conceal the crime. 

They got away with about 800 gallons. They had buyers ready and expected to net about $20,000. Everyone would get their cut and go their separate ways. That was the plan.

But the fire didn’t take. The Fire Chief could tell it was an inside job. The first people they caught took deals and ratted out everyone else. Eighteen individuals were arrested, including Will Krogman. They were tried together in federal court in Indianapolis. 

Coincidentally, 800 gallons worked out to 18 barrels of whiskey, one for each defendant. All pled guilty. Their sentences ranged from a few months in county to a year or more in the federal lock-up in Atlanta, where Al Capone, George Remus, and other Prohibition criminals did time. Will Krogman got two years in Atlanta and was fined $2,000.

At trial, one of Will’s confederates, a fellow from Chicago, testified that Will offered to ‘sell’ him whiskey for $12 a gallon, all he had to do was go get it. That was the caper. Will diagramed everything and assured the Chicagoan he could take the whiskey out of the warehouse and the Treasury agents guarding the place would not interfere. (They didn’t.) 

As Will directed, whiskey was siphoned from barrels into jugs, which were passed through a drainpipe to other “whiskey gangsters” outside, who loaded the jugs into cars, then onto boats on the Ohio River, to be transported to Evansville, the bigger town fifty miles downstream. About 15 gallons stayed behind in Tell City, hidden at a baseball park.

In addition to Will Krogman, several other upstanding citizens were convicted, including the manager of an Evansville hotel, the secretary of that city’s parks board, and two former sheriffs. 

After the trial, Will tried to run. He left Tell City but was caught in Louisville and hauled back to Indianapolis for sentencing.

When Will was released from Atlanta he was 61. He and Claudina traveled a bit, settling for a time near Brownsville, Texas, where they grew citrus fruit. Krogman’s conviction didn’t hurt his social standing in Tell City. Local journals continued to report the couple’s coming and going in the society columns. They returned to Tell City for good in 1930. He died two years later, while visiting Etta in Illinois. Claudina died in 1937, while visiting Willie in Ohio.

Although the Krogmans themselves were gone, Krogram's Distillery continued or, rather, returned after Prohibition. Next time, in Part 3, the revival and ultimate demise of Krogman's.

Telling Whiskey History in Tell City (Part 1)

The Krogman Distillery in Tell City, Indiana, post-Prohibition.

Matt Colglazier is Chief Merchandising Officer at Big Red Liquors, a chain of retail liquor stores with 103 locations throughout Indiana. 

If you know the name "Krogman's," it's probably from a side project Colglazier did in 2019, called Krogman's Old Master. Although the website is still there, the whiskey is long gone. Here's the story.

"Born in Tell City, Indiana, this pre-prohibition brand is back and better than ever! Two 90 proof expressions of bourbon and rye, along with the most unique single barrel offering in the country. Bottling nine different MGP mashbills as non-chill filtered, cask strength, single barrels, which are individually selected, and each given a unique nickname. Collect them all, and taste every recipe from one of the world’s premier whiskey distilleries. Hand-bottled in Bloomington, Indiana. No BS, just full disclosure barrel proof, single barrel all day long!"

An original bottle of Krogman's Old Master Bourbon.

It was an all-Indiana project. The MGP distillery, now sometimes known as Ross & Squibb, is in Lawrenceburg, on the Ohio River at the Ohio border, just west of Cincinnati. Bloomington, where it was bottled, is about 100 miles due west of Lawrenceburg. Tell City is on the Ohio River too, about 100 miles south of Bloomington. The Lawrenceburg to Tell City route is the hypotenuse of the triangle.

But there is more to the Tell City and Krogman's story. Much more.

In 1856, a group of German-speaking Swiss immigrants met in Cincinnati to organize the Swiss Colonization Society. They acquired 4,000 acres on the Ohio River between Louisville and Owensboro in Perry County, Indiana. They named it Tell City, after the mythological Swiss hero, William Tell. 

They considered sites in Kentucky and Missouri but rejected both because of slavery. “None of our colony would ever forget the sacred principles of Republicanism so far as to make use of such a privilege,” as one society member put it.

The plan was to quickly develop an industrial infrastructure, “organized more for the common benefit of the poorer class of our countrymen, which consists mostly of intelligent mechanics and farmers," according to official documents. It became a manufacturing center, mostly for furniture. Although the company that made them folded in 2011, solid maple Tell City chairs remain popular. 

There were breweries and distilleries in Tell City almost from the beginning but the biggest and most important one was August Krogman's. 

Not everyone in Tell City was Swiss. Krogman was from Holstein, in what was then the German Confederation, where he learned brewing and distilling. There had always been German immigrants in the Americas, but the trickle turned into a torrent after the unrest of 1848. Krogman came in 1855, at age 34. He worked at a brewery in Iowa before moving to southern Indiana.

Throughout that part of the state, coal seams are very close to the surface and easy to mine. Many farmers in the region also mined coal. Krogman was one of them and used those profits to start his distillery.

Like many, Krogman's distillery made bourbon whiskey but also apple and peach brandy. August ran the distillery successfully until his death in 1905 at the age of 84. His son, William ‘Will’ Krogman, took over and ran it until Prohibition. 

Will started out strong. He owned Tell City’s biggest distillery, and his father-in-law was the city’s biggest brewer. 

But Prohibition was in the wind and Will's problems began even before the drought, next time, in Part 2.

How Likely Is a Brown-Forman, Pernod Ricard Merger?

 

A rolling billboard for Old Forester and other Brown-Forman
brands at the company headquarters and distillery
on Dixie Highway in Louisville (1936).

Today Bloomberg and Reuters, two generally reliable news sources, reported that Brown-Forman and Pernod Ricard are in talks about a merger of some sort. The reports are based on anonymous sources and neither company has confirmed anything, but the story is being widely reported with headlines like this one from the Lexington Herald-Leader. "Reports: Kentucky whiskey company Brown-Forman, Pernod Ricard in merger talks."

This pops up whenever there is upheaval in the distilled spirits industry. On paper, Brown-Forman looks like a great acquisition. It has one superior brand and a couple of pretty good ones, primarily in the American whiskey space. It's a well-run company, profitable, and not overloaded with debt. 

Pernod Ricard is the world's #2 distilled spirits company after Diageo, with annual gross sales of $12.3B. It owns Absolut Vodka, Jameson Irish Whiskey, Chivas Regal Scotch, Martell Cognac, Havana Club Rum, and a bunch of others. Though well-endowed with Scotch and Irish whiskey, it is light on American whiskey, although it owns a few craft producers such as Kentucky's Jefferson's and Rabbit Hole, West Virginia's Smooth Ambler, and Fort Worth's Firestone & Robertson, which produces the TX Whiskey brand.

Usually when these Brown-Forman merger rumors appear the finger is pointed at Bacardi, sometimes Diageo. 

Is Brown-Forman in play? Probably not, inasmuch as these rumors have always fizzled in the past. Although publicly traded, Brown-Forman is still controlled by the Brown family. They're generally happy with things the way they are. It would be very hard, perhaps impossible, for a determined suitor to force a sale.

I've always heard that the Brown family doesn't like the Bacardi family, which is why that tie-up always falters. I don't know how they feel about the Ricard family.

An observation: When I made the "Made and Bottled in Kentucky" documentary, I mentioned in the script that Brown-Forman was then "a three-billion dollar company." If I remember correctly, that was their gross sales for the previous year. That was 30+ years ago. Brown-Forman's gross sales for 2024 were $5.32B. Considering inflation, the company may actually be smaller today. That may tell you more about the distilled spirits business than it does about one particular company.

By contrast, Brown-Forman's principal rival in the American whiskey space, Suntory, is much bigger than Jim Beam Brands was 30 years ago, but they have grown by acquisitions more so than by growing their core business. Brown-Forman has bought some brands over the years, but I don't think they've bought a rival company since the 1950s, when they bought Jack Daniel's. 

Booze is a good business but it's not AI. There's not a lot of potential for growth. The market generally dislikes diversification so that leaves acquisition as the only path to growth, and the liquor business seems to be hard on its #2. When Diageo passed Seagram's as #1 at the end of the 20th century, Seagram's went out of business.

One peculiarity of the American whiskey business is that the four largest distillers, who together make about seventy percent of America's whiskey, are all closely held. Some of Brown-Forman's stock is publicly traded. The other three, Suntory, Sazerac, and Heaven Hill, are entirely family owned. In all three cases, the principal shareholder is a man in his 80s. 

Stay tuned.

UPDATE: Late today, after this posted, Brown-Forman confirmed that it is exploring "a merger of equals" with Pernod.

Pride Goeth Before the Fall

 

Fawn Weaver and company, startled by the Harold Washington
animatronic at the DuSable Museum in Chicago, June 25, 2024.

The Uncle Nearest saga began eight years to the day before the above picture was taken.

That was when Clay Risen revealed Nathan 'Nearest' Green's story to the world, or at least to readers of the New York Times, in an article headlined "Jack Daniel’s Embraces a Hidden Ingredient: Help From a Slave."

Fawn Weaver credits that article with inspiring her to create the Uncle Nearest whiskey brand. These days, she and the brand are in a heap of trouble.

Eight years is a good age for American straight whiskey. At least to my taste, eight to twelve years is the sweet spot for whiskey aged in new, charred oak, which bourbon and whiskeys like it must be.

But I digress.

To build a premium whiskey brand from nothing to approximately 150-thousand cases a year seems like a remarkable accomplishment, especially for someone with no previous industry experience and little more than a good story. The liquid, though perfectly fine for what it is, is not extraordinary. That's not why people buy it. It's the story or, I should say, stories, Green's but also Weaver's. 

They are inextricably linked.

From the beginning, I've been impressed by Weaver. She seemed to make all the right moves and experience nothing but success. Seeing her perform in person, during her 2024 book tour, just increased my estimation, even though by then I had heard troubling rumors that all in Tennessee was not as it appeared.

But, in person, Weaver absolutely owns the room. She's dazzling. She casts a spell and makes you want to believe. She held her own last night and two weeks ago on ABC's "Shark Tank" TV show. (Both episodes were recorded last summer, before the current troubles.) 

There have been many facts and counter-facts floating around. Weaver is all over social media but the receiver and the bank she owes $100M+ to only speak through their filings with the U.S. District Court for the Eastern District of Tennessee, where Case No. 4:25-cv-38 is being adjudicated.

Let's focus on that $100M number, which is closer to $200M when you add the unsecured creditors. I have it on good authority that she raised a similar amount, about $200M, from investors. Suddenly, that 150-thousand cases per year after eight years doesn't seem so impressive, if they spent $400M to get there. For all intents and purposes, the company is broke. Like everything else, the value of its tangible assets is in dispute, but it's way south of $100M, let alone $400M.

Even more disputed is the value of its intangible assets, specifically the Uncle Nearest brand, which ranges from zero to infinity.

My previous post on this subject was a reaction to those who assume the whole thing was a scam from the beginning. If it was, it was a poor job, because that money appears to be gone and not in anybody's pocket. Judge Charles Atchley Jr., who is presiding over the case, used the "out over your skis" idiom at one point. Based on everything we know, that seems as good an explanation as any. 

Judge Atchley is expected to rule soon on Weaver's motion to end the receivership and the receiver's motion to add seven other Weaver businesses to the package.  

Weaver's latest gambit, filing bankruptcy for a company she no longer controls, which didn't last 48 hours, and also filing a defamation suit against the bank which, even though she is a Californian whose company is in Tennessee and the bank she's suing is in Kentucky, she filed in New York. It all just seems weird at this point, like she's grasping at straws. 

Self-confidence will only take you so far. 

Don't Judge Uncle Nearest Too Harshly

 

The Uncle Nearest Distillery in Shelbyville, Tennessee.

I'd like to take a moment to offer some perspective on the Uncle Nearest situation. This is especially for folks who jumped to the conclusion that it was a scam from jump.

FAT Brands is a global franchising company in the fast-casual, quick-service, casual dining, and polished casual dining segments. Some of their better-known brands are Fatburger, Johnny Rockets, Ponderosa and Bonanza. (Those last two are revivals of brands from the 60s.)

FAT is bankrupt and their debt is so big, even debtors who thought they were safe may be impacted.

According to Bloomberg, FAT has $1.4 billion in bonds supported by just $40 million in annual earnings. Like Hooters and T.G.I. Fridays before it, FAT pledged virtually all its earnings to a debt structure that became too much to bear.

It's not the same as Uncle Nearest, of course, but in both cases the scheme fell apart when the market for the company's products suddenly changed, and they didn't have enough wiggle room in their financing to adapt.

That doesn't change anything. I'm just saying many businesses are a house of cards in the sense that a sudden change beyond their control can bring it all crashing down.