This Week in Uncle Nearest News

 

The Uncle Nearest facility in Shelbyville, Tennessee.

My post last Friday, made in anticipation of the hearing in Knoxville federal court on Monday, received more than 10,000 views. For this blog, that's a lot. Many people are interested in this story. I will continue to follow it and may occasionally write about it, but there is much more thorough coverage out there. Here are some of the sources I use:

First, Uncle Nearest CEO Fawn Weaver, despite instructions from the court not to litigate the case in the media, continues to litigate the case in the media. Just use "Fawn Weaver" as your search term and you will be connected to all of the Fawn Weaver you can handle.

News outlets that have covered the story thoroughly include the Lexington Herald Leader and the Tennessean. Both require paid subscriptions but often their stories are available from aggregators such as MSN.com within a day or two of publication.

Two free news sites with in-depth coverage are the Moore County Observer and Shelbyville Now. Moore County is the home of Jack Daniel's. It is adjacent to Bedford County, whose seat is Shelbyville, where Uncle Nearest is located. Considering that these are small communities and these outlets mostly report on local government and high school sports, the depth and quality of their coverage has been remarkable. Because of Jack Daniel's and George Dickel, many people in those communities are sophisticated when it comes to the whiskey business. Add to that the splash Uncle Nearest made in its short time, in terms of local employment and generation of economic activity.

Finally, there is the Bourbon and Rye Club, a blog based in New Orleans, which illustrates its extensive coverage with witty AI-generated pictures of cats. 

Not much came out of Monday's hearing, in that the two questions before the court were simply kicked down the road a couple weeks. 

On Thursday evening, into Friday morning, Ms. Weaver posted three videos, each about three minutes long. I saw them on Facebook, but I believe they originated on Instagram. Everything she puts out is everywhere, so they should be easy to find. In them, she does exactly what the court has told her not to do, which is litigate the case in the media. They purport to summarize her testimony at Monday's hearing.

Unlike Ms. Weaver, the receiver, Phillip Young, has kept a low profile. You can, however, read the affidavit he submitted to the court which, as he says in the filing notice, contains everything he intended to say on Monday. The affidavit is 35 pages, plus exhibits. So, between Ms. Weaver's videos and Mr. Young's affidavit, you have the gist of what was presented Monday.

I offer all this because while I continue to follow the story with great interest I don't intend to duplicate or compete with the resources listed above. 

That said, let's jump ahead to some key facts and conclusions. According to the receiver's affidavit, Uncle Nearest's secured debt is $110M. Unsecured debt is $54M, so total debt is $164M. There is another $10M in something styled as a futures contract but it is, effectively, another debt, bringing the total to $174M. 

Since nothing is being paid, the interest on that $174M is accruing daily.

As for the business itself, revenue in 2024 was about $41M. It fell to $25M in 2025. The receiver reports that the company was losing about $1M a month, which has been reduced to $100,000 a month, but it still operates at a loss.

The receiver has two jobs, stabilize the business as much as possible and then either refinance the secured debt or sell the assets. As I outlined last week, the company's tangible assets, such as real estate and liquid inventory, in barrels and bottles, are not worth enough for their sale to cover even the secured debt for which they are collateral. 

To that end the receiver's team reached out to more than 100 entities and invited them to make an offer on either refinancing the secured debt or purchasing the assets. About 40 entities were interested enough to sign a non-disclosure agreement and kick the tires. Of these, twelve produced formal written letters of interest. No party offered a valuation in excess of the secured debt. 

As for what happens next, the receiver concludes that "a sale in the next six months is the only viable option to maximize the value of the Company and its assets."

Although Fawn Weaver no longer insists the company is worth $1.1B, her new claim is $500M. The receiver, of course, estimates that what the market is willing to pay is much less, substantially less than the $110M owed to Farm Credit. The basis for the difference is the value of the intangible asset, the Uncle Nearest brand. 

If the judge decides to end the receivership, control will not be returned to the Weavers, it can't be. That part of this story is already over. They have lost the company. It's gone. Farm Credit owns everything, which they will sell for whatever they can get, either altogether or in pieces. They may wind up with fifty cents on the dollar, if that. 

Tangible assets are the easy part. I'm not sure how a sale of the intangible assets will play out, but I find it hard to imagine any existing distilled spirits producer taking a gamble on keeping Uncle Nearest products in the marketplace. I can't foresee Fawn Weaver becoming a brand ambassador for Diageo, but maybe that's my failure of imagination.