Judge: Uncle Nearest Better at Spending Money Than Making It

No matter how you slice it, Uncle Nearest Inc. was and still is insolvent, U.S. District Judge Charles Atchley Jr., who is overseeing the receivership case initiated by Farm Credit Mid-America against the distiller, said.

Farm Credit initiated the action because it wasn't being repaid on a loan, and it feared Uncle Nearest's assets were being frittered away.

fearedWeaver, who founded the brand and company, and her husband have tried several different ways to end the receivership and regain control of Uncle Nearest without success.

“The prohlem the Weavers and Grant Sidney face that is that pre-receivership actual cash flow data tells the same story as the forecasts: Uncle Nearest—under Fawn Weaver’s control—was far better at spending money than making it," the judge wrote in the 62-page order.

A number of cash flow forecast prepared for the Weavers showed significant losses and the distillery's actual operations confirmed that. How bad was the result? Uncle Nearest was losing around $533,00 a week at one point.

Between the week ending April 18, 2025, and the week ending June 13, 2025, Uncle Nearest’s “Cumulative Net Operating Cash Flow” was a negative $1,214,994. "Put another way, this means Uncle Nearest’s operations were costing the company $134,999 every week on average rather than generating any excess cash," the order notes.. "This lackluster performance, combined with the generally negative outlook of Uncle Nearest’s pre-receivership cash flow forecasts, leads the Court to conclude that Uncle Nearest was cash flow insolvent prior to the receivership.

While cash flow has improved considerably, the company is still losing money – around $11,000 a week but still losting – and it doesn’t have to pay debt service right now.

How Much Is Uncle Nearest Worth as a Business?

As part of their attempt to regain control of the company, the Weavers argued that company's balance sheet was positive – a claim Judge Atchley swiftly rejected. The Weavers noted that spirits brands sold by celebrities five to 10 years ago fetched a multiple of 12 to 13 times sales. But the court reject that measure, noting that conditions today are substantially different.

Atchley noted that the Receiver had attempted to solicit bids, the Reciever concluded that the most accurate value was probably in the range of 2 to 4 times sales. Farm Credit said several recent sales of spirits companies were at revenue multipliers of 1.3 to 4.5 times.

The court adopted a 2 to 5 times revenue multiplier which results in an enterprise value of $50 million to $125 million. Since Unclue Nearest's liabilities total $208 million, Uncle Nearest is insolvent on an enterprise value basis, the judge said – and on an asset addition basis.

The court rejected a letter from a whisky broker as to the value of whiskey in barrels. But a letter can't be cross-examined and so the judge rejected it as hearsay. This left only Fawn Weaver's testimony as to value of whiskey in barrels.

Testimony Not Credible

"This presents a problem for the Weavers and Grant Sidney Inc.," Weaver's holding company through which she owned about 30% of Uncle Nearest shares, the judge wrote, "because the Court does not find Fawn Weaver to be a credible witness."

The judge added that he had "the firm conviction that Fawn Weaver’s testimony thus far—whether on the witness stand or through her many declarations—has been guided by the story she believes best serves her personal interests, irrespective of its relation to the truth."

He also rejected charges by the Weavers that the receivership had hurt the company. Yes, the judge agreed,"  Sales have declined, but the Receiver has reduced Uncle Nearest’s monthly losses from approximately $1 million per month to roughly $100,000 per month, exclusive of receivership fees." He also “has cut Uncle Nearest’s monthly operating losses by 90% even in the face of declining sales.”