Judge sets fast briefing schedule on bid to delay Uncle Nearest asset sale

A federal judge has set an accelerated schedule for a lender and a court-appointed receiver to respond to Uncle Nearest founder Fawn Weaver’s request to delay any final sale of the whiskey company’s main assets while she appeals the ruling that kept the business in receivership.

In an order issued Thursday, U.S. District Judge Charles E. Atchley Jr. directed receiver Phillip G. Young Jr. and lender Farm Credit Mid-America to file their response by 11 a.m. Central on Monday, Oct. 19. Weaver may file a reply by 4 p.m. Central on Wednesday, Oct. 21. The order, first reported by the Moore County Observer and cited by Yahoo Finance, does not stop the sale process and does not decide whether Weaver’s request will be granted.

The dispute comes at a critical point for Uncle Nearest, the Tennessee whiskey company founded by Weaver. In an Oct. 9 court filing, Young said he was close to signing a purchase agreement for the company’s assets. According to Weaver’s attorneys, the proposed transaction could lead most of the companies under Young’s control to file for Chapter 11 bankruptcy, with the sale then completed through bankruptcy court.

Weaver is asking the court to prevent the receiver from closing a sale of substantially all assets of Uncle Nearest Inc., Nearest Green Distillery Inc. and Uncle Nearest Real Estate Holdings LLC before her appeal is resolved. Her request would not stop negotiations with buyers, marketing of the assets or efforts to seek court approval. It would also still allow bankruptcy filings. The specific limit she wants is narrower: she wants the receiver barred from finalizing the sale before the appeal is decided.

Judge Atchley, however, signaled skepticism about the urgency of Weaver’s request. In the order, he questioned why an emergency ruling was needed when six days had passed between Young’s filing saying a deal was near and Weaver’s motion seeking immediate relief. According to the Moore County Observer’s account of the order, Atchley wrote that Weaver’s motion did not provide details showing that such an unusually fast ruling was necessary or appropriate.

The underlying appeal focuses on Atchley’s May 26 decision not to end the receivership. On Oct. 2, the U.S. Court of Appeals for the Sixth Circuit rejected Young’s attempt to have that appeal dismissed, allowing the case to move forward. That ruling did not address the merits of Weaver’s argument, but it kept alive her challenge to the receivership order. Under the appellate schedule, Weaver’s opening brief is due Nov. 12, and the opposing briefs are due Dec. 11.

Court filings cited in the report say three potential buyers have been in discussions over Uncle Nearest’s assets. Those same filings say bankruptcy lawyers have also been preparing for a possible Chapter 11 sale. A prior prospective buyer did not complete a transaction before an exclusive negotiation period expired.

The battle over the company’s future now centers on whether the receiver should be free to close a deal before the appeals court reviews the case. Weaver’s position is that once a sale is completed, especially through bankruptcy, the appeal could become harder to unwind in practical terms. The receiver’s side has not yet filed its response to that argument under the new court schedule.

Weaver has also made a separate request involving Grant Sidney Inc., a company she says she leads as chief executive and owns outright. In her court papers, she asked the court to remove Grant Sidney from the receivership. According to the filing, Grant Sidney is Uncle Nearest’s largest shareholder and is owed about $3.69 million by the whiskey company.

Weaver argues that the receiver’s September report suggests Grant Sidney is unlikely to hold significant assets belonging to Uncle Nearest’s estate. Based on that, she says there is no need to keep Grant Sidney in the receivership and that any remaining inquiry into the company could continue through subpoenas and record requests. As an alternative, she has asked the court to pause the receivership order as it applies to Grant Sidney while her appeal proceeds. That request would not end the receivership over Uncle Nearest itself. The court has not yet ruled on that issue.

The case is being watched closely in the spirits business because Uncle Nearest has been one of the more visible American whiskey brands of the past decade. A forced sale or bankruptcy-led restructuring could have consequences for creditors, distributors and other commercial partners tied to the company. It could also affect how other alcohol producers, lenders and investors assess risk around expansion, brand financing and control of assets when a business runs into financial stress.

For now, the immediate issue before the court is limited. Judge Atchley has asked for written arguments, but he has not scheduled a hearing and has not indicated when he may rule on Weaver’s request to delay a sale. Until the court says otherwise, the receiver can continue moving toward a transaction while the appeal and related motions proceed on separate tracks.