Welcome back to the BevNET spirits newsletter. This week we’re unpacking the latest news on Uncle Nearest as its founder tries to take back the troubled bourbon brand. 

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Thanks for reading. 

-BevNET spirits editor, Ferron Salniker

Despite efforts by its founder to take back Uncle Nearest Premium Whiskey, the troubled bourbon brand will remain under control of a court-appointed receiver for at least another month. 

To catch you up:

• Founded in 2016, Uncle Nearest – a brand founded by Fawn Weaver and named for an enslaved whiskey distiller who taught the craft to Jack Daniel – has claimed to be one of the fastest-growing bourbon companies in history. 
• That story came to a halt when Uncle Nearest went under the control of the receiver in August, after a lender alleged that the company had failed to meet its financial obligations for more than a year, resulting in debts totaling an estimated $100 million. 

Since then the receiver has attempted to rebuild financial records, and has painted a picture of a company in even worse shape, including millions more in unsecured debt and unfiled tax returns.

• He argues that the only path forward for the “insolvent” company is a sale or total refinancing, but says he’s been unable to find a party to take on the debt or a viable offer from a buyer.

Other businesses owned by the Weavers are also at stake, after the lender asked for the inclusion of 10 entities in the scope of the receivership.

Weaver and her husband Keith Weaver have fought in court to end the receivership, arguing that:

• Young’s claims are unsupported, and that the receivership is causing “irreversible harm” to the brand’s sales and value – and that the company is cash flow positive if the receiver’s fees (now up to $2M) are excluded. 
• They claim the company’s assets alone exceed the lender’s debt, and that the business is worth over $500 million based on a multiple of 12.9x (justifying that calculation could prove tricky when Four Roses just sold to Gallo for a much smaller multiple). 

Documents and affidavits disputing each party’s claims have been flying, but still exclude what would be most interesting – a balance sheet! In court this week, witnesses, the receiver and Weaver took the stand. The judge granted the parties until February 26 to submit supplemental briefs, with a deadline of March 5 to respond to those briefs. As long as the receiver is in charge, that puts a stay on potential lawsuits from investors and anxious creditors. 

After laying off more than 1,700 employees as it shuttered operations in California last year, Republic National Distributing Company (RNDC) is making further cuts across the country. 

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Have a tip to share? Reach out to Ferron Salniker, spirits editor at fsalniker@bevnet.com

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