The financial crisis facing award-winning whiskey brand Uncle Nearest is dire, according to the court-appointed receiver who is warning the company could shut down within a month if emergency funding dries up.
According to court filings, attorney Phillip G. Young Jr., who was appointed to oversee the company after it defaulted on more than $108 million in loans, has declared the business insolvent. That means the company does not currently have enough assets to cover its liabilities.
Young now controls key assets tied to the brand, including its Shelbyville distillery, real estate holdings, intellectual property, and affiliated ventures. The company had unfiled federal income tax returns dating back to 2018 and financial records that were deemed unreliable and difficult to verify, the Moore County Observer reported.
In a recent report to a federal court, Young said the company is barely hanging on and that without continued financial support from lenders, operations could cease within 30 days. The brand’s most recent quarterly numbers show nearly $5 million in operating collections against $3.46 million in expenses, along with an additional $1.66 million in receivership-related professional fees. That leaves a small cash flow of just over $100,000.
For now, the company is staying afloat thanks to roughly $3.8 million in cash infusions from lenders, including Farm Credit Mid-America, along with aggressive cost-cutting measures. But the company is not paying long-term or pre-receivership debt. According to Young, if those obligations were being met, normal operations could not continue.
The workforce has reportedly been cut by 38 percent, including management positions.
Despite all of this, Young believes the brand retains value, but only if there’s enough time to restructure or sell it. Plans are underway to liquidate non-essential assets, including a Martha’s Vineyard property, and explore potential buyers for international holdings in Cognac, France. The goal is to complete a sale of the business or its assets by the end of the second quarter.
Founded by Fawn Weaver and her husband Keith Weaver, Uncle Nearest rose to prominence as a culturally significant spirits brand honoring the legacy of Nearest Green, the first known African-American master distiller.
