A US judge has ruled efforts to sell most of Uncle Nearest’s assets can continue, after rejecting a bid by the group’s former CEO to stop the process.
Fawn Weaver had filed a motion for a preliminary injunction to stop the sale of most of the company’s assets earlier this month.
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Uncle Nearest has been under court-appointed receivership for more than a year, after US agri lender Farm Credit Mid-America filed a complaint in Tennessee alleging a default on loans and misreporting of barrel counts.
Weaver was fired from her position at the company in July, alongside her husband and co-founder Keith Weaver.
Earlier this month, a quarterly report from the group’s receiver Phillip G. Young Jr. confirmed talks on the sale of most of Uncle Nearest’s assets were ongoing after a transaction with an unnamed buyer failed to materialise.
Weaver filed her motion after that report was filed. The injunction looked to prevent the receiver and Farm Credit Mid-America from “a sale, transfer, or other disposition of substantially all assets of” Uncle Nearest, according to a court document lodged on Friday (23 October).
In the filing, shared by local publication Moore County Observer, US District Judge Charles E. Atchley Jr. denied Weaver’s motion, saying the court concluded Weaver “is not entitled to a preliminary injunction at this time”.
The judge said Weaver “has not demonstrated that she is likely to succeed on the merits or sustain irreparable harm in the future”, adding: “Moreover, while the court finds the public interest in the issuance of the requested injunction to be neutral, it is certain that creditors and receiver would be harmed by the requested injunction.”
A court filing in June said receiver Phillip G. Young Jr. had entered a non-binding letter of intent with an unnamed investment firm to sell “substantially all” of Uncle Nearest’s assets.
However, Young’s fifth quarterly report, filed with a court in Tennessee this month, said that entity “failed to consummate a transaction prior to the expiration of the exclusivity period”.
The filing, seen by Just Drinks, said so far, “no buyer has yet signed an asset purchase agreement” but talks are ongoing with three unnamed parties.
“Those sale discussions continue and the receiver believes he is close to a sale of substantially all assets,” the document added.
If a deal is reached to sell Uncle Nearest’s assets, Young plans to carry it out through a Chapter 11 bankruptcy process.
Judge Atchley’s order from Friday said notice and a hearing would be required if the receiver begins a Chapter 11 process, and Weaver would “qualify as ‘a party of interest’ who could object to such a sale at the hearing”.
In his quarterly report earlier this month, Young said all three potential buyers had “expressed serious interest in purchasing substantially all assets related to the Uncle Nearest whiskey operations”.
Later in his report, he suggested a sale of the assets needed to happen soon, as Uncle Nearest’s staff have become worried about their jobs and started to leave the company.
“The receiver remains concerned about the potential impacts of future departures if a sale is not executed soon,” the report said.
The report also said Young was “concerned about the continued deterioration of the brand’s value” if a buyer did not emerge soon.
