An Edgartown home is embroiled in a lawsuit where a whiskey brand is accused of defaulting on more than $100 million in loans. 

A judge in an eastern Tennessee federal court last week ruled that the Uncle Nearest whiskey brand, which has grown rapidly since its founding in 2017, will be overseen by a court-appointed receiver after its creditor sued over the lack of loan repayments. 

The brand is well-known on the Vineyard after a limited liability company associated with Uncle Nearest purchased a home on Edgartown-West Tisbury Road in 2023, and the 2-acre property became the host of several promotional parties for the brand’s line of spirits. 

At the time, the parties riled up neighbors and spurred bylaws that put limits on large events. Now Uncle Nearest’s lender, Farm Credit Mid-America, said that in addition to not paying back several loans and overstating the number of whiskey barrels in its inventory, the limited liability company used to buy the home was never part of the initial loan agreement, a violation of the loan terms.

Fawn Weaver, the CEO of Uncle Nearest, has pushed back on these claims, and the company called them “salacious and inaccurate” in court filings. 

“[Farm Credit Mid-America] and its employees and agents were actively involved in — and frankly acquiesced to — the exact circumstances that it is now claiming somehow support a receivership,” Uncle Nearest’s attorney wrote to the court. “But Plaintiff’s actions throughout these several months demonstrate that Plaintiff was not truly concerned that its collateral was in danger of being lost.” 

In total, Farm Credit Mid-America, an agricultural lending cooperative, claimed that Uncle Nearest still owed $108 million and had failed to respond to repeated requests for the information and details about a potential path forward. 

The lender filed the lawsuit against the distiller at the end of July, and after a hearing on August 7, the court ruled on Thursday to start the process of appointing a third-party custodian to oversee the whiskey company.

Uncle Nearest did acknowledge that it did inflate the size of its barrel inventory when attempting to extend its credit, but blamed a rogue chief financial officer who has since been terminated from the company, Uncle Nearest’s lawyers wrote in response to the initial allegations.

In filings, Uncle Nearest has disputed there was an issue with the purchase of the Vineyard home in the Codman Spring Road neighborhood. The company, in its response to the lawsuit, said it was fully transparent about the acquisition and intended purpose of the home, and no objections were made at the time. 

An official with Farm Credit Mid-America even traveled from Tennessee to the Vineyard, and attended the inaugural gospel brunch at the property, Uncle Nearest claims. 

The financial details surrounding the home played little into the judge’s decision, though. In a footnote in his 11-page ruling, Judge Charles Atchley Jr. said the allegations around the home did not weigh in favor or against the appointment of a receiver, given the outstanding factual dispute surrounding it.

He went on to write that the decision wasn’t reached lightly, but it seemed the best path forward.

“[The court] fully appreciates the Defendants’ concerns and has given them great thought,” he wrote. “But these concerns are insufficient to overcome the Court’s conclusion that a receiver is necessary to protect Farm Credit’s interest at this time.”

The judge asked the parties to consider potential appointees, and left the door open for Fawn and her husband Keith Weaver to remain at the company to help shepherd it through the financial difficulties. 

“[T]he Court can craft a receivership order that still allows the Weavers to market Uncle Nearest and further build the brand,” he wrote. “By keeping the Weavers involved in this way, they could mitigate any potential brand damage that a receivership might entail.”

While the case plays out, the Vineyard home off Edgartown-West Tisbury road appears to still be holding some events. Ebony Magazine partnered with Uncle Nearest and held a gospel brunch for 400 attendees on August 10, the magazine posted on social media. 

“The afternoon was filled with soulful sounds from Israel Houghton, delicious food, lively games and meaningful connection — bringing community together in true Vineyard fashion,” the magazine wrote. 

In an Instagram post after the court ruling, Ms. Weaver wrote that she was under a gag order and couldn’t talk about the case, but suggested people follow the court docket.

“This is a blip on the radar,” she wrote. “What we’re building is so much bigger than the current news cycle — so don’t be concerned or dissuaded.”