Whiskey brand Uncle Nearest has been placed in receivership in a Tennessee court in the wake of a lawsuit alleging loan default, multiple media outlets are reporting.

The lawsuit was filed in July by Farm Credit Mid-America, which alleges Uncle Nearest defaulted on loans in the sum of $108 million, according to The New York Times. The suit also claims the brand was misleading about its inventory and valuation.

The neutral receiver will manage the distillery through negotiation, although the brand’s principles will still be involved, per reports. 

The New York Times also reported that Farm Credit Mid-America also alleges Uncle Nearest kept a maintained a cash balance far below the terms of the loan and “failed to maintain sufficient internal financial controls.”

In a court document, Uncle Nearest founder Fawn Weaver said the lawsuit is “a flat-out lie used to smear my good reputation,” the Times reported.

However, per Spirits Business, the court stated that, even in receivership, “The court can craft a receivership order that still allows the Weavers to market Uncle Nearest and further build the brand. By keeping the Weavers involved in this way, they could mitigate any potential brand damage that a receivership might entail.”

Uncle Nearest, founded in 2017, has been a fast-riding whiskey brand, having been highly awarded company since 2019. Uncle Nearest is available in all 50 states and 26 countries, with a presence in more than 45,000 stores, bars, hotels, and restaurants, per the company.

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