David J. Kozlowski Discusses Humble Baron Bankruptcy in Inc.

Morrison Cohen Bankruptcy, Restructuring & Governance Partner David J. Kozlowski was quoted in Inc. discussing the conversion from Chapter 11 bankruptcy to Chapter 7 of Humble Baron Inc., a restaurant, bar and live music venue located at the Nearest Green Distillery in Shelbyville, Tennessee.

Humble Baron, which is owned by Uncle Nearest co-founder Keith Weaver, filed for Chapter 11 bankruptcy in June with more than $6.1 million in unsecured debt. Following evidence of disputed transfers to insiders and affiliates, a federal bankruptcy judge ordered the case converted to Chapter 7, concluding that the case “certainly needs trustee oversight.”

The conversion gives an independent Chapter 7 trustee the ability to investigate the company’s financial affairs, including transfers involving Weaver and entities connected to the Uncle Nearest brand. The court’s decision follows an earlier order requiring Humble Baron to return more than $66,000 transferred after the bankruptcy filing, as well as the disclosure of additional transfers of $40,000 and $34,584 to Weaver.

Dave noted the significance of the Humble Baron trustee’s appointment in the context of the Uncle Nearest receivership proceeding. “Humble Baron going into Chapter 7 hands the Uncle Nearest receiver a gift. The receiver argued these entities were run as one enterprise—now there’s a trustee with clawback power examining the same inter-company transfers,” he explained.

The Humble Baron bankruptcy also involves several connections to Uncle Nearest and related entities, including a long-term lease with Uncle Nearest Real Estate Holdings. Dave highlighted the significance of having two independent court-appointed fiduciaries examining related transactions from different perspectives.

“Same family, same site, and two court-appointed fiduciaries coming at the transactions from opposite sides, each asking where the money went,” he said.

Read the full article in Inc. here.