David J. Kozlowski Discusses Whiskey Maker’s Bankruptcy Appeal in Inc. Magazine

Morrison Cohen Bankruptcy, Restructuring & Governance Partner David J. Kozlowski was quoted in Inc. discussing the ongoing bankruptcy and receivership proceedings involving whiskey brand Uncle Nearest and founder Fawn Weaver’s appeal, which seeks to revive the company’s Chapter 11 case.

The article examines the legal hurdles facing Weaver’s appeal after the bankruptcy court dismissed the Chapter 11 filing, concluding that she lacked the authority to place the company into bankruptcy while it was under receivership. Dave explained that the appeal is unlikely to succeed, observing that, "Weaver wove an interesting argument, but upon inspection, her position is threadbare. This should be a routine application of law upholding the bankruptcy court's decision."

Dave also challenged Weaver’s interpretation of the bankruptcy court’s ruling, noting that "Weaver relies in part on an out-of-context quote from the bankruptcy judge" to support her position.

In addition, Dave suggested how the court could resolve the appeal on standing grounds without reaching the merits of the argument itself. He explained that Weaver’s authority had been stripped by the receivership order, leaving her without the legal standing to challenge the dismissal. As Dave noted, “This ‘standing’ argument can be decided by determining that Weaver lacks corporate authority in general rather than a ‘merits’ argument which requires a finding that she lacked authority to file the bankruptcy specifically.”

The article also explores how the pending receivership proceedings, including a proposed sale of the company’s assets, could ultimately render the appeal moot.

Read the Inc. article here.