Filing Alert: RAD Diversified REIT Chapter 11
RAD Diversified REIT Files Chapter 11 in Middle District of Florida
Update (Mar. 2, 2026): A comprehensive case summary is now available for the Chapter 11 bankruptcy filing of RAD Diversified REIT, Inc.
RAD Diversified REIT, Inc. and its debtor affiliates⁽¹⁾ (collectively, the "Debtors"), a Port Richey, FL-based real estate investment trust that acquires and manages real property, consisting primarily of single family residential properties and vacant lots located in Florida, Pennsylvania, Texas, and New Jersey, filed for Chapter 11 protection on Mar. 1 in the U.S. Bankruptcy Court for the Middle District of Florida.
The Debtors attribute the filing to a severe liquidity crisis precipitated by regulatory headwinds and reputational damage that disrupted access to capital markets. Following a February 2024 SEC offering suspension and a July 2025 investigation by the Florida Attorney General—publicly characterized by the AG as a potential "Ponzi scheme"—the Debtors faced an inability to raise essential financing. This lack of access to capital, compounded by high mortgage interest rates and stagnant real estate markets, resulted in significant negative cash flow and widespread defaults on property-level obligations. Immediately prior to the petition date, the Debtors faced imminent foreclosure sales across their portfolio, while tenant rent withholding following foreclosure notices further exacerbated the liquidity crunch.
The cases involve over 5,000 retail investors with aggregate investments ranging from $1,000 to over $1 million via Reg A and Reg D offerings. While many prepetition investments were documented as "secured" promissory notes or joint ventures specific to certain properties, the Debtors advise that record searches indicate few, if any, liens were perfected or recorded. To address these irregularities, the Debtors appointed an Independent Director and engaged GGG Partners to provide turnaround management services and fill the Chief Restructuring Officer (CRO) role.
The Chapter 11 filing aims to prevent additional loss through foreclosure and to preserve and maximize value. The Debtors intend to pursue a Plan of Reorganization that establishes a post-confirmation trust to liquidate remaining real estate assets and pursue causes of action for the benefit of creditors and investors. Concurrent with the sale process, the Debtors have retained KapilaMukamal, LLP to conduct a forensic investigation into prepetition sources and uses of funds, intercompany transfers among non-debtor affiliates, and potential avoidance actions.
RAD Diversified REIT, Inc. reports $50 million to $100 million in both assets and liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 26-01636.
⁽¹⁾ For a complete list of debtor entities, see the Chapter 11 Debtors table.
Chapter 11 Debtors
Key Parties
Counsel:
- Joseph Pack
Pack Law, P.A.
Email: [email protected]
Forensic Accounting and Financial Analysis:
- KapilaMukamal, LLP
Operational Advisory Services / CRO:
- GGG Partners, LLC (Katie S. Goodman)
Claims Agent:
Bondoro Insights is continuing to monitor this case and will provide further coverage as appropriate.
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