💥New Chapter 11 Bankruptcy Filing - RAD Diversified REIT, Inc.💥
Alleged real estate Ponzi scheme files emergency chapter 11 ... to liquidate.
Back on March 1, 2026, Tampa-based RAD Diversified REIT, Inc. (“RAD Diversified”) and four affiliates (collectively, with RAD Diversified, the “debtors”) filed “emergency” chapter 11 bankruptcy cases in the Middle District of Florida (Judge McEwen). The debtors are … um … let’s have Florida Attorney General James Uthmeier take this one:
“This appears to be a Ponzi scheme …”
Why? Here he is again:
“Our office has received complaints that a popular internet duo selling real estate investment services through their fund is pocketing cash instead of buying properties as advertised.”
The front was apparently masquerading as a REIT. According to CRO and first day declarant Katie Goodman, the “business,” born in May ‘17, was “formed to acquire, manage, renovate or reposition, and operate real property, consisting primarily of single family residential properties and vacant lots located in Florida, Pennsylvania, Texas, and New Jersey.”
A real winner too. Founders Brandon “Dutch” Mendenhall and Amy Vaughn …
… only give off good vibes. We mean, check out Mr. Mendendall’s humbleness in self-proclaiming to be “… one of the great financial thought leaders in America.”
Oh brother.
In fairness, “ripping off your investors” is a “financial thought.” Allegedly. Ms. Goodman’s declaration is scant on the details on those matters …
“The Debtors have also been the subject of some private litigation by investors, including a civil RICO suit in which a well-known media personality asserts that certain affiliates of the Debtors allegedly misled investors.”
… but we dug up the underlying complaint filed by conservative media “personality” Buck Sexton:
“This case stems from the elaborate scheme by the Defendants to steal millions of dollars from unsuspecting investors, including the Plaintiff, by offering too good to be true returns on investments, while leveraging the good will and popularity of celebrities, such as the Plaintiff, to add a false sense of legitimacy in order to hide their criminal endeavors.”
How “too good to be true”? Enough that anybody with a pulse should have seen it coming. From a November ‘21 US Securities and Exchange Commission (the “SEC”) letter to the debtors:
“We note the statements on your website at https://raddiversified.com that RAD Diversified made a 36.7% annualized return in 2020 and has cleared 35.48% in the past 12 months. We also note your statement that RAD Diversified offers monthly distributions, a 5% bottom-line guarantee… Explain the basis for your statement regarding a 5% bottom line guarantee.”
The public is still waiting on that explanation. Nevertheless, the scheme carried on. Per an offering memorandum (the “OM”) filed with the SEC, the company raised ~$73.8mm from 5k+ suckers investors through March ‘23.
Again, there were signs along the way. A year earlier, in March ‘22, The Philadelphia Inquirer reported:
“… [S]ome of the rents in the [] inventory of RAD’s holdings appear to be overstated, in light of the buildings’ conditions, as characterized by [Philadelphia’s Department of Licenses and Inspections]. The boarded-up rowhouse at 4243 Leidy Ave., for example, is said to be earning the company $14,400 a year in rent — even though it has no rental license and its most recent license was as a vacant property.”
Okay, $14.4k per year doesn’t sound like much — no doubt some of you UESers reading this are paying more than that each and every month (🙄)— but please don’t tell us you skimmed over “boarded-up.” It’s an utter sh*thole:
One that, hopefully, no one calls “home.”
Anyway, after having failed to qualify the OM within nine months, on February 2, 2024, the SEC declared the offering statement abandoned, which prompted a response from the debtors. They “temporarily”, lol, froze redemptions.
A deep freeze that never thawed. Here’s the reason, per Forbes:
“According to one investor who spent time on RAD’s board with access to its books during the summer of 2025, there were numerous foreclosures in its real estate portfolio, and assets were missing amounting to an estimated $100 million.”
Most likely, duped investors will get back little of that in chapter 11. Per Ms. Goodman, “… most of the real properties owned by the Debtors are subject to deeds of trust, mortgages, and other secured debt,” only “certain” of which have value extending beyond the mortgage debt and “many” of which are vacant.*
Ms. Goodman and independent director Michael Roye appear to think so anyway. They are calling it quits on the debtors’ future, opting to sell what they can and desire to establish “… a post-confirmation trust to manage and liquidate the remaining properties.”
If they can actually confirm a plan. Seems real iffy because the debtors filed with $15k in cash and, to fund the cases, “… hope to negotiate consensual use of cash collateral.” In the interim, non-consensual use of a projected ~$90k in monthly rents will work fine for them.
Although, Ms. Goodman and the debtors’ other professionals will be heaps motivated to get to consensual. See what they’ve allocated for themselves in the filed budgets:
Twice even.
… which is far from great for the pros because some work is about to go on “the tab.” On March 24, 2026, the aforementioned mortgage lenders, who were already foreclosing pre-BK, showed up and started firing off motions for relief from the automatic stay (here, here, here, and here) to take their balls properties and go home.
Anyway, on March 5, 2026, Judge McEwen held the first day hearing, where the court granted all requested relief … except the debtors’ employment of financial advisor KapilaMukamal, LLP (Soneet Kapila). Why not? Well, for one, we’re not sure why retention apps were up at all at the first day, but for a second, the Florida AG wasn’t thrilled. It had previously been negotiating with Mr. Kapila to serve as a state court receiver for the debtors and filed an “initial” objection to KapilaMukamal, LLP to “… to have more time to understand the nature of the proposed engagement by Debtor of Mr. Kapila.” Anyway, the court continued that app to March 19, 2026 but still hasn’t ruled, although it did approve a second interim period of cash collateral usage. The next hearing, which’ll presumably include those stay relief motions, is scheduled for April 16, 2026 at 3:30pm ET.
The debtors are represented by Pack Law (Joseph Pack, Jessey Krehl) as legal counsel, KapilaMukamal, LLP (Soneet Kapila) as financial advisor, and GGG Partners, LLC (Katie Goodman) as CRO.** Michael Roye is the debtors’ independent director. Mr. Mendenhall is was represented by Bush Ross, P.A. (Kathleen DiSanto, Jeffrey Warren) as legal counsel.
*Tenants have also been withholding rent “… because they have been served with foreclosure lawsuits.”
**Ms. Goodman’s firm was previously retained as financial advisor, but she hasn’t yet spilled the beans on why the switch was made.
Company Professionals:
Legal: Pack Law (Joseph Pack, Jessey Krehl)
Financial Advisor: KapilaMukamal, LLP (Soneet Kapila)
Chief Restructuring Officer: GGG Partners, LLC (Katie Goodman)
Independent Director: Michael Roye
Claims Agent: Epiq (click here for free docket access)
Other Interested Parties:
Founder: Brandon “Dutch” Mendenhall
Situations like this reinforce how critical it is to look beyond surface-level returns and reported metrics. For credit professionals, transparency, asset quality, and cash flow validation remain essential, especially when structures or narratives seem overly complex or unusually attractive.