The United States Bankruptcy Court for the Middle District of Florida has entered an order directing the appointment of a Chapter 11 examiner in the jointly administered bankruptcy cases of RAD Diversified REIT, Inc. and four affiliated entities, establishing a sweeping investigation into the Debtors' financial dealings, investor fund flows, and prepetition asset transfers. The following day, the Acting United States Trustee for Region 21 appointed Maria M. Yip of Yip Associates to serve in the role, filing the application for court approval on April 2, 2026.
Company Background and Business Operations
The five Debtor entities were formed as Florida entities in 2017 by two co-founders who have exercised managerial control over each entity since inception. The Debtors were organized to acquire, manage, renovate, and operate real property, consisting primarily of single-family residential properties and vacant lots located in Florida, Pennsylvania, Texas, and New Jersey.
Each Debtor filed a voluntary Chapter 11 petition on March 1, 2026, signed by the Chief Restructuring Officer. The petitions reflect estimated assets collectively between $500,001 and $100 million, with estimated liabilities in the same range. The Debtors' consolidated list of the 30 largest unsecured creditors indicates total unsecured debt well in excess of $9 million.
The cases have carried several markers of complexity from the outset. A notice of deficient filing was issued the day after the petitions were filed, citing the Debtors' failure to file schedules of assets, financial affairs statements, and other required documents. The Debtors subsequently sought additional time to compile that information with the assistance of the Chief Restructuring Officer, counsel, and proposed professionals. According to filings in the case, the Debtors have been the subject of lawsuits by investors as well as investigations by the Securities and Exchange Commission and the Florida Attorney General. No committee of unsecured creditors and no Chapter 11 trustee had been appointed as of the date the examiner motion was filed.
The Order Appointing an Examiner
On April 1, 2026, the Court granted the United States Trustee's unopposed motion to appoint a Chapter 11 examiner (Dkt. No. 167). The Debtors had consented to the appointment, and the Court entered the order without a hearing.
The order directs the examiner to conduct the investigation specified in Bankruptcy Code sections 1106(a)(3) and (4), which encompass the Debtors' acts, conduct, assets, liabilities, financial condition, business operations, and the desirability of continuing the business. The investigation specifically includes any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity by former management, as well as whether the estate may hold causes of action based on any such conduct.
Scope of the Investigation
Beyond the statutory mandate, the order identifies four specific areas of inquiry that define the contours of the examination.
First, the examiner is directed to trace cash inflows and outflows between investors and lenders on one hand and the Debtors on the other, including money raised by the Debtors but deposited or sent to non-Debtor entities. The examiner is also tasked with determining, to the extent ascertainable, whether those payments should be characterized as debt or equity.
Second, the order requires analysis of "rollover" investments: whether they should be valued, at what valuation, and how they should be characterized.
Third, the examiner must perform a comprehensive accounting reconciliation of the utilization and transfers of the Debtors' assets and cash for the four-year period prior to the petition date. This includes money raised by the Debtors but deposited or sent to non-Debtor entities, as well as the connections and transfers among the Debtors and non-debtor entities including directors, officers, insiders, and affiliates.
Fourth, the investigation covers the origination and receipt of investments in Inner Circle memberships, REIT interests, joint ventures, and hard money loans from investors, along with any repayment of those investments.
The breadth of these topics reflects the complexity of the Debtors' capital structure and the nature of the concerns raised by investors and government agencies. The four-year lookback period, combined with the directive to trace funds flowing to non-Debtor entities and to examine the debt-versus-equity characterization of investor payments, signals that the examination will probe the fundamental question of how investor capital was raised, deployed, and accounted for across the enterprise.
Selection of the Examiner
The Acting United States Trustee appointed Maria M. Yip as examiner on April 2, 2026, and filed an application seeking court approval of that appointment (Dkt. No. 176). Yip is affiliated with Yip Associates, a firm based at 9200 S. Dadeland Boulevard in Miami.
The United States Trustee solicited nominations for examiner candidates from three parties in interest: Debtors' bankruptcy counsel, the Securities and Exchange Commission, and the Florida Office of the Attorney General. The involvement of both the SEC and the state Attorney General in the nomination process underscores the regulatory dimension of these cases.
In a verified statement filed alongside the application (Dkt. No. 176-1), Yip certified under penalty of perjury that she has no connections with the Debtors, creditors, other parties in interest, their attorneys and accountants, the United States Trustee, or any person employed in the Office of the United States Trustee. The verified statement does disclose one matter: an employee of Yip Associates was previously employed at Kaufman Rossin, a firm that had been retained by the SEC to perform work related to the Debtors. That employee worked on the SEC engagement. To address this prior relationship, an informational barrier will be implemented to restrict the employee's access to physical and electronic documents and information that the examiner and Yip Associates will receive or create in connection with the investigation.
Cooperation Obligations and Government Coordination
The order imposes cooperation obligations on a wide range of parties. The Debtors, their affiliates, managers, employees, directors, officers, subsidiaries, the Chief Restructuring Officer, and any unsecured creditors' committee (if one is later appointed) are all directed to cooperate with the examiner and provide all documents and information within their possession that the examiner deems relevant.
One of the order's more notable provisions is the directive requiring the examiner to coordinate with multiple government agencies. The examiner must cooperate fully with any federal, state, or local government agency currently investigating, or that may in the future investigate, the Debtors, their management, or their financial condition. The order specifies that the examiner is to promptly meet and confer with representatives of the Debtors, any unsecured creditors' committee, the Florida Attorney General, the SEC, the United States Trustee, and the United States Attorney for the Middle District of Florida to develop a work plan and coordinate the investigation. The inclusion of the U.S. Attorney's office in that list, alongside the SEC and the Florida Attorney General, suggests the potential for parallel government investigations beyond the bankruptcy proceeding.
If the parties cannot reach agreement on a work plan, coordination protocol, or proposed budget, the examiner must promptly report the impasse to the Court and submit recommendations for resolution.
Reporting Requirements and Confidentiality
The examiner's initial report to the Court is due within 60 days of the order approving the appointment. Beyond that initial filing, the examiner may file public reports on completed phases or progress of the investigation at the examiner's discretion.
Public disclosure is otherwise restricted. Neither the examiner nor the examiner's representatives may make public disclosures concerning the investigation except through court filings. Cooperation with governmental agencies is expressly excluded from the definition of public disclosure, preserving the examiner's ability to share information with regulators and law enforcement under protocols to be established.
The order also includes robust privilege protections. Disclosure of documents or information to the examiner does not constitute a waiver of work-product, attorney-client, or other privilege. Disputes over privileged documents may be brought before the Court for resolution. The examiner is required to cooperate with the Debtors and any creditors' committee to ensure that publicly filed reports do not contain privileged information, including information regarding the Debtors' prospects or litigation strategies.
Reservation of Rights
The order explicitly preserves the right of any party in interest to seek an expansion of the investigation's scope, to request the appointment of a Chapter 11 trustee, or to seek any other lawful relief. Any party objecting to the examiner appointment was required to file an objection within seven days of the order's entry.
Case Information
The cases are jointly administered before the United States Bankruptcy Court for the Middle District of Florida, Tampa Division, under Lead Case No. 8:26-bk-01636-CPM. The Debtors are represented by Pack Law of Coral Gables, Florida. The examiner motion was filed by the Office of the United States Trustee for Region 21.
This article was prepared using Research Suite by Stretto, the gold standard for bankruptcy research. Research Suite by Stretto was able to create this summary of approximately 15 pages of court filings in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Research Suite by Stretto may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.