Krasnoff Domestic Growth Fund - Chapter 11 Case Summary

Krasnoff Domestic Growth Fund, LP filed for Chapter 11 on July 31, 2026 following the July 2025 death of founder Peter Krasnoff and Reflect Advisors' identification of significant discrepancies between self-reported investor capital balances — investors believed the Fund held approximately $22 million in capital as of Krasnoff's death — and the approximately $5.1 million in estate assets identified or located as of the Petition Date. The Debtors are pursuing an orderly wind-down that includes investigating fund assets, prosecuting avoidance actions and distributing proceeds for the benefit of investors, directed by Jacen Dinoff, appointed Manager of the General Partner on July 7, 2026 with no prior connection to the Debtors, Krasnoff or his predecessor, and CRO Adam Zalev, Founder and Managing Director of Reflect Advisors.

Business Description

Headquartered in Pennington, NJ, Krasnoff Domestic Growth Fund, LP ("KDGF" or the "Fund") is a Delaware limited partnership and hedge fund founded by Peter Krasnoff ("Krasnoff") in 2001. Krasnoff Capital Management, LLC ("KCM" or the "General Partner," and together with KDGF, the "Debtors") is the Fund's general partner.

The Fund focuses on U.S. equities, bonds and money market instruments.
The Fund has an investor base of approximately 20 investors, including certain holders with stakes exceeding 5% and 10%.
As described to investors by Krasnoff over the years in investor communication materials, the objective of investment in the Fund was to outperform the benchmark of either the Vanguard Balanced Fund Index or the S&P 500 with "less risk" through diversification.

Corporate History

Governance Structure

Pursuant to its limited partnership agreement, the General Partner manages the operations and policies of the Fund. The Fund's investors hold limited partnership interests and do not participate in management, and the Fund holds the capital contributions of those investors.

Pursuant to the operating agreement of the General Partner, the operations of the General Partner—including responsibility for all investment decisions and day-to-day affairs—are managed by a "Manager."

Management Succession

Krasnoff served as the initial Manager of the General Partner, exercising full control over the General Partner and its operational and recordkeeping functions until his death in July 2025.
On Sept. 16, 2025, members of the General Partner appointed Kevin Cyrana ("Cyrana") as Manager.
- Per the Declaration, the resolution appointing Cyrana was signed by all members holding voting interests, thereby providing the consent required to appoint him under the Limited Liability Company Agreement of KCM.
On July 7, 2026, Cyrana was removed as Manager and the members of the General Partner appointed Jacen Dinoff ("Dinoff") as Manager. Dinoff had no connections with the Debtors, Krasnoff, or Cyrana prior to his appointment.

Restructuring Advisors

In March 2026, KDGF and KCM engaged Reflect Advisors, LLC ("Reflect") to provide restructuring and financial advisory services and appointed Adam Zalev as CRO on or about April 23, 2026.
- Cyrana, at the time Manager of the General Partner, signed the engagement letter setting forth the terms of Zalev's retention as CRO.
Zalev is the Founder and Managing Director of Reflect, a boutique financial advisory and restructuring practice founded in 2023, whose professionals are engaged as advisors in numerous formal and informal restructurings. Prior to founding Reflect, Zalev served as a Senior Managing Director of FTI Consulting, Inc. ("FTI") for six years, and prior to joining FTI, held progressively more senior roles, culminating in Managing Director, at Alvarez & Marsal ULC for nine years.
Mandelbaum Barrett PC (Jeffrey M. Rosenthal, Vincent J. Roldan and Katie F. Warren) serves as proposed counsel to the Debtors.

Prepetition Obligations

The limited partners of the Fund are also the main creditors of the Fund. The Declaration does not identify any funded debt or secured obligations of the Debtors, and none of the First Day Motions described in the Declaration seeks debtor-in-possession financing.

Based on available information, investors believed the Fund held approximately $22 million in capital as of Krasnoff's death in 2025.
As of the Petition Date, Reflect has identified or located approximately $5.1 million in estate assets of the Debtors, reflecting the discrepancy Reflect identified during the wind-down process.

Events Leading to Bankruptcy

Death of the Founder and Transition to Wind-Down

Following the death of Krasnoff in July 2025, the General Partner and the Fund substantially ceased normal operations and transitioned into a wind-down process.

During the wind-down process, Reflect, as financial advisor engaged by KCM and KDGF, identified significant discrepancies between self-reported investor capital balances and assets of the estates located in known cash and brokerage accounts.

Chapter 11 Filing and Go-Forward Strategy

The Debtors filed these cases in the U.S. Bankruptcy Court for the District of New Jersey on July 31, 2026 (Case No. 26-18662 (CMG)), to further an orderly wind-down process.

Under the direction of Dinoff, as Manager of the General Partner, the Debtors shall investigate assets of the Fund, prosecute appropriate avoidance actions, and distribute proceeds for the benefit of these investors.
The Debtors filed various First Day Motions on the Petition Date to help ensure an efficient wind-down process. According to the CRO, the relief sought in each First Day Motion will enable the Debtors to efficiently wind down while in Chapter 11 while fulfilling their duties as debtors in possession, and is in the best interests of the Debtors, their estates, and their creditors.